What is the key to making money flying small A/C to low demand airports? For instance, flying a small jet to 4/5 destinations (52 capacity/ 30 demand on average) I see so many airlines with small aircraft making money..what are the dynamics?
I operate smallish jets. (1-11's then onto BAe 146.)
Pretty easy if you can get a niche market
the key is accurate pricing. Too high, and your LF plummets. Too low, & your profitability is a joke.
That, and the classics : full plane use, clever planning, go where others are not, etc...
smaller aircraft have small overhead to fly most of the time. you make money but you don't make a lot.
larger aricraft can make more money if they fill up. So if you have a route with 150 passenger you would make more money with 1* 727 then 3* fokker f27.
Quote from: Aoitsuki on July 30, 2015, 02:45:13 PM
smaller aircraft have small overhead to fly most of the time. you make money but you don't make a lot.
larger aircraft can make more money if they fill up. So if you have a route with 150 passenger you would make more money with 1* 727 then 3* fokker f27.
true, but as soon as competition enters the dance, things change drastically.
There is a very short range line in GW3 with 1000 demand between 2 islands. I fly 15 daily flights with ERJs(that's 750 capacity), opposition flies respectively 10 A319 flights(around 1300 capacity) & 11 A320 Flights(around 1650 capacity). It's a bloodbath. I'm not making a lot of money, but the 2 other guys(both based at the other side of the route, fortunately for me) are probably making even less. Likely, when counting overhead, they are losing money, even if they probably transport slightly more passengers per flight than me.
That's one of the joys of the game. Under-dimension your planes, and you'll not make much money, and you'll stay small. Over-dimension them, and the opposition will reduce you into pieces.
I'm tempted to land a 4th ERJ145 there(for 20 daily flights & full demand coverage), but I'm not sure how the "1 flight per hour" works there. I've got flights at 500, 600, 700, 930, 1030, etc..... so never 2 full hours of emptyness here. So it might not be as useful to take a little bit more of the market. I'm not sure. Still, it's funny to see them fight to the death, and then to come to add some spice to the fight.
That's a competitive game, and if something is too good to be true, expect opposition to attack the position.
Quote from: gazzz0x2z on July 30, 2015, 03:33:28 PM
true, but as soon as competition enters the dance, things change drastically.
There is a very short range line in GW3 with 1000 demand between 2 islands. I fly 15 daily flights with ERJs(that's 750 capacity), opposition flies respectively 10 A319 flights(around 1300 capacity) & 11 A320 Flights(around 1650 capacity). It's a bloodbath. I'm not making a lot of money, but the 2 other guys(both based at the other side of the route, fortunately for me) are probably making even less. Likely, when counting overhead, they are losing money, even if they probably transport slightly more passengers per flight than me.
That's one of the joys of the game. Under-dimension your planes, and you'll not make much money, and you'll stay small. Over-dimension them, and the opposition will reduce you into pieces.
I'm tempted to land a 4th ERJ145 there(for 20 daily flights & full demand coverage), but I'm not sure how the "1 flight per hour" works there. I've got flights at 500, 600, 700, 930, 1030, etc..... so never 2 full hours of emptyness here. So it might not be as useful to take a little bit more of the market. I'm not sure. Still, it's funny to see them fight to the death, and then to come to add some spice to the fight.
That's a competitive game, and if something is too good to be true, expect opposition to attack the position.
Kinda incorrect, I was making my statement about smaller aircraft can profit in lower demand (such as 50 seat), however if you have 150 demand and you have a choice of something like md80 or CRJ the md80 will win out.
It is the same for competition, if you are flying oversupply the lessor amount of aircraft you commit to the route yet still produce the same oversupplied demand, you will lose less. Especially an expensive aircraft like ERJ over a very short range in your description. Assume your route if all 3 airline provide the same amount of capacity(let's say 1000 each), and all in leased term, Most of time 320 will profit the most, while 319 should come second and you come last. This may be different if you compare a prop verses a a320.
