Hey everyone
Im running Berlin Direct from Berlin Tegel. Many of my routes solely belong to me and there is enough demand to justify my fleet of various aircraft. However, despite a relatively generous cut in pricing (between 10-12%) and some apparently decent marketing, the flights arent making a massive profit with load factors ranging from 93% right down to 49%.
Im just presuming this is because of the difficult situation with regards to a divided Germany at the time (Dec 87) and i guess as of Dec 89 (collapse of the Berlin wall) things will massively improve? Other cities in the county have rather profitable airlines like Frankfurt and Munich and I feel that all I can do is lease aircraft as opposed to buying aircraft out right which would again, trim alot of my costs.
Can anyone help with this...am I right in my presumption or is there something further?
Many Thanks,
Ben :)
Well your company image is quite low - that might be one factor
Quote from: starrymarkb on April 18, 2012, 09:43:41 AM
Well your company image is quite low - that might be one factor
It tends to be the main reason..As CI goes up, so does load factors.
The only other factor really in that case is looking at flight departures. I think sim pax prefer flights leaving between 0500 till 0000. As long as there is no competition.
starrymarkb - with regards to my company image...it seems to be stagnating. the most its climbed to is 27...then drops to around 20 and slowly makes it way back up.
knutm1980 - theres a curfew on flights from TXL/EDDT 23:00-06:00 so all Euro flights comply with this. My only long range flight is ORD/KORD.
Just a question with airport growth and pax demand...do they increase annually - e.g Jan 1st? Or will Berlin - Warsaw showing 80pax per day reflect reality?
Many thanks,
Ben :)
Pax demand increases with time, might be worth searching the forum for a greater explanation of it...I just play the game, don't get into the coding of it though some here seem to have some good info on that.
Company Image is increased with more 'general marketing' campaigns. It's expensive, but it's the only way. Other things that affect company image is cancelled and delayed flights (negatively). As far as I gather, all airports are modeled on as close to possible available, real life growth/demand. Hope that helps.
many thanks knutm1980. What i've done then is employed a couple of extra marketing guys with a slight pay rise to keep them extra happy. Added a couple of route specific campaigns and 2 general ones :)
And thank you for the help with regards to airport demand increases.
Many Thanks,
Ben :)
Supposedly, the route specific campaigns don't matter unless your competing with others. I think if you spend about 10% of your total income, you'll see your CI grow for a good while..there are some milestones where it might stop, if I recall correctly it's 70 & 90. It costs significantly more to get past these. As for extra staff, not sure..I've left my on automatic, I recently cut a massive chunk out of my marketing budget and its started dropping quite quick..but need some cash injections and not bothered with 100 company image anymore.
Knut is right, route specific marketing only rises your route image a little faster after you opened a new route.If it´s 100, no more effect. It gets there automatically anyway, if you keep flying the route. Personal staffing above 100-102% is senseless. Keep that at automatic unless you cut back aircraft types or routes, because the system would not fire anyone automatically, it just hires as needed.
Company image is very important. 10% of income for general campaigns is a good advice, but if your planes are somewhat older or you are flying to a lot of destinations just once daily you need even more than that.There are several steps where CI stops rising, and you will have to spend a bigger percentage of income to let it grow further.
Another thing that you need to improve a bit is on your departure ponctuality, because passengers like to depart on time, maybe you need to give a bit more time on the turnarounds and leave a bit more of time between flights, don't forget that departure ponctuality affects your company image. Try to rework your flights and try to improve that poctuality to somewhere between 75 and 80% for a start. :)
Digifreak - this is the catch 22 that im in. I am more than happy to get another couple of aircraft to share the workload however thats more leasing costs.
Thank you all for the help so far. The plan is to cut route specific ads aswell as leasing a couple more 737-200adv's to share the routes.
Will this increase profitability though? Would it help to perhaps trim the ticket prices once more to try beef up the load factors?
Many Thanks,
Ben :)
The more routes and aircraft you can have in the air as long as possible the better..You pay for the fleet commonality, so say if you have 10 of 1 aircraft fleet vs 1 plane, you'd be getting better value for money. Working out of time restricted airports does give you a disadvantage immediately though. Some airlines are able to have their planes in the air for a lot longer. Not sure if planning routes to depart and have them come back in the morning would solve this or not.
