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Why should a larger plane has a lower ticket price?

Cheung Airlines

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As title, why should a larger plane has a lower ticket price in AM ? The passengers won't care about the capacity of the plane.
For example, (CX) HKG - LHR, there are two types of planes flying this route. B-747-400 and A-340
B-747-400 return trip: $12443
A-340-300 return trip: $12443

As most of us know, the 747 is significantly larger than the A-340, but the price are the same (at least on this route). I know this helps larger airlines grow, but this makes the game more realistic.(I hope so :lol: )

EDIT: Could someone please move this to sugggestion? It seemed that I have posted it in the wrong forum.

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CHR

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Reply #1 on: June 09, 2008, 05:52:48 am
You will notice, if there are two identical planes on identical routes, even if one is charging a slightly higher price, it will still get some customers. Also, your LF does not go from 100% to 0% straight away.
I think it is because the game simulates how some passengers will pay for the convenience offered by a flight at the correct time. In other words, if you look at the whole group of potential passengers, some will care very little for the time of their flight, these are the people who will most easily be swayed by a reduced price, then there is a gradual shift all the way to a passenger who is willing to pay a ridiculously higher price for the flight which is at the correct time. Although times are not assigned by you when you set up a route, the game still factors this in. It makes sense, would you get up at 1am to catch a flight to save $5 or would you just pay $5 extra and get a flight exactly when you want it.
This comes to my explanation, a plane holding 20 people can capitalise on this fact. For any one time period, there may be 50 people willing to pay very large amounts of money for a flight, so a 20 person plane can tap into this market. However, a 747, which is very large, cannot charge ridiculously high fares. Admittedly, you will get some passengers (in my example, you may get the 50 people willing to pay a ridiculous amount) but no more. However, if you lower the fares, other people will fly with you.

Summary
The game simulates the fact that some people will pay lots of money for a convenient flight. However, there are not many people like this, and if you have a large aircraft, the only way to fill it is to lower the prices to a level which lots of people will be willing to pay.

Related to this, is the fact that when lots of large aircraft get on a route (thinking on London...), this bonus for small aircraft diminishes in size, because people will be able to get a convenient price on a big aircraft.


Dan380

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Reply #2 on: June 09, 2008, 08:47:36 am
It doesn't have anything to do with passenger comfort.

In AM, the way to make the largest profit is to have 100% loadfactors. In a 20 seat aircraft, it is easy to find 20 people willing to ay $500 for a flight. However if you plug a 200 seat plane on the route, then finding 200 people who want to fly with you means you have to lower the ticket price.

I hope that makes sense. It's a compilcated concept to get your head round.
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CHR

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Reply #3 on: June 09, 2008, 09:09:45 am
I didn't say it was comfort, I said convenience, i.e. being able to get a flight at exactly the time you want. That is what I said in my summary, there are not enough people willing to a large amount of money for a ticket.


dktc

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Reply #4 on: June 09, 2008, 11:32:15 am
Basically speaking,

10 pax pay >1000
100 pay 500~1000
300 pay 250~500
500 pay 100~250
300 pay 0~100

So, if you use a plane with
10 seats, you could charge >1000
110 seats, you could charge 500
400 seats, 250
800 seats ~150
if there is no competitor.

(The above figures are just convenient examples and should not be quoted as they are.)
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Cheung Airlines

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Reply #5 on: June 09, 2008, 03:15:50 pm
Quote from: "Dan380"
It doesn't have anything to do with passenger comfort.

In AM, the way to make the largest profit is to have 100% loadfactors. In a 20 seat aircraft, it is easy to find 20 people willing to ay $500 for a flight. However if you plug a 200 seat plane on the route, then finding 200 people who want to fly with you means you have to lower the ticket price.

I hope that makes sense. It's a compilcated concept to get your head round.

I don't think its hard to find over 200 people to fly from LAX - SFO
(As southwest alone flies this route 23 times a day)

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SeaBlue Pacific Air

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Reply #6 on: June 09, 2008, 03:49:29 pm
All 200 people might be willing to pay 150 USD for an LAX-SFO flight.  In this case, you'd be able to fill up a 200-seater plane with a 150 USD price tag.  You'd also be able to fill a 20-seater plane in no time with a 150 USD price tag.  

Jack up the price to 450 USD.  Probably too expensive for most LAX-SFO passengers but something like 20 people might fly at that price because of certain factors (good schedule, emergency, business, etc).  With 20 people flying LAX-SFO at 450 USD, you'd get a 10% full 200 seater plane and a 100% full 20 seater plane.

Going back to your original question.  A larger plane does not require a lower ticket price.  It's just that with smaller planes, you can increase the fare until you reach the maximum tolerance of the market.


pseudoswede

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Reply #7 on: June 09, 2008, 03:50:06 pm
Quote from: "Cheung Airlines"

I don't think its hard to find over 200 people to fly from LAX - SFO
(As southwest alone flies this route 23 times a day)


So do a bunch of other airlines. And they all charge really low fares.
             
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Tiger In Training

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Reply #8 on: June 09, 2008, 07:40:12 pm
Your example from the real world is due to competition.

In AM its all about demand. As if you have 250 seats on a route, you would take up more demand than if you had 30. The same amount of people want those 30 seats, so they will pay much more...

Right?


nwadeltaboy

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Reply #9 on: June 09, 2008, 09:38:46 pm
Quote from: "Tiger In Training"
Your example from the real world is due to competition.

In AM its all about demand. As if you have 250 seats on a route, you would take up more demand than if you had 30. The same amount of people want those 30 seats, so they will pay much more...

Right?

I was just going to say that.  Right! :D


 

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