I don't get it. There is roughly a 33%/33%/33% load factor there. My ERJs are 55% Full. That's not much, but, it means their Airbuses cannot be more than 30% Full.
If they were 50% Full, of course they'd earn much more than my ERJs 55% Full. Even counting per seat. But While I've got 400/750 seats occupied, They've got 400/1200 & 400/1600 seats occupied. I never flew A320s, but when I fly 737s, who are similar, I don't make any money at 35%LF.
Turboprops are cool, but you don't fly them as often, so the leasing cost has to be paid by less flights. And they lack long-range capacity(besides the Q400, a near-cheat plane). There is also a non-economical, practical advantage to regional jets : when lines grow bigger, you can easily replace them with bigger jets. For turboprops, you have to reorganize everything when going to bigger planes(read : jets in the 100seats area). When a ERJ145 costs 15M$ and a Q400 the double, for only slightly superior seat.NM capacity(the Q400 is quick, but not that quick), things are more balanced than a single look at the fuel usage.
And remember : the fuel consuption is per hour, not per NM. Turboprops drink less fuel per NM, sure, but in reality, numbers are not as impressive as they look. Turboprops have their qualities, but don't be fooled : fuel is not the only thing.
Correct me if Im wrong. Your competition does not care about LF. I see most of the biggest airlines raking in billions flying at 50-60% LF. Flooding markets and flying all times of night. To me it is not realistic and one of the draw backs of the game. I only try and take a piece of the market and fill my planes and make a few bucks. I learned early what dominating a market took and I dont like it.
Quote from: tdf42 on July 31, 2015, 10:11:12 AM
Your competition does not care about LF.
Nobody should care about the LF really. All you are interested is the profitability.
Well, okay, that was a bit too harsh. LF is a tool for adjusting the pricing and destinations for max profits. LF 99% is bad since it means you can sell the tickets with a higher price. And LF 60% probably means you could earn more by choosing another route, or possibly (but rarely) cutting prices to gain more market share. But if you have no choices of routes, then LF60% and the probable "decent" profit it makes is good enough.
Were you offended by my statement? Do not get me wrong, I enjoy the game, but as you guys rationalize how load factor is not important and seeing big airlines fly meaningless half empty flights in the middle of the night I will use what has been told to me on other occasions when I voice my opinion..its a game and thats it.
Quote from: tdf42 on August 01, 2015, 03:49:54 AM
Were you offended by my statement? Do not get me wrong, I enjoy the game, but as you guys rationalize how load factor is not important and seeing big airlines fly meaningless half empty flights in the middle of the night I will use what has been told to me on other occasions when I voice my opinion..its a game and thats it.
The number of seats sold, price the seats are sold at and the cost to operate the flight + overhead matters. Load factor is a statistic that can be derived from that information, but if you make choices based upon load factor then you will miss the forest by staring at a single tree. There are many examples where a half load factor flight will be more profitable to an airline than a full flight. The best and quickest example would be to compare a 707 (suppose around 150 seats in a mixed config) to a DC10 (supposing 300 seats in a mixed config). Suppose you place them on identical 150 pax demand routes at the same price and that happens to result in you selling 150 tickets for each flight. In that case, the 707 will run a 100% load factor and the DC10 will run a 50% load factor. However, the DC10 costs less to operate by a significant margin (specifically, fuel and pilots). Thus, the low load factor route in this case prevails from a profit perspective. If you'd like to see how this works in action, poke your head into GW4 in about 5 game years and watch the large 707 fleets splat airlines into a wall.
The example you gave is not what I am talking about. Not even close. My example... A huge multi billion dollar airline sends 300 seats to a 150 PAX demand airport. No strategy involved no weighing of cost...just flood the market. No way he gets more than 50% at a loss or small profit, what does he care? I see little sensitivity to our out loud thinking when this happens and we small potatoes with tight costs and profit margins and not generating high revenues probably dont deserve any, but this is frustrating and commonplace. I have had a multi billion airline when I see them neglect a route and I fill in open demand come back and try to flood me out on one of my markets that I have to myself.
