Rolling Back Marketing/Effect on CI

[rntair]

Hello,

My airline is moving into its 2nd and a half year in BW1. I'm now at 72 aircraft and two bases (YYZ and YVR). Unfortunately, my profits are not where I'd like them to be. I'm down to making ~$6-10M a week, but I used to be making up to $17M a week. The only three things that have changed since then are 1) New Base at YVR 2) More brand-new 737s and 3) Increased marketing costs. At the beginning of this game I made a number of missteps which led to me having a nearly -10 company image, and I may have over corrected. I'm currently marketing everything except TV in Canada, TV in North America, and everything except TV across the whole world. (I do fly a number of longhaul routes to Europe and Asia)

My CI is currently 81 which is pretty good. But again, profits are not as good as I think they should be, and I'm dropping nearly 19 million a week in Marketing. I won't be shrinking my fleet or closing my Vancouver base, so it would seem that rolling back marketing would be a good step. However, I don't want to decrease my CI significantly. I'm thinking of dropping everything except my Canadian campaign which will bring marketing costs to around $3.3 Million a week. How much will this affect my CI?

Thanks in advance. Also, I'm looking for a game mentor 

[johndd1]

As near as I can remember, it doesn't really matter WHERE you put your marketing money, it only matter how much money you spend on marketing. So, consider the municipality of my home base and advertising to the whole world as no different to each other, except in how much they cost. In other words, use the various geographic campaign options to customize exactly how much you want to spend, and ignore completely the idea that advertising only in you home city is any different than the whole world (except the cost).

Next, I'm not too familiar with the Canadian market itself, but unless you're trying to haul a bunch of business/first class types, a CI in the 50-ish range is perfectly fine.

[Cornishman]

john is absolutely correct - Marketing in this game does not work in the logical way we would expect marketing to work in the real world. In the real world, we would expect different effects according to where we advertise and by what medium we advertise.  I mean, in this day and age in real life, you would have to believe that Internet Marketing is possibly the best and most important and might yield the best results - right?!  But in AWS it doesn't work like that. (when we do get internet available to campaigns, because it is relatively cheap in AWS it has very little extra effect on your CI.)

Only the amount of money you spend marketing makes any difference to the result. In real life you surely wouldn't select two identical marketing campaigns (eg: two Newspapers & billboards for all of my continent) and then run them at the same time - it isn't logical in real life. In AWS that would work fine, because it's just the amount you spend that makes the difference.

Then you need to consider where you are operating from and what your competition looks like and where your intended routes take you.  I agree entirely again with John's suggestion that given your location and routes, you could probably achieve similar level of success anywhere from say about 50% to 60% CI and upwards. In other words... probably little to be gained by achieving more that say 60% CI, except a hell of a lot more expense.

[Zobelle]

My typical strategy is to go
-Newspaper
-Billboard
-Radio

On all locations except worldwide, however. I make Continental a temporary (6mos), the first three permanent.

Without any mishaps this has lead to a consistent CI90 which is about as good as you’ll get without throwing money out the cockpit window.

[Tha_Ape]

So now you know about marketing, but what about your costs, RIs, demand vs supply, etc.?
You need to consider every little piece of the machine, as only one corrupted part may hamper it all.

[gazzz0x2z]

(1) New Base at YVR 2) More brand-new 737s and 3) Increased marketing costs.

do you have (4)new opposition has arised?

besides, (1)a new base might take time to increase profit. new flights, especially when long, are a drain for months before making good money. Are your brand new 737 owned or leased? (2)Such a popular aircraft is usually a money hole when leased, despite its obvious qualities. An old crap leased is usually cheaper to run than a leased shining new machine. When you own the birds, dynamics are very different.

[groundbum2]

I'd even be happy with a CI of 20 or 30. I had 50CI in a game with everybody else at CI100 and on routes where we had the same number of birds, I had maybe 49.8% market share to their 50.2%, so hardly any swing at all! CI 100 is really only for people who want to get their airline score up high, as a higher CI also gets a AAA credit rating.

Simon

[rntair]

do you have (4)new opposition has arised?

besides, (1)a new base might take time to increase profit. new flights, especially when long, are a drain for months before making good money. Are your brand new 737 owned or leased? (2)Such a popular aircraft is usually a money hole when leased, despite its obvious qualities. An old crap leased is usually cheaper to run than a leased shining new machine. When you own the birds, dynamics are very different.

