Credit rating

[sellouts]

2 billion in the bank, cash
No outstanding loans
Started airline first day the world opened
Enough aircraft owned to secure the maximum sized loan they're willing to give
#1 ranking in previous quarter pre-tax income
#4 in profit margin previous quarter
+65 airline image (which is a broken, silly metric anyways)
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BBB Rating


Cash speaks loudest to a banker, if you have 2 billion in the bank you should be an A rated company, not to mention all of the other indicators included above.

Another silly metric that should just be eliminated from the game.  It serves no purpose and is broken. 

[alexgv1]

How many years has your airline been in business? That plays a part in getting an A rating or higher.

[LemonButt]

2 billion in the bank, cash
No outstanding loans
Started airline first day the world opened
Enough aircraft owned to secure the maximum sized loan they're willing to give
#1 ranking in previous quarter pre-tax income
#4 in profit margin previous quarter
+65 airline image (which is a broken, silly metric anyways)
------
BBB Rating


Cash speaks loudest to a banker, if you have 2 billion in the bank you should be an A rated company, not to mention all of the other indicators included above.

Another silly metric that should just be eliminated from the game.  It serves no purpose and is broken. 

AIG (the one that was bailed out by the US govt) has $68 billion in cash with an 8% profit margin and they only have a BBB rating and they've been in business over 50 years.  Your airline has only been in business for 5 years, which means there isn't much of a track record to go by.  Bankers don't care about cash--they care predominately about debt to income ratios.  Credit rating does serve a purpose--it determines nonsystematic risk and marginal interest rates.  The interest rates published are the risk-free rates.  How much further above the risk-free rate you can get a loan is determined by credit rating.

Beginner's World is setup to NOT be challenging so that virtually everyone can be successful.  If you are the #1 airline in the game your company image should be 100--not 65.  You stated in another post your bored...Beginner's World is like playing tennis without a net.  Fuel prices are ~$250 and interest rates remain low.  If you're bored, why not join DOTM2 where fuel is ~$350 (in the 1980's) and interest rates are 20%? 

[sellouts]

How many years has your airline been in business? That plays a part in getting an A rating or higher.

As I posted above it's been opened since the day the world started, so at least as long as other airlines that are A rated, if not longer.

AIG (the one that was bailed out by the US govt) has $68 billion in cash with an 8% profit margin and they only have a BBB rating and they've been in business over 50 years.  Your airline has only been in business for 5 years, which means there isn't much of a track record to go by.  Bankers don't care about cash--they care predominately about debt to income ratios.  Credit rating does serve a purpose--it determines nonsystematic risk and marginal interest rates.  The interest rates published are the risk-free rates.  How much further above the risk-free rate you can get a loan is determined by credit rating.

Beginner's World is setup to NOT be challenging so that virtually everyone can be successful.  If you are the #1 airline in the game your company image should be 100--not 65.  You stated in another post your bored...Beginner's World is like playing tennis without a net.  Fuel prices are ~$250 and interest rates remain low.  If you're bored, why not join DOTM2 where fuel is ~$350 (in the 1980's) and interest rates are 20%? 

You're comparing the airline to a company (AIG) that has a leverage ratio estimated to be (with creative bookkeeping) between 8:1 and 11:1.  They were extremely over-leveraged.  I can buy out every plane I have left leased and still have money in the bank. 

Let's also not ignore that AIG used questionable if not outright illegal bookkeeping to create it's profits.  An airline is a real business with real costs, etc.  All of this has been on my books and assuming my airline was traded publicly, would be available to them.

The complaint about the airline only being in business for 5 years is moot -- it has been in business as long as possible and as long if not longer than A rated airlines who do not turn the same quarterly, pre-tax profit that I do.

Let's take an example from BeginnerWorld currently.  Thai World Airlines has a value of 400 million and is locked into a total of 187 out of a possible 188 leases for aircraft.  My airline has a value of 1.98 billion dollars and has 92 leases out of a total of 188 aircraft.  THey also have a Company Image of 72, not anywhere close to 100.  They are A rated. 

