« previous next »
Pages: [1]

Author Topic: profitability  (Read 195 times)

Orvalvisje

  • Jr. Member
  • **
  • Posts: 51
  • I don't need anything else but my Orval
  • Location: Brasil
    • View Profile
profitability
« on: October 16, 2018, 02:01:20 pm »
Will all lines eventually become profitable, maintaining them for years? I have a small line that's negative since i created the line. With time, will this turn or when do i know i should cancel the line and move on? The line i am talking about is bringing in about 4k negative, so i'm not talking about draining money, however, i feel reluctant letting go of the line.
Report to moderator   Logged
"Aerodynamically, the bumble bee shouldn't be able to fly, but the bumble bee doesn't know it so it goes on flying anyway."

Share on Facebook Share on Twitter

fajartri98

  • Newbie
  • *
  • Posts: 9
    • View Profile
Re: profitability
« Reply #1 on: October 16, 2018, 02:17:16 pm »
once i had the issue but realize that i set the price too high while it's still new. try to lower the price or simply reset the price. if your reputation and service quality increases, you can increase the price too later.
oh and also, if you're setting a route with inappropriate airplane it will possibly go negative cash. i mean, putting an A380 to a 500km route will definitely go bad....if you know what i mean
Report to moderator   Logged

Orvalvisje

  • Jr. Member
  • **
  • Posts: 51
  • I don't need anything else but my Orval
  • Location: Brasil
    • View Profile
Re: profitability
« Reply #2 on: October 16, 2018, 02:21:45 pm »
i think i inderstand ... am using a small plane (the 14pax one) on a small route, but i get on average only 2 pax per week. So maybe i should get the price extreme low then?
Report to moderator   Logged
"Aerodynamically, the bumble bee shouldn't be able to fly, but the bumble bee doesn't know it so it goes on flying anyway."

fajartri98

  • Newbie
  • *
  • Posts: 9
    • View Profile
Re: profitability
« Reply #3 on: October 16, 2018, 06:56:34 pm »
well...not extremely low, rather just reset the price to make sure it's lower than most of your competitor have. or perhaps the population coverage of the airport isn't big enough to create a decent demand?
Report to moderator   Logged

Stoich

  • Guest
Re: profitability
« Reply #4 on: October 16, 2018, 07:07:18 pm »
Business passengers in this game are the worst of the set of 3. The reason for that is that the general price index seems to be around 2.5x economy while the seats take up 3x space on the planes. For that reason until you've maxed economy capacity on a given route or are able to push business price up to 3x economy, you're probably leaving some money on the table by adding business capacity instead of economy.

First class is the best as it has a price index of 2.5x business and only 2x seat space to business, which is essentially 6.25 price to economy and 6x seat space, however first class on most routes has very low demand and with the randomness and yo-yo swings it can be a pain.
Report to moderator   Logged

patson

  • Administrator
  • Hero Member
  • *****
  • Posts: 915
    • View Profile
Re: profitability
« Reply #5 on: October 17, 2018, 12:32:40 am »
Quote from: Stoich on October 16, 2018, 07:07:18 pm
Business passengers in this game are the worst of the set of 3. The reason for that is that the general price index seems to be around 2.5x economy while the seats take up 3x space on the planes. For that reason until you've maxed economy capacity on a given route or are able to push business price up to 3x economy, you're probably leaving some money on the table by adding business capacity instead of economy.

First class is the best as it has a price index of 2.5x business and only 2x seat space to business, which is essentially 6.25 price to economy and 6x seat space, however first class on most routes has very low demand and with the randomness and yo-yo swings it can be a pain.

Take note that different class also consumes different amount of resource (crew and supply cost)  per seat, in general 100% first class should be more profitable than 100% business class and 100% eco should be the least profitable given the standard price - at least that's how my test case verifies the simulation :P
Report to moderator   Logged

patson

  • Administrator
  • Hero Member
  • *****
  • Posts: 915
    • View Profile
Re: profitability
« Reply #6 on: October 17, 2018, 12:38:42 am »
Quote from: Orvalvisje on October 16, 2018, 02:01:20 pm
Will all lines eventually become profitable, maintaining them for years? I have a small line that's negative since i created the line. With time, will this turn or when do i know i should cancel the line and move on? The line i am talking about is bringing in about 4k negative, so i'm not talking about draining money, however, i feel reluctant letting go of the line.

If your new line is already at 100% LF, then no, it will not turn profitable eventually. But there are several things to keep in mind here:
1. New airline/new route is affected by awareness, some travelers are not picking your airline simply because they do not know such a route exists. Give it some time and awareness will increase (rather quickly, compared to loyalty see next point)
2. Airline loyalty builds up with good service, some passengers are more willing to travel with your airline if they have higher loyalty towards your airline
3. At the beginning, the airport will only offer you very few slots. Which means even at 100% LF, your airplane is not fully utilized (it's sitting idle most of the time due to limiting slots, you can see that when u max out ur frequency, the red text tells you the limiting factor). Over time, airport will open up more slots to you, so check back regularly to increase the flight frequency
4. You might want to increase the price even if that means losing some passengers, you probably want to experiment pricing and see what is optimal
5. Flying small jets between large scale airport is usually not profitable. Large scale airport charges hefty landing/slot fee and it's relatively expensive for smaller jets


HTH :)
Report to moderator   Logged
Pages: [1]
« previous next »