Lowered Incomes As A Result of Switching Airplanes

[standingcold]

Airline ID: 29813
World ID: 799
Current world year: 2005
Current bases: SKBO     El Dorado, SKRG     José María Córdova International, SEQU     Mariscal Sucre International,     SVMI     Simón Bolívar International
DOC: € 14,111,270
Airline link: http://airlinemogul.com/airlinemogul/view_airline.php?id=29813


When I decide that a plane is too old to use, I will often switch it with a plane of the exact same model that I had bought from the manufacturer. When that happens, the optimal price seems to change if the route being flown is being carried solely by my airline. For example:

Old flight (Dash-8-400)

El Dorado to Miguel Urdaneta Fernández
    Freq     Load     Ticket Price     Profit
        1      100%         €225                  €30,489


If I use the same ticket price when I replace it with the exact same plane (just brand new), then this is what happens:

Proposed Fare: €225
Total Profit/Loss   €29,900
Loadfactor   98.53%

My prices have been dropping constantly because of this. There has never been any competition on many of these routes, but ticket prices are forced to fall anywhere between €2-10 every time I change the plane to the same type of plane.


Can any veteran of this game enlighten me as to why this is?
Thanks!

[pseudoswede]

What is your profit when you have 100% load factor?

[standingcold]

€30,094 (it used to be €30,489, and before that, I would expect it would have been about €31,000)

Note that I rarely bother with cents, as I find that a waste of time for a gain of €50 or so.

This is just one among many instances. Actually, I also noticed that one or two of my routes had their optimal ticket price go up by a few Euros. That happens about 5% of the time, whereas the decreased price and profit is the norm. All of the routes I'm referring to are ones with no competition.

[wishfulanthony]

I'd say that's normal... I swap aircraft on many of my routes (usually from smaller to bigger) to make sure that they keep up with demand, and usually, on routes with no competition, you might notice that you can raise the prices (up to the point when 1 to 5 euros' difference lowers the passenger load by around 1 to 2%) so that you can keep up with equilibrium (cf. Law of Supply and Demand).

On your example on having the same plane, but having a lower profit, I believe that the older planes could have a higher price threshold to keep up for maintenance; for a new plane, it tends to perform faster (note: something that's brand new tend to work better), thus it requires you to lower your price to keep up with low maintenance costs in the beginning.

[BINDU]

is theere any competition??