hi, i have been away for a long time for a reason or another and i wonder if you can help me.
what impact does the money you spend on marketing on your load factors?
the reason why i am asking is because i see a company with <10 company brand and image flying past as if it doesnt affect it.
i see another with just under 60 and yet company one, is somehow with way better load factors and growing way faster.
just trying to understand where i am going wrong
thanks
CI has some impact, but not masses. Especially for Y it's not so important, for C business somewha so and for sure for F first class!
CI only really matters when you're competing on a route with other airlines. If they have a higher CI they'll get more market share. If there's no competition then a CI 30 would be more than sufficient, and a lot cheaper. A common mistake is to aim for 100. Unless you're going to fly a massive (500+ aircraft) airline out of LAX/ORD/LHR/JFK/NRT against other top players there's no need to have 100.
This is a made up example, but I bet fairly accurate. Assumptions are everything else is equal - price,quality of plane, departure times, RI etc.
route 1 - EGGW-LTBA
airline A - CI 100 - market share 35%
airline B - CI 90 - market share 35%
airline C - CI 10 - market share 30%
so CI doesn't matter much.
Simon
Not long ago, a company was fined of 20 points of CI - hence going down from 100 to 80 of CI. The number of Y pax went down from 1 200 000 to 1 160 000 pax per week. This gives you a clue.
This was my airline in ORD. I went from a CI of 100 to a CI of -35 (yes, not 35, but -35). And guess what, I barely noticed an impact. I lost about 10% in weekly pax, but I recovered fairly quickly (about 1 game year or so). Don't worry about CI.
PS: In the image it only shows it went to -20, that's because the graph updates only once a week. I had -35 during the week.
ok thanks, i thought it would have more of an impact!
Over the past several years I have struggled with trying to achieve the highest percentages with the newest aircraft possible in every category- always leading to bankruptcy. i have learned that the bottom line is that the only bottom line that counts is the bottom line = how much money does an airline make or lose.
I have at times even wondered why some of these indices even exist in AWS. Are they helpful or misleading? So now, I use them as indicators to help my airline make more money. I think that is what they are supposed to do.