Siberian Husky Airlines is a similar situation, their company image is higher but they own 0 aircraft and have another ~150 aircraft on order that are presumably leased as well.  They are also only worth 738m as well.

My point is, the metric is broken and is an arbitrary explanation for the game's decisions regarding financing that do not even closely match similar decisions made in the real world.

[LemonButt]

My airline has a value of 1.98 billion dollars and has 92 leases out of a total of 188 aircraft. 

How do you have 2 billion in cash with zero loans and own 96 aircraft, but only have a company value of 1.98 billion?  There is obviously a system in place and if I had to guess, it would be due to taxes (where are you based?).  If you are making 30% profit pretax and not retaining your earnings by buying aircraft and assuming a 30% tax rate, you're profit margin goes from 30% to 21%.  Every country has a different tax rate and if you're in Dubai, Doha, and several others--you pay 0% tax.

Also, you realize you can open additional bases at other airports, right?  Typically the biggest airline in a game will have 400+ aircraft with 200-300 or better at their HQ plus the maximum 70 aircraft each at the maximum 3 bases.

Company value is truly a broken metric as AWS doesn't use GAAP.  When you lease planes, prepaid leases are considered an asset but instead just disappears from the books.  Company value also only takes into account book value versus the potential to generate a profit and revenue growth--company values should really be 1-8x book value if they are profitable.

[sellouts]

How do you have 2 billion in cash with zero loans and own 96 aircraft, but only have a company value of 1.98 billion?  There is obviously a system in place and if I had to guess, it would be due to taxes (where are you based?).  If you are making 30% profit pretax and not retaining your earnings by buying aircraft and assuming a 30% tax rate, you're profit margin goes from 30% to 21%.  Every country has a different tax rate and if you're in Dubai, Doha, and several others--you pay 0% tax.

Also, you realize you can open additional bases at other airports, right?  Typically the biggest airline in a game will have 400+ aircraft with 200-300 or better at their HQ plus the maximum 70 aircraft each at the maximum 3 bases.

Company value is truly a broken metric as AWS doesn't use GAAP.  When you lease planes, prepaid leases are considered an asset but instead just disappears from the books.  Company value also only takes into account book value versus the potential to generate a profit and revenue growth--company values should really be 1-8x book value if they are profitable.

I mistyped, my company is worth just over 6billion and I have 1.98b in cash.

I have no idea what my realization about opening additional bases (which I have) or tax rate has to do with credit rating.  No matter what business decision I make, I can't run out of money.  I'm pretty sure I could cancel all of my flights, keep everyone on staff, and leave the engines running full throttle through the end of the game and not run out of money.  If a bank is looking at solvency as a criteria for credit rating (and it should) I literally don't know how I could be more solvent in the scope of BW or if this game was real.  

Also, looking at risk, the above example looks at the worst case scenario...let's say that the US put a 2 year ground stop on air travel.  This is completely unrealistic but given my books I am able to keep everyone on staff, pay myself the maximum salary, and pay all of the bills I have for running the airline for those 2 years without a dime of income.  Talk about low risk.   

I guess my point is:  I'm fine with AWS not using a standard accounting practice, that's probably above and beyond the scope of the game.  My problem is that it's trying to create a metric that it calls "credit rating" and that metric is very poorly designed.  Honestly, while I appreciate your efforts, bringing up other aspects of the game that have nothing to do with credit rating only further my point that there's no argument against credit rating being stupidly broken.  

[Curse]

Credit Rating is complex and not always the biggest airline has the best rating.

I know much too less about your airline to say why you have just BBB but if you think it's a bug, feel free to post in the bug forum. In my AWS history there was never never a point to complain about the rating system and I used to run the most largest most valuable airline in the games I play.

