Airline Mogul Forum
Airline Mogul => General Chat => Topic started by: warreng24 on August 18, 2007, 09:30:06 pm
-
I am a bit confused about load-factors and profitability when you fly more than one plane on a route.
I've looked at the other forum topics, and I think this is associated with the 0.5 Frequency issue, but I am not trying to do that.
Example:
I have 2 gates at MHT and 2 gates at LGA
Aircraft 1 flies 12 frequencies to MHT and LGA. Fare is 71 Euros. Load factor is about 99%
Aircraft 2 flies 8 frequencies to MHT and LGA. Fare is also 71 Euros. Load factor is 17%
Shouldn't load factors be identical given the fare is identical, and the MHT-LGA market is not over-saturated (meaning there is still demand for seats)?
Bottom line: I am trying to maximize the usage of my gates. However, it seems that flying more than one aircraft on a route is affecting the overall profitability of the route
-
Shouldn't load factors be identical given the fare is identical
No because with aircraft #2 you are dumping more seats on the exact same route. Even if they are priced exactly the same. To increase LF on both planes you would have to lower the price on both planes to say $40.
More seats on a route doesn't always equal more profits. You might be able to make the same amount of daily profit with 4 frequencies instead of 20! Plus that leaves you more gates for other routes.
-
Basically you are competing with yourself.
-
What Pod said is true.
Based on our current formula, there is always a price difference for flights on the same route, even flown with the same plane with the same frequency. That would "encourage" players to find a price that would satisfy both flights profit-wise. It works the same in real world as in customers do tend to choose the one airline which they deem better when all operators have the same price on a route. The only difference here in AM is that the formula doesn't weed out flights operated by the same operator. This is done with an aim to discourage players to operate too many flights on the same route.
-
Right, both Hooters and Pod are right. It's called canibalism. See also "overkill." If you have more than one aircraft performing the same route, there is a good chance that one will suffer while the other(s) do well. Multiple planes on the same route makes sense on longhaul flights, where you are limited to 0.5 or 1.0 frequencies, such as pretty much any US-Europe/Asia flight.
-
You are partly right. I play with a small airline in Beijing. I notice airlines of the biggest alliance play in this way. They seems very happy with five to ten 0.5 CRJ flights to a small city. I think they can make profit this way. But we small airlines with one 1.0 flight suffer from that...
-
What Pod said is true.
Based on our current formula, there is always a price difference for flights on the same route, even flown with the same plane with the same frequency. That would "encourage" players to find a price that would satisfy both flights profit-wise. It works the same in real world as in customers do tend to choose the one airline which they deem better when all operators have the same price on a route. The only difference here in AM is that the formula doesn't weed out flights operated by the same operator. This is done with an aim to discourage players to operate too many flights on the same route.
okay now i see what you were talking about...