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Online Airline Management Simulation
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Author Topic: Huge Bankruptcies in Chicago Cause Chaos  (Read 246 times)

Offline Andre090904

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Huge Bankruptcies in Chicago Cause Chaos
« on: August 09, 2019, 11:49:12 AM »
Chicago based carrier Eng Air, one of the biggest airlines in the World with over 700 aircraft, filed for bankruptcy today, leaving thousands of passengers stranded. Experts claim to know the reason for the airline to fail. Apparently, a combination of an outdated fleet with high maintenance costs and an expensive fleet renewal attempt caused astronomic expenses which the airline could not cover in this highly competitive market.

With over 600,000 weekly passengers, Eng Air had the highest market share in Chicago. Just a few days ago, another competitor called American Trans Air, also filed for bankruptcy. Passengers will now need to rebook to either Arrowhead Airways or Southern Express to reach their destinations. However, with over 10 bankruptcies in the last 20 years, locals are well accustomed for airlines to fail and will adapt accordingly.

The experts see Chicago O’Hare as a crucial hub in American air travel, yet discourage other airlines to open a base there as the remaining airlines are still heavily fighting over market share and load factors.

Offline Talentz

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Re: Huge Bankruptcies in Chicago Cause Chaos
« Reply #1 on: August 09, 2019, 04:27:59 PM »
Guess that's how you won in a GW you fell behind, eh?  :P


Congrats!! For a brief moment, I thought you might actually lose this round xD



Talentz
Co-founder and Managing member of: The Star Alliance Group™ - A beta era, multi-brand alliance.

Offline Andre090904

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Re: Huge Bankruptcies in Chicago Cause Chaos
« Reply #2 on: August 10, 2019, 08:37:21 AM »
In the end it's all tactics. I usually prefer the slow and steady growth with props which are easier to handle. I still never had a single jet in this game world! I voluntarily completely neglected long haul except a few routes where I pushed Eng Air a little. I was behind in terms of profit for a long time when Eng Air made huge amounts of cash. His problem was his fast growth. He always wanted more and forgot to update his fleet. He opened bases in JFK and BOS while his fleet got older and older. Sure, he had about 300% my revenue and 500% of my cargo. But if you fly 24 year old DC6F which cost 5m in a D-Check, you will have a bad time. Not to mention his Viscounts and DC8 also entered a D-Check wave. And of course every single route was heavily oversupplied. You can't pay an old fleet like that. And then he had like 250 new 737 on order where he only paid 20% upfront. Tiny margins, huge expenses. Won't work.

There are times when you can grow by becoming smaller. I got rid of my longhaul DC6 regularly, losing CI, but saving lots of money on routes which were simply not profitable. Not to mention staff costs in the US. I also regularly renewed my DC6, never reaching an age of 20+ years. I preferred to keep my fleet young and my network rather small than to constantly expand. Once you are too big in a competitive environment, you simply cannot handle your fleet anymore. Eng Air was the perfect example.
« Last Edit: August 10, 2019, 08:40:22 AM by Andre090904 »

Offline gazzz0x2z

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Re: Huge Bankruptcies in Chicago Cause Chaos
« Reply #3 on: August 10, 2019, 08:35:40 PM »
I have to support Andre entirely. Overextension is a real danger in this game. What he says is less true in medium length games, as modern times, but in very long game,you'll have to manage several transitions, and those transitions has to be prepared asearly as the previous one begins. You need to know what will be your needs very long in advance.

Several players build huge profitable companies, yet to not finish the game because they failed to plan transition properly. That's one of the most difficult aspects of the game. One always has to think "and 24 years later, what will I do with this junk?" before even ordering the planes.

 

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