Correlation between supply, seats, speed and size in AM?

[gisa]

Hi All,


I have a question that has been in the back of my mind for some time.  The best way to ask it is to explain the problem (if this has been asked, my apologies in advance).

Let's say we have 3 airplanes which I'll call BIG, FAST and PRIVATE respectively.

BIG travels somewhat slow and carries a lot of passengers (200).
FAST travels almost twice as fast as BIG, but is half the size of BIG (100).
PRIVATE travels a bit faster than BIG and carries about half the passengers of FAST (52).

Now let's say that there are two cities: A and B.

My question is this: what would the passengers in AM prefer?  I am not sure if it is speed, size (privacy) or a combination of the two.

A degree of logic tells me that that some would prefer BIG up until a certain point (i.e. two cities 400 NM apart should in theory still be competitive for a slower plane as most jets take time to get up to speed and people would rather save money than arrive 30 minutes earlier at this distance.

As distance increases, PRIVATE would beat out BIG and as the distance continued to increase as it was faster and had more privacy.  FAST would win out over increased distances because of its increase in speed (which would negate the needs of privacy over time).

However, in the game it seems that smaller planes tend to charge more for a route even though they are slower: regardless of the distance between two cities.

Further, the larger planes must charge less than the smaller and usually slower planes to fill 100% of their seats.  I can't tell if this is because of the relative lack of privacy or increased supply.

Knowing what AM prefers would help to optomize my fleets and the cities they serve.  I was thinking that in 1968, argosy commuters would be the best plane of choice for short destinations, fokkers/HS-Series 78E etc for larger distances up until about 1200 NM or so, Caravelles for 1200-1650 NM and larger cities of shorter distances and Douglas/Boeings/Tridents for even larger distanced cities.

Thoughts?



Gisa ^^

[CHR]

One of the most important parts of AM is maximising Load Factor. Load factor is increased by:

• Lowering the price (major effect)
• Having less of your own seats on the route (major effect)
• Having less total seats on the route (minor effect)*
• Having a faster plane (minor effect)

*Note: while one extra competitor may have minimal impact on load factors, many competitors will have a considerable effect. This is really in comparison to the effect of your own seats. I.e. if you put an extra plane on a route, it will drop your load factor more than if another airline put that same plane on.

This might suggest that the most profitable plane will be the small fast one, however, consider that a larger number of seats will mean more revenue in total. Speed will not only slightly increase load factor, but allows you to operate more routes per day. Clearly speed is something we would like to have more of. Really, the complicated decision is number of seats. More seats can have a positive and negative impact on profit.

The answer, however, is reasonably simple: there is no one ideal size. Bigger aircraft are better for routes between big cities, smaller aircraft are better between smaller cities. Take this slightly extreme example, if you put a 747 on a 200nm flight between to major airports, it will make a profit (perhaps not enough to justify the cost of the aircraft, but a profit nevertheless), put a 747 on a 200nm flight between two small towns, and you will quite likely not even make a profit on the flight - it will cost more for fuel etc. than you get in ticket revenue.

On a bit of a tangent, in terms of speed, larger aircraft (though they may have a higher speed) can take so long to load that they are slower than small aircraft. You may be better off buying a smaller aircraft and flying two times to a very close city.

[yourefired]

None of the above: price.