Quote from: tdf42 on August 01, 2015, 03:49:54 AM
Were you offended by my statement?
No, not at all.. (if my message had that 'tone' then it was not intentional)
Still, on this line, planes carry around 30 pax each. What is more economical : carrying 30 pax with a ERJ145, or carrying 30 pax with an A320? Or even 35?
Small planes have their place, you just have to make sure you use them where they are useful. Like any other plane.
Quote from: tdf42 on August 01, 2015, 06:01:47 AM
The example you gave is not what I am talking about. Not even close. My example... A huge multi billion dollar airline sends 300 seats to a 150 PAX demand airport. No strategy involved no weighing of cost...just flood the market. No way he gets more than 50% at a loss or small profit, what does he care? I see little sensitivity to our out loud thinking when this happens and we small potatoes with tight costs and profit margins and not generating high revenues probably dont deserve any, but this is frustrating and commonplace. I have had a multi billion airline when I see them neglect a route and I fill in open demand come back and try to flood me out on one of my markets that I have to myself.
That's just one of the many factors in play. There are some multi-billion dollar airlines out there who are run by players that don't understand how the game works and simply luck into having a big airline. Those often survive for decades longer than they should for who knows what reason, but will often fail in a spectacular manner at some point. Another factor is the illogical application of the fleet commonality costs - large airlines are essentially limited to 3 fleet types at any given time (i.e. when I had 950 airplanes in the mid 1980s, adding a 4th type took commonality costs from 26m/monthy to 290m/month, which would have bankrupted me if it lasted long). This results in non-optimal aircraft for some routes. For example if it's the right size demand and range for a 757, the player will probably fly something larger on it to either fill a 7 day scheduling hole for a few bucks of incremental cash with the logic that the other healthier routes on that rotation have already covered the fixed costs of doing business. The alternative would be to add the 757 as the 4th fleet type and lose your shirt.
Yes I think it will be very interesting as we near 9-11 and more oil price hikes how they will fare. The commonality is hurting me b/c I need planes to replace my DC 910 and have to use the 931 which is bigger type than I need for my regional routes but I can not afford a 3rd fleet. The life of a small airline.
Quote from: tdf42 on August 01, 2015, 07:05:57 PM
Yes I think it will be very interesting as we near 9-11 and more oil price hikes how they will fare. The commonality is hurting me b/c I need planes to replace my DC 910 and have to use the 931 which is bigger type than I need for my regional routes but I can not afford a 3rd fleet. The life of a small airline.
The penalty for your third type is rather negligible....
You guys seem to be forgetting one key factor here: Frequency. As far as I understand it, given everything else is the same, the person who flies more routes will get the larger market share. That is where prop planes make a killing on SH routes.
You also have to take into consideration that there are rules in this game that do not let you supply more than a certain amount of demand on a route per day, for the sake of fair competition. In these cases, blocking seats is a good strategy, because you can fly more routes without hitting that maximum supply (Which is 200% according to the game manual). So even though you have a lower LF on the plane as a whole, you actually get more of the market share.
For example, I have a route where my competitor is flying more flights than me, and if I fly any more planes to that location from my available fleets, I'll hit that oversupply maximum on the first flight. In this scenario I've added 2 more flights with an ATR75, while blocking the seats on all the flights on that route to 55 (if I remember correctly). That way, I fly more frequently, and I'll get more of the market share, even though I'm not completely loading my airplanes. And the planes are in-fact making money because the overhead costs of the ATR75 is quite low, even if you're leasing it.
Quote from: schro on August 01, 2015, 07:28:32 PM
The penalty for your third type is rather negligible....
Why do you guys say that? I added ATR to fly the routes I talked about earlier and it sent my cost up 2.5 times. That is not negligible. Is it negligible if you have billions in your pocket?
Quote from: Lakitel on August 01, 2015, 11:31:18 PM
You guys seem to be forgetting one key factor here: Frequency. As far as I understand it, given everything else is the same, the person who flies more routes will get the larger market share. That is where prop planes make a killing on SH routes.