There are only two serious airlines in the Canadian Market- myself and another at YYZ. The other YYZ airline has not opened any new flights or acquired any new aircraft since I began. I've beaten them down from nearly 66% market share to 44%. I lease all my 777s and 737-900s, but I own about a dozen 737-600s. So I have a 1:7 owned to leased ratio. The new base at YVR is actually making money but LF's consistently are around 50%. I got new leased 737-900s for the YVR base, but the delivery rate was so sluggish that I ended up getting several off the used market instead. Thinking about transferring the routes on the used to the new and using the used planes as C-check swappers.

UPDATE: I axed 3 out of my 4 marketing campaigns and I'm now making about $17M a week.  CI has dropped to 76 however.

[groundbum2]

UPDATE: I axed 3 out of my 4 marketing campaigns and I'm now making about $17M a week.  CI has dropped to 76 however.

has LF% changed at all, that's the key in the end...

Simon

[rntair]

has LF% changed at all, that's the key in the end...

Simon

Hasn't changed a bit.

[johndd1]

Perfect!

[knobbygb]

I lease all my 777s

It's impossible to say for sure without seeing more details but this is a really bad idea and might be part of your problem. I guess you've checked and they are making money - at least some, but generally leasing new(ish) widebodies is not a good idea as the margins are already slimmer on longhaul routes.  Also see the next comment about how staffing costs for those aircraft are worked out.

The new base at YVR is actually making money

Again, I'm sure it is, but you can't simply look at the figures from the 'My Aircraft' or the 'Income Statement' pages to determine this for sure.  Even if every aircraft is making a paper profit, it might not be anything like as much as you think. None of the company-wide overheads (LOTS of extra staff at head office, for example) are included in these figures.  Also remember that the 'My Aircraft' figures just include costs such as fuel, route fees, depreciation and maintenance. No staffing figures (even the aircraft crew) are taken into account there!  With only 72 aircraft in total, the overheads of a second base probably mean it's adding virtually nothing to your total profit at this stage.

The same applies to marketing. ALL your marketing will be 'charged' against the accounts of your HQ.  The costs will have increased significantly when you opened a second base (and the new routes there) but this amount is NOT taken into account when the system attempts to show the profits of the 2nd base, not is it included in profit calculations of ANY of your routes.

I agree with the suggestions of reducing you marketing a lot though. Aim for total marketing being NO MORE than 10% of your revenue (probably more like 5% to 8%) at this stage in the game.  When you're a lot bigger and better established you'll be able to gain CI of 100 with less that 2% marketing to revenue ratio.

[rntair]

It's impossible to say for sure without seeing more details but this is a really bad idea and might be part of your problem. I guess you've checked and they are making money - at least some, but generally leasing new(ish) widebodies is not a good idea as the margins are already slimmer on longhaul routes.  Also see the next comment about how staffing costs for those aircraft are worked out.

Again, I'm sure it is, but you can't simply look at the figures from the 'My Aircraft' or the 'Income Statement' pages to determine this for sure.  Even if every aircraft is making a paper profit, it might not be anything like as much as you think. None of the company-wide overheads (LOTS of extra staff at head office, for example) are included in these figures.  Also remember that the 'My Aircraft' figures just include costs such as fuel, route fees, depreciation and maintenance. No staffing figures (even the aircraft crew) are taken into account there!  With only 72 aircraft in total, the overheads of a second base probably mean it's adding virtually nothing to your total profit at this stage.

The same applies to marketing. ALL your marketing will be 'charged' against the accounts of your HQ.  The costs will have increased significantly when you opened a second base (and the new routes there) but this amount is NOT taken into account when the system attempts to show the profits of the 2nd base, not is it included in profit calculations of ANY of your routes.

I agree with the suggestions of reducing you marketing a lot though. Aim for total marketing being NO MORE than 10% of your revenue (probably more like 5% to 8%) at this stage in the game.  When you're a lot bigger and better established you'll be able to gain CI of 100 with less that 2% marketing to revenue ratio.

BW1 just ended a few days ago, and I finished fairly well, with three bases (Montreal added). I had about 228 aircraft, 122 737s, 99 777s, and 7 747-8s. Marketing was rolled back and CI remained at 70 for years. Your point about the company wide overheads being concentrated at HQ makes sense to me, as I was wondering why YYZ was ALWAYS losing money even though 2/3 of my A/C were based there. As for the 777s, they consistently led the pack in profitability, especially the 777-300s (not ER). Those were all leased, flying to high C/F routes like Dusseldorf, Glasgow, and Manchester. One spot where I did notice leasing causing me to barely break even was ULH flights; 777-200LR leased and flying to Hong Kong and Singapore delivers excellent route profits, but a combination of fuel costs and leasing kills the profitability. My 2 owned 748's were profitable as well, and surprisingly the leased ones eclipsed the 77L in profitability.

