Demand

Hey all! 

So after building an airline that was worth a few hundred million (not insanely big, but a lot bigger than $10MIL you start with) a year or so ago and abandoning AirlineSim, I wanted to come back and maybe start another challenge.

I see the changes, I've kind of kept up with the forums, but I seem to be missing something.

I've recently created an airline, based out of SVO (Moscow) and yet, I'm having some pretty big, but in my opinion, unexplainable trouble. 

I'm getting roughly a 5 to 15% load on the following flights:

Moscow to Barcelona

Moscow to London Heathrow

Moscow to Amsterdam

Moscow to Stockholm Arlanda

Moscow to Ljubljana

Moscow to Belgrade

Moscow to Zagreb

Moscow to Zurich

Moscow to Warsaw

Moscow to Vilnius

Here's the kicker: I'm at the top of ORS as well with an overall rating of 96.

Here's another kicker: I'm the only one offering those flights!

You can't tell me that being at the top of ORS and being the only one offering those flights, that there isn't enough of a natural demand between a route like London Heathrow and Moscow. 

However, some of my inter-Russia flights are doing very well. How does Moscow to Syktyvkar, or Saratov, or Voronezh, or a few other no-name airports have a greater demand than the flights listed above?

This leads to another question: Is there a demand penalty for international flights? There simply must be if I can get a higher demand from Moscow to some farm-track airport than Moscow to the cities mentioned above especially being on top of ORS and being the only one offering those flights.

I appreciate your insight guys. I really look forward to being a part of AS again.

(Note: I'm currently on Devau)

Simple answer, you got a way to small network for International and Medium haul flights to properly work. Neither do you have the outside partners. Russia is huge market with a huge domestic demand and you need to funnel that onwards to the international flights. I belive you can have atleast 50 aircraft before needing to go International in your case. As long as you have a brilliant hub system you could also attempt medium to medium and long to long haul where you could be a connection hub between Europe and ASia which you are ideally positioned for. 

Connections is by far one of the most important parts of AS and I doubt larger success if not focusing on it.

Yes, Russia is extremely large.

However, when some of these cities are only 1000-2000km away and the cities in Russia are also 1000-2000km away, just because they're international shouldn't mean there would or should be less demand, especially with routes where there currently is no one else servicing them (Moscow to Heathrow, as an example).

I'm going to have to reconfigure based on your recommendation, which is fine as I'm just dabbling and getting back in. However, I feel there may be something fundamentally flawed with the current demand system.

Nothing changed between “year or so ago” and today, same demand system you placed with your old airline is present now.

Yes, Russia is extremely large.

However, when some of these cities are only 1000-2000km away and the cities in Russia are also 1000-2000km away, just because they're international shouldn't mean there would or should be less demand, especially with routes where there currently is no one else servicing them (Moscow to Heathrow, as an example).

I'm going to have to reconfigure based on your recommendation, which is fine as I'm just dabbling and getting back in. However, I feel there may be something fundamentally flawed with the current demand system.

Welllllll...sort of. Sort of not! It's basically a granularity problem.

Distances in themselves aren't relevant. Don't think of it as being just a question of distance, or the fact of being international or not, because things aren't quite as generic as that. 

(n.b this is as far as I know not actually quite how it works, but is close enough to be illustrative) -

# You will have a pool of X number of people wanting to travel between country A and country B (or indeed between country A and country A - domestic traffic!) - note that X will vary +/- 10% or so depending on AGEX status;

# # X will be further divided by sub-region, if there are any. So you might get 0.75*X=Y travelling between your origin sub-region and your destination sub-region;

# # # Y will be further divided by airport; so to take the Central Fed District in Russia you might get:

0.4*Y=Z1 going to DME;

0.35*Y=Z2 going to SVO;

0.2*Y=Z3 going to VKO;

0.02*Y=Z4 going to EGO;

0.02*Y=Z5 going to VOZ;

0.01*Y =Z6 going to LPK;

etc 

So - the key is that X, in the beginning, is probably only about 1000 people or so per day, and if we run that through the chain...

1000 * 0.75 = 750 (to CFD) * 0.35 = 262 (to SVO)

So - 262 people to SVO from an entire country, which sounds reasonable - but then you (probably, if it's a larger country or region with a number of significant airports) have to repeat the same process on the other end! If we take the UK, for example, you might get something like:

0.3*Y=Z01 coming from LHR

0.15*Y=Z02 coming from LGW

0.10*Y=Z03 coming from STN

0.07*Y=Z04 coming from LTN

[repeat ad nauseam for all 50 or so, because the only internal subdivisions in the UK are for outlying islands]

Which is to say that your actual demand is something like:

1000*0.75 = 750 (to CFD) * 0.3 = 225 (from LHR) * 0.35 = 78 (to SVO)

78 passengers per day is not so much; then figure a not huge but reasonably significant proportion of them will take other flights, so perhaps you get 50% of the market with your one flight per day (as opposed to the dozens to thousands of other options people will have to travel between the two airports); that brings you down to about 40 per day, which is at least within the general area of what you were seeing.

Were AS to be a laser-accurate representation of real life, that'd be wrong, in one sense, because the vast majority of traffic between Russia and the UK goes between Heathrow or Gatwick and Sheremetyevo or Domodedovo, so between LHR-DME, LHR-SVO, LGW-DME and LGW-SVO you'd account for probably 8-900 of your initial 1000 (say 300, 250, 200, 150); at the same time, were AS to be a laser-accurate etc you actually wouldn't see that, because people don't live at the airport and you will find them travelling for much further than is accounted for in AS to get on their flight to Moscow or London. IE - what we have is not quite realistic when you really get down into the weeds, but does a reasonable job of representing broad trends.

What you can do about this is broaden your reach - maybe there are only 10 people from each of 10 regional Russian airports every day going to the UK, but they won't have many options, because certainly noone's going to fly direct from London to Norilsk or indeed from anywhere much outside of Russia to Norilsk - so you can probably get most of them, or at least a large proportion. 

Also - it certainly does make sense that you'd get far more people travelling internally within Russia than internationally, regardless of how 'no-name' an individual airport is - the place is huge, an international pariah in some ways, difficult to visit and in the main not all that attractive a proposition for anyone who doesn't need to go there, so yes of course most people will be travelling domestic. Or, to put it another way - there are about 1100 people a day, in reality, travelling between the UK (pop ~60m) and Russia (pop ~140m); and I see on FR24 that there are about 900 seats between Moscow (pop ~20m) and 'no-name' Voronezh (pop ~900k) in the next 24 hours...

That helps a bit more. I guess like my first profitable airline, back to the drawing boards. :) Thanks all!