New comer advantage on a route

wwnliu123 · **on:** October 14, 2007, 05:31:03 pm

This issue was raised in the previous round. Whenever a new competitor enter a route, even though the new competitor set the route to the exact same price and frequency, the existing airline will always suffer a drop in the load factor, and the new comer can walk away with 100% load factor. And that result in endless price cut. Has the load factor algorithm been altered for addressing that? Cause I already see this happening all over again. I got to say the situation is better than last round. But I am just wondering whether it is because it is still the beginning of the round or the changes in the algorithm is working?

d3funct · **Reply #1 on:** October 14, 2007, 05:42:42 pm

How does that differ to the real world?

If plane B offers $500 for a route and plane A offers $200 - are you suggesting that plane B should still retain its 100% loadfactor?
Its called competition.

Or have I misunderstood you..?

pseudoswede · **Reply #2 on:** October 14, 2007, 06:22:20 pm

Yes.

In the game, if Airline A has a $500 route, then Airline B jumps on that route and charges $500. Airline B gets the 100% load factor while Airline A got a much lower load factor. In theory, since they are both the same price (and if they're both using the same plane/frequency), they should have an equal number of passengers.

Example...

Both airlines use 50-passenger plane.
The route can handle 90 passengers.
If both airlines charge the same fare, each plane should have 45 passengers each (90% load factor).

Instead it's a LIFO (last-in-first-out), where the last person to charge that fare gets 50 passengers, and the "incumbent" only gets 40 (80% load factor).

Air Elbonia · **Reply #3 on:** October 14, 2007, 06:59:22 pm

there is a slight bias towards new entrants on a route. I'll look into a way to minimize this bias however, as i have an idea. a few bugpatches come first though, sorry.

(the only reason the bias is there is because i need the script to know which result was the new one when it organizes them for processing; if you want to rationalize it, i find "new entrant market buzz" can be moderately useful at times.)