Overall, it was a learning game, and I was satisfied to have a large route network built out in Europe and the Americas. My three major observations which I will apply to my next airline are:

1) 40 C seats is a bit too much, and 8 F is probably better than 10. It was very difficult to fill 40 C seats on a 777 to Warsaw, Milan, or Budapest.
2) Probably shouldn't have rushed to open another base at Montreal. Pax demand was very disappointing. Also, should've taken more than 2 years to build out a massive network out of YYZ. I spent the last two years of the game sending UM planes to YYZ.
3) Keep more cash on hand. Despite making ~$30M a week by the end, my cash on hand never exceeded $200M.

And three big questions remain:

1) When is it a good time to start buying planes? Better to start buying planes out of leases or straight out of UM, or new?
2) Is 7-day scheduling worth it for medium haul 737 routes? How about transatlantic routes? I usually would schedule transatlantic routes 12345-7, and bump up the Saturday flight by a few hours to squeeze an A check in. Is there a penalty for doing this?
3) Medium haul widebody? Sounds crazy, but by the end I had 777s flying all routes from YYZ to YVR, YUL to YVR, and most of the routes from YVR to JFK and SEA and YYZ to Ottawa, Montreal, and Halifax. Even had a 747-8 flight to Houston.

Thanks for your help everybody!
rntair

[Infinity]

Couple of heading indicators for your next games:

A) Flying 748 is not a good decision in this game ever, but doing so when you also already operate 777s is really not smart.

B) As was mentioned earlier in the thread, you can't look at an aircraft's individual screen 1:1 to determine if it's profitable as overhead is excluded. You need to adjust a bit. If a long haul jet is not earning significantly over 1 million dollars (in 2010) you are losing money flying it after covering overhead.

C) Same goes for route profits. Ultra long routes may show an attractive route profit, but when you factor in that you are probably sacrificing at least 1 flight per 7-day schedule flying those, they may not be enough. Ultra long haul routes require REALLY insane route profits. If you have a 7-day schedule with only 3 long haul flights in it, they need to be making at a bare minimum 600k per flight to be worthwhile.

4) Level 4 long haul bases are ridiculously expensive. You need lots of planes in them to break even. As you may have noticed, all marketing as well as the increased staffing overhead is charged to the HQ and does not show in the bases income statement. Having 2 such bases at under 80 planes was a poor choice.

D) You should start buying over leasing when your cash flows allow for it without impairing your ability to (profitably!) grow using leased aircraft from the used market. Refrain from leasing new aircraft, those are difficult to turn a profit on. Only consider buying out leases when the aircraft are still rather new-ish when they come off the lease and you intend to use them for at least 8 more years. Otherwise, buy new.

E) The penalty for using 12345-7 scheduling is inefficiency. I would always go 7-day on widebodies, even transatlatic. As for 737, that depends on the airport's route profile, but in North America (including Canada) with its many routes > 1k nm, it does make sense and adds efficiency to your fleet.

F) Widebodies to medium haul destinations only make sense as a gap filler in a 7-day schedule. Don't overdo it as sacrificing frequency costs market share and loads.

G) The 777s is a difficult fleet choice in this game and was probably a poor choice for Canada, particularly when they are leased new frames. A newly leased 777 costs north of 3 million after 2010, that's 700k per week and ends your dreams of profitability right then and there. There is only one scenario where you could get away with that, and that's if you are more profitable than a competitor and need a quick few aircraft on short term leases (1-2 years) to push him over the edge. And even then you would want to limit exposure as much as possible.

[rntair]

Couple of heading indicators for your next games:

A) Flying 748 is not a good decision in this game ever, but doing so when you also already operate 777s is really not smart.

B) As was mentioned earlier in the thread, you can't look at an aircraft's individual screen 1:1 to determine if it's profitable as overhead is excluded. You need to adjust a bit. If a long haul jet is not earning significantly over 1 million dollars (in 2010) you are losing money flying it after covering overhead.

C) Same goes for route profits. Ultra long routes may show an attractive route profit, but when you factor in that you are probably sacrificing at least 1 flight per 7-day schedule flying those, they may not be enough. Ultra long haul routes require REALLY insane route profits. If you have a 7-day schedule with only 3 long haul flights in it, they need to be making at a bare minimum 600k per flight to be worthwhile.

