Help with Ticket Prices

[gsa2k]

Hello All,

I'm a newbie to this sim, so far very intriguing gameplay...I'm hooked! In getting to know the ropes I am having some challenges understanding low LF's for cities that are under-supplied. I am following the tips and suggestions, creating routes only during peak hours, marketing the airline and also lowering ticket and cargo $$ a couple of times, only to see marginal changes in LF increase. Is there a way in the sim stats to see what other airlines in this gaming world are charging ticket prices for routes that I am competing for? Any help would be much appreciated.

Thank you in advance.

[Tha_Ape]

Welcome to AWS, then

No, no way you can know what the competition is doing.

However, let's say most situations require you to have prices within 10% of recommended. If you have exclusivity on a route and supply only 80-90% of demand, then on Std seating you can ask +20-25% and milk your pax, this will work. But if someone comes on this route and charges recommended, then your LF will suddenly become very low.

In the same (opposite) way, lowering prices compared to recommended doesn't have a huge effect, and more than 10% below will actually become counterproductive (you'll increase your LF but earn less overall).

Overall, micromanagement is very nice until it becomes cumbersome because you have a huge airline. It sure is important when you start (gives you some edge), and playing with it wan also help you understand the mechanics of the game, but most "large" airlines set recommended +3% (or something like that). Every game-year or so, reset prices to recommended and then re-add these 3% ("routes -> price management"). Because you have so many situations. Low LF due to competition can't be treated the same way as low LF due to law demand. Etc.

Anyway... Hope this helps. And know there are some much better guys than me on this precise matter.

[LemonButt]

Based on what I've read from other players who have experimented with prices lower than recommended, the net effect in terms of profit is the same or worse, so you never want to set prices below the recommended.

For me, I don't compete "to win" but I compete "for profit".  Thankfully, most players are competing "to win" which makes competing for profit that much easier.  I don't add capacity to routes unless the extra flight is "over capacity".  What the hell does that mean?  If there is a route with 1500 demand, for example, and the competition is flying 10x daily with 150 seaters, that means they are flying full with an equitable distribution being 150 pax per flight (assuming no other factors).

If you add a 100 seater to that route, you'll have 1500 pax spread across 11 flights which is 136 pax per flight.  Since you're flying 100 seaters, you're going to be turning people away due to not having seats for them.  What airlines do IRL is increase their prices so they aren't turning anyone away--the pax aren't showing up and "self removing" themselves from the flight since it's too expensive.  So if you are flying a 100 seater with 136 pax showing up you can raise your prices to a maximum of +30% or so for Y pax and you'll still fly full.  The max pricing you want to use for C and F class is going to be higher.

Your competitors will now be basically getting 1400 pax across 10 flights and instead of flying full with 150 pax they'll be flying with 140 pax, which is still a high load factor and they'll still be quite profitable.  However, they won't be able to raise their prices without seeing a hit on their load factors--just because it says demand is 1500 pax doesn't mean all 1500 will fly as if prices are too high they'll seek alternatives or just stay home.  That's why you can't just raise prices to +900% on a route you have a monopoly and print money--the pax won't show up.

You can keep adding 100 seat flights until you reach a limit--i.e. if there are 1500pax and you're adding 100 seaters, the route can handle 15 flights with you still flying full, so if your competitors have 10x daily you can add 5x daily and end up flying 5x daily 100 seaters full while the competition is flying 10x daily with 66% load factors (100pax).  Note this erodes your ability to increase your prices somewhat since increasing prices will mean flying less than full.  However, if you're getting 70%+ load factors on pretty much any flight you can expect to be making money with few exceptions like ultra long haul.

The best case scenario, even on routes with a monopoly, is to satisfy demand and increase your prices so you are flying with 70-90% load factors--flying full means your prices are too low or you aren't fully supplying the route.  If there are 300 pax/day and you are flying 50 seaters, you should fly it 6x daily to satisfy demand as you will carry more pax/make more money, but also keep competitors from adding their own capacity on top of you to fulfill the remaining demand you haven't taken.

There are MANY additional factors such as route image, company image, departure time, etc. so this is an oversimplified example, but in most cases will work.