You also have to take into consideration that there are rules in this game that do not let you supply more than a certain amount of demand on a route per day, for the sake of fair competition. In these cases, blocking seats is a good strategy, because you can fly more routes without hitting that maximum supply (Which is 200% according to the game manual). So even though you have a lower LF on the plane as a whole, you actually get more of the market share.
For example, I have a route where my competitor is flying more flights than me, and if I fly any more planes to that location from my available fleets, I'll hit that oversupply maximum on the first flight. In this scenario I've added 2 more flights with an ATR75, while blocking the seats on all the flights on that route to 55 (if I remember correctly). That way, I fly more frequently, and I'll get more of the market share, even though I'm not completely loading my airplanes. And the planes are in-fact making money because the overhead costs of the ATR75 is quite low, even if you're leasing it.
Again, point missed. You are flooding and over supplying a route..the both of you. To me that is not a strategy.
Quote from: tdf42 on August 01, 2015, 11:50:56 PM
Again, point missed. You are flooding and over supplying a route..the both of you. To me that is not a strategy.
Actually, I think you're missing the point. The point here is to muscle the other person out of the market. Yes, there is a large amount of route oversupply by both parties, but that's not the point. The point is to starve the competitor of market share until they either leave that route or get BK'd. It's really that simple.
Quote from: tdf42 on August 01, 2015, 11:43:25 PM
Why do you guys say that? I added ATR to fly the routes I talked about earlier and it sent my cost up 2.5 times. That is not negligible. Is it negligible if you have billions in your pocket?
No, it's negligible in comparison to what a 4th fleet type does to your costs. Yes, adding a fleet type increases costs, but for the first 3 types, it is more of a linear scale, where each type's cost depends on the overall size/classification of it and the number of frames that you have. So sure, your costs may increase, but in general a dozen or two frames flying profitably will cover it. I would honestly be shocked to see your total commonality costs go up 2.5x by adding a third type (screenshots of before/after on the commonality page?).
What happens with the 4th type is that ALL costs for each fleet type are increased on a logarithmic scale based upon your total fleet size. Under 300 planes, it's really not a huge deal, and you can go up to 4-6 fleet types and still be able to grow most of the time. Once you get over 300, it becomes a grind, and above 500, it's unsustainable even with a fully owned fleet and monopolies in each of your bases.
Quote from: Lakitel on August 01, 2015, 11:31:18 PM
You guys seem to be forgetting one key factor here: Frequency. As far as I understand it, given everything else is the same, the person who flies more routes will get the larger market share. That is where prop planes make a killing on SH routes.
You also have to take into consideration that there are rules in this game that do not let you supply more than a certain amount of demand on a route per day, for the sake of fair competition. In these cases, blocking seats is a good strategy, because you can fly more routes without hitting that maximum supply (Which is 200% according to the game manual). So even though you have a lower LF on the plane as a whole, you actually get more of the market share.
For example, I have a route where my competitor is flying more flights than me, and if I fly any more planes to that location from my available fleets, I'll hit that oversupply maximum on the first flight. In this scenario I've added 2 more flights with an ATR75, while blocking the seats on all the flights on that route to 55 (if I remember correctly). That way, I fly more frequently, and I'll get more of the market share, even though I'm not completely loading my airplanes. And the planes are in-fact making money because the overhead costs of the ATR75 is quite low, even if you're leasing it.
Your understanding is rather misguided, however, it is consistent with what people that don't understand the game mechanics tend to write on the forums here....
So, a couple of quick points for you -
1. There is a nerf gun that will nerf your loads if you go over the "optimum frequency" for any given route (based on route length and demand). Of course, that number is not revealed to us, but you can find it by trial and error by adding frequency until your sales crater.