Thanks everyone for the help.
Added a few marketing campaigns aswell as slashing the route specific ones and my CI has grown from 21 this time yesterday to 31 now :). and I must admit, I have noticed a slight improvment in LF figures. Y is around the 70% mark approx. C has been floating around 60% and F although still low has climbed from about 10% to 25% :)
Ive decided against completely re arranging my timetable at this stage as it seems a logistical ball ache :laugh: so as and when new a/c arrive in the future I will structure the timetable a bit better.
Also im wondering if its worth adding up a second base at this stage? Does that do anything for CI? or is that too costly seeing as my finances are only just about balanced?
Many Thanks,
Ben :)
Quote from: Benny_Ben1989 on April 19, 2012, 02:18:08 PM
Thanks everyone for the help.
Added a few marketing campaigns aswell as slashing the route specific ones and my CI has grown from 21 this time yesterday to 31 now :). and I must admit, I have noticed a slight improvment in LF figures. Y is around the 70% mark approx. C has been floating around 60% and F although still low has climbed from about 10% to 25% :)
Ive decided against completely re arranging my timetable at this stage as it seems a logistical ball ache :laugh: so as and when new a/c arrive in the future I will structure the timetable a bit better.
Also im wondering if its worth adding up a second base at this stage? Does that do anything for CI? or is that too costly seeing as my finances are only just about balanced?
Many Thanks,
Ben :)
Bases are only marginally profitable even with a bunch of profitable aircraft due to their huge added costs. Unless you have reasonably filled up your HQ airport, I would not even think about opening a base.
C and F load factors improve once your CI gets over some threshold..can't remember how much now, but from 50 onwards I think it should get you into the green, if the demand exists.
As far as opening up a new base, I'd say try to exhaust as much at your current airport first..as you can only lease a couple of planes a day straight of the market, trying to expand at two bases may slow you down and leave you vulnerable to competition. Don't think it matters anything for your CI how big you are.
Good luck, it's all about learning the ropes really..I can structure my LH flights quite well, but I'm terrible with shorthaul..not even sure if I have a bunch of different planes doing the same route at the same time, which doesn't count as 2 flights but 1, so you get punished by competitors who space them out 1 hour apart and get the frequency bonus. Looking at fleet utilization, I'm about middle of the tree...but I suppose it comes down to getting with grips with flight times, etc..slow/fast aircraft and turnaround times.
But totally agree..rearranging a big schedule is a proper ballache. I did manage to get a system when I played previously some years ago with staggering heeps of planes and getting 7 destinations on 7 planes to fit..but it takes planning.
Cheers guys :). Youve all provided me with some good advic and kind have noticed results already. Just wish I knew this when I started...could compete with the big boys :laugh:
Many Thanks,
Ben :)
What I do when starting an airline is right off the bat I cut my pay completely - over the long term, I save a LOT of money (seeing as you're paying yourself for no reason whatsoever). Also, try cutting the actual amount of routes you fly and stretch them out a bit - for e.g. on mainline aircraft if your minimum turnaround is 40 mins, maybe set it at 60 mins and cut any routes that are over the time limit. Generally cut the smaller routes because they won't return as much income as bigger routes would. Also, fly the big routes during the peak hours, and the smaller routes (Warsaw being at 80pax/day would be a good example) on the off-hours; this maximizes your profitability on your larger routes while still generaling income on the smaller routes. When you set long turnarounds it gives breathing room for your routes to allow for any delays that might appear, and this increases your CI because your departure punctuality is increased - in turn, this generates more income because more passengers want to fly your airline, and you can slowly lease more aircraft and increase frequency on your routes. I would go for the biggest routes first, if possible, and fill them up as much as possible before expanding into the smaller routes. Generally, by the time this takes place the smaller routes are going to be a bit bigger. Hope that helps. :)
Cheers,
ICEcold
Many Thanks for that guys. Ive got another 3 leased + 1 new a/c coming then after that im gunna let the airline blossom for a bit before I throw in a massive expansion plan :)
Once again, Many thanks,
Ben :)