Author Topic: TripleA alliance thread  (Read 1605 times)

alex

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Re: TripleA alliance thread
« Reply #30 on: October 09, 2018, 02:30:13 pm »
Okay I need some advice on what to do. Now I make 18-20 mil a month( Before it was 60-70 ;D) And I'm worried its not gonna be enough for the replacement of airplanes overtime. I have the renewal set at 60%. I'm afraid my reserve is gonna melt with the next renewals and might even lead to bankruptcy. I have 4 billions now.  Also I don't know what to do with the service investment. It's at 74 now and I'm paying 120 mil for it.
My hands are tied in New York as my slots are negative 55 because of the low service quality. I was thinking of maybe upgrading some domestic JFK routes to 777 from 787 to reduce the frequency but I don't now if I should spend so much money on planes right now..
So yeah, I'm open for suggestions. ;D

Key question: what is your depreciation line item on the income statement?

Also, by 18-20m a month, do you mean profit or positive cash flow?

vani56

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Re: TripleA alliance thread
« Reply #31 on: October 09, 2018, 02:45:42 pm »
52 mil if I'm looking at the right thing.
It's the profit. It hit 11 mil a few turns ago and for this week is at 16. Cash flow is at 65 mil.
The thing that worries me is that sometimes I would buy 10 a380s at once. So when they drop below 60 it's gonna cost 2B+.

alex

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Re: TripleA alliance thread
« Reply #32 on: October 09, 2018, 03:31:17 pm »
52 mil if I'm looking at the right thing.
It's the profit. It hit 11 mil a few turns ago and for this week is at 16. Cash flow is at 65 mil.
The thing that worries me is that sometimes I would buy 10 a380s at once. So when they drop below 60 it's gonna cost 2B+.

OK, then contra Starlight, your airline is actually unprofitable right now and you need to find a way to cut expenses or raise revenues, although you are not in immediate danger.

At an auto-renew of 60%, your true weekly depreciation (amortizing the 20% penalty you take when you renew over the lifetime of your planes) is 130% of the "Airplane Depreciation" line item on the income statement. Which means that your weekly profit is about 15 million short of what's quoted.

I strongly recommend you cut service funding - that will almost certainly give you more $$$ back for sacrificed route quality than cutting the auto-renew % will.

vani56

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Re: TripleA alliance thread
« Reply #33 on: October 09, 2018, 03:49:12 pm »
Thank you much! So I'll probably cut the funding if nothing else works in a day or 2. Btw yesterday i had the auto renewal an 70% so that should give me some time.
But there is a chance my profits are gonna drop even more cause the service quality will plunge again

alex

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Re: TripleA alliance thread
« Reply #34 on: October 09, 2018, 04:14:59 pm »
You will have to decrease a lot of your prices. Each point of route quality is worth about 0.5% of the ticket price.

Stoich

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Re: TripleA alliance thread
« Reply #35 on: October 09, 2018, 04:21:38 pm »
In the absence of precise formulas based on the effects I've seen I would say the optimum service rating now is 50% as the bell curve has been flattened. So lowering prices after that to get back to 100% loads should bring you back to or very close to previous profit levels though will lower the maximum loads routes can carry. Therefore you might see some losses on routes that were either maximized in terms of loads or in terms of prices.

Generally overall passengers will diminish, other then that nothing has changed, except that pretty much main "competitive" factor now is the random yo yo spikes. The dominant position of our alliance will mean that the losses will eventually be concentrated in other airlines.

alex

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Re: TripleA alliance thread
« Reply #36 on: October 09, 2018, 04:29:42 pm »
I need to look at the numbers but I'm skeptical that 50% is the optimum, based on the shape of the demand function, but I might be wrong.

AlpineUngulate

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Re: TripleA alliance thread
« Reply #37 on: October 09, 2018, 04:42:46 pm »
I scaled Starlight back to 54 service quality, raised its renewal % to 60, and ditched some planes and it's still chugging along at about the same profitability as before.

It was never as profitable as some of your airlines because it's holding down a lot of territory with saturated bases, but it's doing fine. Seems like there are huge diminishing returns on going much higher than 54 service quality.

trans nations

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Re: TripleA alliance thread
« Reply #38 on: October 09, 2018, 08:16:40 pm »
I would call `making profits` as Phase I of this game. I was trying so hard to keep a 33% (1/3) margin (a.k.a, flights profit)
but as I increased the service funding to reach a service quality of 80, 1/3 margin is too much.

So I came to Phase II -- increase the # of passengers... Alex's insights bring a lot of sense, I will try to see if I can reduce the
SF a little bit.  Also, I set the auto-renewal to 30%, maybe that's a place I can improve.
Used to be a decent airlines

bluesky

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Re: TripleA alliance thread
« Reply #39 on: October 09, 2018, 08:31:28 pm »
Sorry to intrude, but could you please explain to me what do you consider profit margin? Do you consider the total income or just the flight revenue - expense?

Stoich

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Re: TripleA alliance thread
« Reply #40 on: October 09, 2018, 08:49:03 pm »
Sorry to intrude, but could you please explain to me what do you consider profit margin? Do you consider the total income or just the flight revenue - expense?

Profit margin is what % of your total revenue is profit. For example if your revenue is 100 and your expenses 90, your profit will be 10 and your profit margin will be 10%.
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Stoich

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Re: TripleA alliance thread
« Reply #41 on: October 09, 2018, 08:51:36 pm »
I would call `making profits` as Phase I of this game. I was trying so hard to keep a 33% (1/3) margin (a.k.a, flights profit)
but as I increased the service funding to reach a service quality of 80, 1/3 margin is too much.

So I came to Phase II -- increase the # of passengers... Alex's insights bring a lot of sense, I will try to see if I can reduce the
SF a little bit.  Also, I set the auto-renewal to 30%, maybe that's a place I can improve.

30% is too low, you start to get way too many delays and cancellations, I think the range to keep really is 50-60% now, 70% maybe is a luxury now, but below 50% you start loosing more then you save from cancellations and delays.

alex

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Re: TripleA alliance thread
« Reply #42 on: October 09, 2018, 11:03:41 pm »
40% is the absolute minimum for autorenew (more practically, 41% to smooth things out a bit), because after 40% condition delay / cancellation chance jumps significantly.

trans nations

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Re: TripleA alliance thread
« Reply #43 on: October 10, 2018, 12:40:28 am »
My bad. So I meant the flight profit by saying margin. Which is the money you make before service fund and any transactional lose/profit.
Used to be a decent airlines

trans nations

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Re: TripleA alliance thread
« Reply #44 on: October 10, 2018, 12:42:09 am »
Interesting. I realized that even with brand new plane, I still got delays, shall we avoid using the maximum frequency?
Used to be a decent airlines