2. Frequency is ONE component of MANY that determine how many seats that you sell in aggregate on a given route. Many people believe that is the key to destroying your competitor, but it really isn't. It's usually the way to destroy your own airline. First of all, the overall game engine is "balanced" in a manner that it is virtually impossible for any one airline to bankrupt a well run opponent airline. This may be difficult to see, as most airline managers do make mistakes at some point. Second, dumping capacity on routes even if #1 was not in play will dilute your earnings. At most, I've observed frequency superiority with all other things equal to tip ticket sales 5-10% at the very most. So, in aggregate, if you're supplying 100 seats across 2 frequencies and then add a third frequency for 150 seats supplied, you MIGHT sell 105-110 seats, but pay 50% more in costs by operating that third frequency. Do that to all of your routes and you'll be in trouble rather quickly (as then all your opponent has to do is the Airwaysim equivalent of cow tipping).
3. Limiting seats will give you zero advantage and likely a quick path to bankruptcy if used in the manner you suggest. The ONLY reason that feature was added was for cases when routes were only able to be flown with large aircraft (due to range constraints) and demand wasn't quite there yet. If you're dumping capacity on routes with limited seats (also, considering item #1), you can go ahead and skip through the book to chapter 11.
Quote from: schro on August 02, 2015, 01:29:27 AM
Your understanding is rather misguided, however, it is consistent with what people that don't understand the game mechanics tend to write on the forums here....
So, a couple of quick points for you -
1. There is a nerf gun that will nerf your loads if you go over the "optimum frequency" for any given route (based on route length and demand). Of course, that number is not revealed to us, but you can find it by trial and error by adding frequency until your sales crater.
2. Frequency is ONE component of MANY that determine how many seats that you sell in aggregate on a given route. Many people believe that is the key to destroying your competitor, but it really isn't. It's usually the way to destroy your own airline. First of all, the overall game engine is "balanced" in a manner that it is virtually impossible for any one airline to bankrupt a well run opponent airline. This may be difficult to see, as most airline managers do make mistakes at some point. Second, dumping capacity on routes even if #1 was not in play will dilute your earnings. At most, I've observed frequency superiority with all other things equal to tip ticket sales 5-10% at the very most. So, in aggregate, if you're supplying 100 seats across 2 frequencies and then add a third frequency for 150 seats supplied, you MIGHT sell 105-110 seats, but pay 50% more in costs by operating that third frequency. Do that to all of your routes and you'll be in trouble rather quickly (as then all your opponent has to do is the Airwaysim equivalent of cow tipping).
3. Limiting seats will give you zero advantage and likely a quick path to bankruptcy if used in the manner you suggest. The ONLY reason that feature was added was for cases when routes were only able to be flown with large aircraft (due to range constraints) and demand wasn't quite there yet. If you're dumping capacity on routes with limited seats (also, considering item #1), you can go ahead and skip through the book to chapter 11.
I think that saying I don't understand the game mechanics because you make assumptions about my knowledge is misguided in itself.
1. I'm well aware that there is a nerf gun that hits once you surpass optimum capacity. From what I've read, and what I understand from the game, the general pattern is roughly thus:
<1k ~ optimal frequency is every 2 hours
1k - 2k ~ optimal frequency is every hour
2k - 3k/3.5k ~ optimal frequency is every half hour
3k/3.5 > ~optimal frequency is every 15mins.
2. I'm equally aware that many factors go into determining how many seats are sold. That's why I prefaced that statement originally with "Given all else being equal". It is beyond idiotic to assume that one factor will decide a win or fail, especially in a strategy/simulation game. Along with what you said, this strategy requires an extreme level of schedule micro-managing, to the extent that whole schedules can be shifted a few minutes here and there to make sure that you don't just dump insane amounts of supply on the line.
As I said, the game manual states that it is against the game rules to have 200% supply of any route. Personally, I don't think anywhere below roughly 150% would cause too much hassle. That is, *IF* your primary goal is to take out a competitor (and therefore not focused on making a profit but minimizing losses) and also *IF* you have planes that make this model financially viable for the route that you are flying.
Luckily for me, it's a short route and the ATRs are pretty good at serving that, even if they aren't filled to capacity.