4) Level 4 long haul bases are ridiculously expensive. You need lots of planes in them to break even. As you may have noticed, all marketing as well as the increased staffing overhead is charged to the HQ and does not show in the bases income statement. Having 2 such bases at under 80 planes was a poor choice.

D) You should start buying over leasing when your cash flows allow for it without impairing your ability to (profitably!) grow using leased aircraft from the used market. Refrain from leasing new aircraft, those are difficult to turn a profit on. Only consider buying out leases when the aircraft are still rather new-ish when they come off the lease and you intend to use them for at least 8 more years. Otherwise, buy new.

E) The penalty for using 12345-7 scheduling is inefficiency. I would always go 7-day on widebodies, even transatlatic. As for 737, that depends on the airport's route profile, but in North America (including Canada) with its many routes > 1k nm, it does make sense and adds efficiency to your fleet.

F) Widebodies to medium haul destinations only make sense as a gap filler in a 7-day schedule. Don't overdo it as sacrificing frequency costs market share and loads.

G) The 777s is a difficult fleet choice in this game and was probably a poor choice for Canada, particularly when they are leased new frames. A newly leased 777 costs north of 3 million after 2010, that's 700k per week and ends your dreams of profitability right then and there. There is only one scenario where you could get away with that, and that's if you are more profitable than a competitor and need a quick few aircraft on short term leases (1-2 years) to push him over the edge. And even then you would want to limit exposure as much as possible.

First of all, thank you for your helpful advice!

To address some of the specific points, flying 748 was an experiment on my part. The owned ones, fresh off the assembly line, were profiting ~1.5M a week (from the aircraft page  ). But the leased ones were netting around 500k- they were used, but since the 748 production line was always "about to close" the price of a new 748 usually matched and sometimes undercut the used market. They only worked on ~500 demand routes that are 5000-6500nm- this meant they were almost exclusively confined to Toronto to India and the Middle East.

The 777s were always leased used, except for a few owned ones. I also noticed myself that the 777 was a tad too large to serve transatlantic routes with 250-300 demand. I think I will go to A330s next time around, as I've found them to be a tad more efficient and the fleet group itself is more flexible, from smaller -200 to long range/high capacity A340s. As for the medium haul wide body flights, most of them were gap fillers. But as another experiment I used all 777s on transcontinental flights to YVR, and it was mostly a disaster- planes barely broke even (and probably were losing a lot more since overhead was not considered) and LFs hovered around 30-40%. These experiments- 777 to YVR and 748 in general- would have probably killed my airline in a real GW, especially an airline with barely 200 planes and ~200M cash.

As for 12345-7 scheduling, I was flying 1234567 scheduling, but with the Saturday flight bumped up a few hours. For example, on a 777 from Toronto to Algeirs, a flight that departs Thursday arrives back in Toronto on Friday at 13:00, and then takes off again at 18:00 (all very rough estimates). Not enough room for A check. So the Saturday flight takes off at 15:30 instead and arrives back at 10:30 on Sunday, with an A check at 13:00 and then take off at 18:00 again. Is there a penalty for doing this?

Also interested to know more about when to jump from 3/4 to 4/4 base. I've read elsewhere on the forums that the jump from 3/4 to 4/4 is not as large as 2/4 to 3/4. So I quickly upgraded Montreal and Vancouver bases to 4/4. In Vancouver, for example, I was only basing 10 777s at a time at the airport, and 30 737s. How many widebody A/C would I need to operate from a base to make 4/4 worth it?

And one more question about buying planes, specifically the point when I should begin purchasing off UM- should I start buying when the average price of a used plane (likely 737, ~60M?) is worth the previous week of profit? 2 weeks of profit? In other words, the amount of time in which liquid funds will be able to return to pre-UM plane acquisition levels. For example, I buy a 50M plane, but I'm making 50M a week so I won't see a huge impact. Or is it fine to start when I'm making say, 20M a week?

Thanks!
rntair

[deovrat]

Couple of heading indicators for your next games:

A) Flying 748 is not a good decision in this game ever, but doing so when you also already operate 777s is really not smart.

I am trying my hardest in GW4 to overcome this point of yours, and I hope to say I did well with them at the end.

However, I absolutely concur with you, they can kill you swiftly if you haven't got a rock solid strategy to use them with.

[Talentz]

A) Flying 748 is not a good decision in this game ever, but doing so when you also already operate 777s is really not smart.

AWS is changing bit by bit. What was absolutely understood during the first couple of years AWS went public, is now different. That aircraft fleet type has its uses, their specific and need to be handled correctly to be successful.


