How are airlines profitable in the beginning of the game?

[xx420mcyoloswag]

When a new games starts there appears to be airlines that are making a profit yet even when I sell seats for one dollar on routes, my planes don't have a high occupancy rating. Am I misunderstanding something?

[Sami]

Check the concept of Route Image. At the very early stages you just need to be patient.

I recommend using the Easy Start wizard mode to get the most suitable routes and airports for you, and then just sit tight for a few days and you'll see the airline grow and be profitable.

[Cardinal]

when I sell seats for one dollar on routes

Don't do that.

[Andre090904]

When a new games starts there appears to be airlines that are making a profit yet even when I sell seats for one dollar on routes, my planes don't have a high occupancy rating. Am I misunderstanding something?

It all depends on fleet choice, route choice, and scheduling. If you fly a plane that fits your routes (demand, distance) at favorable times, then chances are you will be profitable. If not, you made something wrong. Of course that is a lot simplified.

I started my last 2 game worlds in Chicago and Tokyo, not precisely the easiest airports around. I had about 8 competitors at the start. All you need to do is figure out what demand you want to fill (your niche) and what planes and routes are suitable to begin with. If you have the choice between a 500 demand route and a 50 demand route, obviously you would go for the juicier route. Even with a low route image, you would still get a decent load factor out of there. And of course don't start with the shiniest (new, expensive) planes, but lease some cheap (older) plane that will still do the job nicely.

If you are a small airline, you need to be very careful about your steps. You don't have money to spend. In other words, don't feel like a king who can do whatever he wants without consequences. You are still a small weakling who needs to learn how to walk. Everybody has the same money at the start. If you are unprofitable while others keep expanding, then that's because they did something better than you. Easy as that. Compare your fleets, your routes, your schedules etc...

Also, you can always ask for a mentor if you like.

[tungstennedge]

When a game first starts, every route you make will have 0 route image. Route image grows naturally over time, but at the beginning, it affects the proportion of the demand you can get.

I don't know the exact numbers but my guess would be at zero route image, even on a route with no competitors you can grab ~30% of the demand.

That means if you fly a 162 seat 727a on a route with 162 demand you can only grab around 30% load factor initially, not very profitable.

However, for example my first route was LAX to JFK. This route had 800 open demand at the beginning of the game and my first flight had almost 65% load factor. This meant I was immediately profitable. I used the profit from routes with less but still good demand and eventually as route image gets to 50-60 for passenger short haul you can grab almost all of the demand, so 162seat 727 would have 100% lf on 162 demand route.

Also its important to not charge low prices. This game in counterintuitive because lowering pricing below standard doesn't increase LF at all. This is to stop big airline from pricing out smaller ones, but it also means you cant boost LF with price, you just have to wait for image to go up. The best pricing is around 1.05 times default pricing. This gives best LF in competition routes, where in monoploies you can easily charge +25 or more percent.

[gazzz0x2z]

The best pricing is not always 1.05, by far, but the overall message remains : try things with prices, and see what works for you. actual results will depend on opposition, on fleet choices, on seating choices, on route choice, on take-off/landing time choices, and plenty of other parameters. But still, the bottom line is what Tungstennedge and Cardinal say : do not lower your prices too much. Or even increase them. toy with them, experiment, take notes.

The rest is covered by andre090904. Chose a strategy, and try to stay coherent with it. And if you have to change, try to stay coherent within your new strategy. You cannot cover all niches, especially in the beginning(and even later, though later you can afford a little bit more diversity). Some people start with long routes where opposition is slower to appear(tungstennedge's example), some other(like me) prefer stacking a lot juicy short routes at once to get even more profit at start, even if it means that profit will plummet quicker as opposition increases. Matter of style. Both approaches have been proven to give good results - when properly executed.

[Maarten Otto]

Another advice I would give you is to undercut on seats. If for example a route has 100 demand and two other airlines are on that route supplying 120 seats in total, you can still run this route at a profit. Just go tiny. For routes up to 300NM you can get away with a Beechcraft 15 seater prop. Run the route twice a day and you will find it to be quite profitable. I currently have a 17 seater B99 that is $4K in leases (week) and earns me $190K a week. I just bought one for $245K, will convert it to 15 seats and putting it on longer routes. I expect somewhere of 150K per week in return. Problem with small planes are slot prices as these will be out of proportion over time. On the other hand, you might be able to fly to small fields and milk the route at 240% of recommended ticket price.