3. Again, you make an assumption here that I didn't state at all. I said that blocking seats is a good strategy, if the reason for doing that is to increase the frequency of your flights without hitting the oversupply maximum*. And I never said you should block 50% of your seats. In the example I gave, I've blocked 55, which is a little over 20%, which really isn't that much at all.
So to conclude all that: All the things I said in my previous post was highlighting how useful both frequency and seat blocking can be in the strategy of muscling a competitor out. I never said it should be adopted as a standard business model. I never said you should run all your routes like that. In fact, I didn't even presume to say that this is the strategy that the OP witnessed. I merely highlighted how the technique can be useful under certain circumstances.
If you did follow this strategy as a standard model, then it would happen exactly like you said, which is that the whole airline would collapse under it's own weight.
Edit: I just wanted to add, that I'm not claiming I'm a master strategist and that I know every nuance of this game. I am merely saying that you shouldn't assume what people do and do not know, without even knowing the person.
Edit 2*: When I use oversupply maximum in this sense, I meant the 150% figure I quoted, rather than the 200%, in which case you would have quite a bit of trouble :P.
Quote from: tdf42 on July 29, 2015, 07:37:49 PM
What is the key to making money flying small A/C to low demand airports? For instance, flying a small jet to 4/5 destinations (52 capacity/ 30 demand on average) I see so many airlines with small aircraft making money..what are the dynamics?
Returning to the opening question, I'd like to weigh in. I'm currently running a regional airline out of William P Hobby with mostly Saab 2000s. I know a lot of people poo-poo Saab 2000s, but they have turned out to be a beautiful plane for my airline. The key for me has been to fly all the routes that no one else wants. At ~50ish seats, the Saab can get down to some pretty small routes. And though a turboprop excels at short routes, I have many of my Saabs flying longer legged routes mixed with shorter ones, and they do fantastically well.
Two things have helped me:
- A majority of my routes, no one else is flying. I can rake in monopoly profits (up to 200% standard pricing!)
- I can sneak into high demand routes that the big boys are flying because you can almost always fill a 50 passenger plane on a 500+ demand route! ;) and still use monopoly pricing (I have some up to 150% standard on competitive routes)!
One last thing that is huge, if you can manage it, use only one fleet type. I have two fleet types that serve all of my needs. This has helped
tremendously in keeping overhead down.
Oh, one other thing, if I had a route all to myself on which I am flying, say, 5 Saabs, and all of a sudden someone joins in, it is
really tempting to try to squeeze that person out of that route (how dare he take on my monopoly route!). This can work in the short term by lowering your pricing even back to standard can really keep the other person's load factors down for a long time since their route image is very low.
However, with any sort of half-way competent player, they WILL gain market share. In this case, swallow some pride and remove one or two of your flights from that route. Take those planes somewhere else where no one is flying and rake in monopoly profits again! In the meantime, sharing your previous monopoly route equitably allows you to maintain near monopoly pricing on that route and still make fantastic profit.
Hope this helps! :)
Quote from: JJP on August 04, 2015, 08:57:32 PM
Returning to the opening question, I'd like to weigh in. I'm currently running a regional airline out of William P Hobby with mostly Saab 2000s. I know a lot of people poo-poo Saab 2000s, but they have turned out to be a beautiful plane for my airline. The key for me has been to fly all the routes that no one else wants. At ~50ish seats, the Saab can get down to some pretty small routes. And though a turboprop excels at short routes, I have many of my Saabs flying longer legged routes mixed with shorter ones, and they do fantastically well.
actually saab 2000 is one of the crowd favorite, it is not popular due to normal airline during that year prefers to fly jet instead.
small aircraft has their advantage and limitation. it all depends where your airline is based and what your competition do.
Adding to what JJP said, I would go as far as to say small aircraft are EASY, just not ambitious.
Find a good size city within 500 km of lots of options. do a route-search, and filter by distance. Start with the shortest route that has at least 30 pax. Grab it, and move on by route distance. Find a large city for your overnight flights. Your first few planes will have 6 or 7 flights a day that no one else will ever challenge you on. Once you have those routes up to 60 or so RI, you have an aircraft with a very good ROI, it's just the initial investment is so small that you will never have an aircraft that goes toe-to-toe with a medium jet in overall revenue.