Talentz

[gazzz0x2z]

+1 with Talentz. What is true in some circumstances, is not in others.

My fleet choices in Vietnam(55% relative staff cost) are not the same than in the USA(192% relative staff costs). They are not the same in HAM(lots of medium European destinations) than in ARL(huge domestic market concentrated on a few short lines). They depend on opposition or kind of game(I went full DC9 last regional challenge, in the 2015s, and I was first in all rankings before real life called me to heal my son - in a normal game, it could have been suicide). I'm flying nearly only 7-7 schedules in GW3, but none yet in GW2(it has to change, but for starting reasons, I could not dream about beginning like that). I flew pax leased IL96s from Algiers, and actually did profit for a few years with them. I filled Europe with Fairchild metros and had 609 destinations, pre-cargo. I owned more than 50 IL12s last GW2 in WAW, and they actually gave me an edge against my opponent there. I have not ideologic problem flying 12345_7, even LH if the situation justifies it.

I never BK'd, I was 14th in scoring in ALG, 8th in score in WAW. I think I can say I know how to play. Absolute rules are far from absolute. 12345_7 transatlantic flights have their use, for example, which I learned mentoring one of the best players of the game. I'll keep it for me, that's very advanced tactics. It's a bad idea most of the time, but there are cases when it's kickass. Despite losing 10% of plane use. Cost is not everything. One has to look at the overall picture.

748 is overall a dangerous plane, like the metro, like the IL96, like the A148(I flew 720 of them, once, before the achievement), like most soviet steel(bar the SSJ). It is still playable, and can be, in some circumstances, be the best tool for the need of the moment.

But that's often a question of skill. I'm pretty sure Schro, Frimp or Elladan can kick most of our backs using only soviet steel scheduled 12345_7. Conversely, a good but not excellent player will be exterminated by the best players, even if he follows all the guidelines. I can see them, the guys who stick to "best" fleet groups, have excellent scheduling, but fail in using it the bast way as the game unfolds. The best players, IMHO, are able to adapt their plans to changes, while the good ones simply follow their plan. And that's a biggest difference than using 12345_7 against 7_7, or using the best airframes against surprising ones.

What is important is to understand why, in most circumstances, 748 is dangerous. Which tells you when it might be a better idea.

[knobbygb]

As for 12345-7 scheduling, I was flying 1234567 scheduling, but with the Saturday flight bumped up a few hours. For example, on a 777 from Toronto to Algeirs, a flight that departs Thursday arrives back in Toronto on Friday at 13:00, and then takes off again at 18:00 (all very rough estimates). Not enough room for A check. So the Saturday flight takes off at 15:30 instead and arrives back at 10:30 on Sunday, with an A check at 13:00 and then take off at 18:00 again. Is there a penalty for doing this?

There's no penalty at all in terms of having one weekly flight at a different time.  I think what was eluded to is that, if you have 'not quite' enough gap for the A check, that means you probably have slack of somewhere between 4hrs and 6.5hrs per day (you need 6hrs 30 min for an A check on A330/777 due to min turn around time being 90 minutes). That means typically 24hrs to 39hrs per week that your expensive wide-body is sat idle, neither flying nor undergoing checks.  As you can see, you could easily fit at least one more weekly trans-Atlantic turn into that time, so it is nearly always worth going 7-day scheduling on all wide-bodies. 

For OCD scheduling geeks wanting the 'perfect' schedule, the ideal non-7-day route length (including turns at each end) for a 777/A330 is 23hr 05min. This allows for the times to be staggered by 55 minutes EVERY day so that a single route can be flown 7 days per week with 1% turns, A-check and no slack time whatsoever. (Actually you'll find that you have to cut just one of the turns by 5 minutes to fit this in). This would be, depending on winds and taxi times at bigger airports, a route of just over 3600nm

[wilian.souza2]

E) The penalty for using 12345-7 scheduling is inefficiency. I would always go 7-day on widebodies, even transatlatic. As for 737, that depends on the airport's route profile, but in North America (including Canada) with its many routes > 1k nm, it does make sense and adds efficiency to your fleet.

Not at all! I use this kind of scheduling on frequent domestic routes whenever possible (need for new flights and aircraft with free schedule available due to the time separated for an A check during the day, which is the case for the ones designated for red-eye flights) and on ultra - longhauls. If you have few ultralonghauls to explore (less than 3), flying them 6 times per week will avoid you to need to buy one extra aircraft per destination, so you can use for example 2 aircraft to cover a route up to 9000NM - each aircraft will fly there 3 times/week.