I'm also nearly sure AWS uses a simplified credit rating model, mostly because sami (the owner and coder) hasn't employeed some experts to calculate the rating properly The rating between AAA and B just decides how much you pay interest, the difference in allowed loan is small.



And, no offense, but I saw airlines with much more cash reserves and they lost hundreds of millions a week when fuel prices rise. Nothing what happens in Beginner World, but just to terminate your imagination of boring world domination game for game

[alexgv1]

As I posted above it's been opened since the day the world started, so at least as long as other airlines that are A rated, if not longer.

I'm not in the game world so I don't know how long that is I'm afraid (hence why I asked "how long" and not "since when"; case of RTFQ). But looks like some more enlightened people have come to your aid anyway.

[sellouts]

I'm not in the game world so I don't know how long that is I'm afraid (hence why I asked "how long" and not "since when"; case of RTFQ). But looks like some more enlightened people have come to your aid anyway.

"As long as possible" applies to either one of those pedantic questions.  Neither one has any bearing on what I'm asking.

Credit Rating is complex and not always the biggest airline has the best rating.

I know much too less about your airline to say why you have just BBB but if you think it's a bug, feel free to post in the bug forum. In my AWS history there was never never a point to complain about the rating system and I used to run the most largest most valuable airline in the games I play.

I'm also nearly sure AWS uses a simplified credit rating model, mostly because sami (the owner and coder) hasn't employeed some experts to calculate the rating properly The rating between AAA and B just decides how much you pay interest, the difference in allowed loan is small.



And, no offense, but I saw airlines with much more cash reserves and they lost hundreds of millions a week when fuel prices rise. Nothing what happens in Beginner World, but just to terminate your imagination of boring world domination game for game

I would argue that the credit rating is actually not complex enough, given the evidence I have posted.  Or perhaps, the credit rating is complex enough, just poorly designed.  These are simple methods of valuation that should be considered when it comes to rating the credit worthiness of a company.  

I would not post this in the bug forum, as it is not a bug.  Credit rating obviously works as intended, my point is that the intentions are incorrect.

Interest rate % is just one result of credit rating.  At it's most basic definition, credit rating is the likelihood of a company to repay debt.  The evidence I've posted are enough to determine that my solvency far exceeds the amount I would ever need (or be able) to borrow to meet my long term expenses or expansion.

This aspect, combined with other thing such as artificial floors and ceilings established to financing/selling aircraft that an airline owns (can't sell too high or too low), just show how this game, at it's core, has to put artificial barriers to simulating a free market economy.  The model is broken and unsustainable unless unrealistic and honestly lazy rules are put into place.  To keep this on topic, Sami should remove the concept of credit rating and stop trying to make that aspect of the game something it is painfully not.

[Curse]

Why?

You are the first one who complains about and I can't get what exactly your point is.

Do you feel just angry because you have this extreme cool airline but others have A rating and you haven't?

Or what do you complain about?

That the system is unrealistic? Yeah. Like the demand model. Or 1000 other things. But it's a game and in this game credit rating influences only some aspects a bit and for that it's good enough.

[ACDennison]

I might note that credit ratings often take into account credit history... if you have not routinely had credit (i.e. loans in AWS) open in the past, the bank has no proven track record of timely payments etc, even though all the evidence is that you could pay.  No/little credit history = Low credit rating.

So, ironiclly, the very best companies sometime have lower rating than those who have often taken out loans but paid on time.

[alexgv1]

"As long as possible" applies to either one of those pedantic questions.  Neither one has any bearing on what I'm asking.

Pedantic to some, basic language skills to other.

Needless to say I don't quite think that you're too big for this game after doing OK in one Beginner's World scenario.

[Curse]

Beginners World is serious business, Alex. True story.

[alexgv1]

Beginners World is serious business, Alex. True story.

Hehehe... I wouldn't know... I've never played one 

I went straight into the "big boys" worlds.

[LostInBKK]

Maybe you want to go and play www.eveonline.com that has full working economic model.