The business model is modest, you will never get big, but it is also fuel-shock proof and you will have almost no competition from other players. It gets boring, it is not satisfying to ambitious players, but it is a good way to get your feet wet on understanding game mechanics.
Quote from: Lakitel on August 02, 2015, 03:02:04 AM
I think that saying I don't understand the game mechanics because you make assumptions about my knowledge is misguided in itself.
1. I'm well aware that there is a nerf gun that hits once you surpass optimum capacity. From what I've read, and what I understand from the game, the general pattern is roughly thus:
<1k ~ optimal frequency is every 2 hours
1k - 2k ~ optimal frequency is every hour
2k - 3k/3.5k ~ optimal frequency is every half hour
3k/3.5 > ~optimal frequency is every 15mins.
2. I'm equally aware that many factors go into determining how many seats are sold. That's why I prefaced that statement originally with "Given all else being equal". It is beyond idiotic to assume that one factor will decide a win or fail, especially in a strategy/simulation game. Along with what you said, this strategy requires an extreme level of schedule micro-managing, to the extent that whole schedules can be shifted a few minutes here and there to make sure that you don't just dump insane amounts of supply on the line.
As I said, the game manual states that it is against the game rules to have 200% supply of any route. Personally, I don't think anywhere below roughly 150% would cause too much hassle. That is, *IF* your primary goal is to take out a competitor (and therefore not focused on making a profit but minimizing losses) and also *IF* you have planes that make this model financially viable for the route that you are flying.
Luckily for me, it's a short route and the ATRs are pretty good at serving that, even if they aren't filled to capacity.
3. Again, you make an assumption here that I didn't state at all. I said that blocking seats is a good strategy, if the reason for doing that is to increase the frequency of your flights without hitting the oversupply maximum*. And I never said you should block 50% of your seats. In the example I gave, I've blocked 55, which is a little over 20%, which really isn't that much at all.
So to conclude all that: All the things I said in my previous post was highlighting how useful both frequency and seat blocking can be in the strategy of muscling a competitor out. I never said it should be adopted as a standard business model. I never said you should run all your routes like that. In fact, I didn't even presume to say that this is the strategy that the OP witnessed. I merely highlighted how the technique can be useful under certain circumstances.
If you did follow this strategy as a standard model, then it would happen exactly like you said, which is that the whole airline would collapse under it's own weight.
Edit: I just wanted to add, that I'm not claiming I'm a master strategist and that I know every nuance of this game. I am merely saying that you shouldn't assume what people do and do not know, without even knowing the person.
Edit 2*: When I use oversupply maximum in this sense, I meant the 150% figure I quoted, rather than the 200%, in which case you would have quite a bit of trouble :P.
I often make assumptions as I have helped lots of players over the years, so usually just a couple of lines is all it takes for me to start making assumptions. You've put in a lot of time reading the literature available, which is quite impressive.
For item 1, there are actually two variables to consider. The first is the minimum flight separation which is based upon demand, route type and length (this is strictly a penalty variable) and the second is the optimum frequency calculation. For the optimum frequency calculation, from my experience, it is not a material impact to the overall sales and really doesn't matter other than the maximum for any given route.
For item 3, the assumption I used was an easier way to illustrate the point I was making. If your goal is 150% of demand as you state, then you really have no reason to restrict seats sold. When all things are equal other than seat restrictions enabled, the only place that would change seats sold is if they were limited to below what you would have sold otherwise on that route. Meaning, the same flights restricted to 150% of demand will sell the same number of seats as those flights at 190% of demand. The real history behind the seat restriction function was a knee-jerk reaction to deal with the fallout of the anti-monopoly gestapo that was implemented when either demand fell or in cases where a big planes was required for range purposes on a route.
Wasn't the frequency benefit disabled last year? ;)