Airline Mogul Forum

Flying More Than 1 Plane On A Route

warreng24

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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
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juancho

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Reply #1 on: August 18, 2007, 09:39:16 pm
Quote from: "warreng24"

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.
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Pod1967

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Reply #2 on: August 18, 2007, 10:33:54 pm
Basically you are competing with yourself.
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dktc

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Reply #3 on: August 19, 2007, 02:26:37 am
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.
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Steeler83

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Reply #4 on: August 19, 2007, 04:20:53 am
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.
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ken

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Reply #5 on: August 19, 2007, 09:31:16 am
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...


jetWes757

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Reply #6 on: August 23, 2007, 10:12:54 pm
Quote from: "dktc"
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...
ou may think you know, but you have NO idea.....


 

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