When you start to play the real game world you will notice things are no where as easy as Demo Game.

Welcome to AWS.

[Curse]

I'm doing better in the real game worlds than in Beginners Game. Due to my HQ I was only #2 there!

True story!

[sellouts]

Pedantic to some, basic language skills to other.

Yes, and in my opening post I said "As long as the world has been open" and also that I had amassed 2 billion of cash in the bank with no outstanding loans.  I don't think you can do that in just a year or two regardless of the world you're in.  Infact, the earlier in the game that I could do this, the more likely a lender would want to invest in my business early as the model is proving to be very low risk with very high returns.  But way to use those stellar basic logic skills.  Doubly sad since you're so proficient in the "big boy" worlds.  That doesn't speak well for the difficulty of this game. 

I might note that credit ratings often take into account credit history... if you have not routinely had credit (i.e. loans in AWS) open in the past, the bank has no proven track record of timely payments etc, even though all the evidence is that you could pay.  No/little credit history = Low credit rating.

So, ironiclly, the very best companies sometime have lower rating than those who have often taken out loans but paid on time.

I think there's a difference between credit ratings vs consumer credit score, but this is the best argument I've seen thus far as to explain the situation.  I actually took out a few loans I didn't really need and paid them back just to establish a credit history with lenders to see if it made a difference.  It didn't, at least to my experience.  Maybe I didn't take out enough or use enough secured loans to make a difference.  Good thinking though, I thought the same thing.

My skill level is irrelevant to the problem with credit rating, so it's interesting to see so many red herrings used as arguments against my point. 

"Good enough" is a pretty terrible goal for any aspect of a game.  Do it well or don't do it at all -- the game wouldn't suffer from the credit rating being removed until it can be done correctly. 

[GEnx]

"Good enough" is a pretty terrible goal for any aspect of a game.  Do it well or don't do it at all -- the game wouldn't suffer from the credit rating being removed until it can be done correctly.  

My god, sellouts, take a chill pill. Surely there are some aspects of the game that need to be improved (hence the "feature request" topic) but there's absolutely no need for statements like this, especially taking account that you're new to this game (yes, this is relevant). With your logic, you could remove the entire game from the server since the real world is very hard to simulate.

Throughout this entire thread you continuously rant (quite arrogantly in my view) how much this metric of the game is broken. As you have already pointed out, credit rating is an incredibly hard metric to calculate properly, thus it is bound to have some flaws in any sort of game. Therefore I'd really want to urge you to stop ranting already and start making valid suggestions as to how the rating should be calculated differently. After all, criticism is easy and art is difficult. Honestly, though, throughout the game's history there has never been a single complaint about it so in my view, it is quite properly calculated (i.e. players have not experienced negative effects on their airlines due to the way credit rating is calculated).

Really, breathe some positive air in your lungs.

[alexgv1]

My god, sellouts, take a chill pill. Surely there are some aspects of the game that need to be improved (hence the "feature request" topic) but there's absolutely no need for statements like this, especially taking account that you're new to this game (yes, this is relevant). With your logic, you could remove the entire game from the server since the real world is very hard to simulate.

Throughout this entire thread you continuously rant (quite arrogantly in my view) how much this metric of the game is broken. As you have already pointed out, credit rating is an incredibly hard metric to calculate properly, thus it is bound to have some flaws in any sort of game. Therefore I'd really want to urge you to stop ranting already and start making valid suggestions as to how the rating should be calculated differently. After all, criticism is easy and art is difficult. Honestly, though, throughout the game's history there has never been a single complaint about it so in my view, it is quite properly calculated (i.e. players have not experienced negative effects on their airlines due to the way credit rating is calculated).

Really, breathe some positive air in your lungs.

I'm glad you said it like that mate, because I would not have been so nice 

[Sigma]

Let's calm it down guys; especially with the snide comments about "big boys' worlds" and the like.  We're all here to have fun.