More important for a new game world: profit margin or passengers transported?

Hey,

I'm beginning in this game. I did seize the occasion opened to start on a new game world of Hoover, after extensively reading the wiki and the training videos.

I wondered what would be a good metric for gauging the success of an airline from the very beginning where not much information is available.

Several airlines are transporting significantly more passengers than what I'm doing (despite nearly 100% SLF).

Yet, I'm also seeing denser seating and much lower prices for other airlines, which lowest ORS rating (which might indeed not be so important for a new game world)

This results in a much lower company rating for my competitors (mine is AAA, others are between A and BBB).

Information is also biased because of the different start dates of each company.

What information would you use to gauge how your strategy compares to others with early and partial results?

Thanks.

The number of pax transported doens't mean too much, since players offering long haul flights will obviously have a lower capacity and therefore transport less pax in general. Most companies will sooner or later have a AAA rating it feels. Companies having a lower rating for some time might be having some problems though. I personally don't pay much attention to the rating however.

But you can take a look at your competitors pricing, his slf, and his capacity and get a feeling of how well he is doing compared to you and how much money he might be making.

What matters always the most is the almighty $, the more you have the faster you can expand.

Obviously money in the most important but pax can also be important for example you will need the connections in the future and you will also need slots. I am helping a player at the moment which went for the profitable direct routes with strong demand instead of building a strong hub and now most of the gateways in the country are taken by competitors who all have strong hubs while he dosent thereby limiting his expansion. My point is you also need to prepare a bit for the future because the market will eventually be saturated and then the players with connections and strong ORS win. Personally when I started my Indonesian airline i went with 200% prices and older planes for about 3 months making more profits than my competitors combined. Later when my loads started dropping I changed prices to my standard ratio giving me top ORS rating. Though even at 200% prices I schedules to waves and didnt just throw down a bunch of direct flights. 

What would typically be considered a good profit margin (%) for your weekly EBT(financial result?)

What would typically be considered a good profit margin (%) for your weekly EBT(financial result?)

Anything over 30% profit margin with a 5% r/e is good. Great is 50% profit margin with over 10% r/e.

It also depends on size. For a start up which can be micromanaged a 60% profit margin and 50 r/e is good.

As passenger numbers or even the available seat kms are, as you already noticed, rather meaningless, I’ll usually focus on the fleet lists to determine the size, and therefore success of my competitors. You mentioned that you started on Hoover, so all airlines are of similar age and so they are comparable in that way.

Yep. I agree.

On a new world, all airlines invests every single penny in extra planes. If an airline operates twenty 73G's, you can safely assume that airline is worth 46 million (= deposit of the leased planes. There is little chance the airline is sitting on a lot of extra cash.

After a few weeks, I would look at seat loads. If an airline sells 95% of its seats, it's doing very well. If an airline only sells 60% of its seats, it's not a dangerous competitor  ;-)

Jan

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After a few weeks, I would look at seat loads. If an airline sells 95% of its seats, it’s doing very well. If an airline only sells 60% of its seats, it’s not a dangerous competitor  :wink:

 

Jan

SLF stand alone tells you just that, but not more.

You can have a SLF of 95% while you’d need 96% to break even.

The other airline has a SLF of just 60% but only needs 45% to break even.

In such case, the one with 95% is an easy competitor while I’d be highly alerted with the other.

Breaking even with 45% is rather unlikely, unless the fleet is owned.

I do agree that the SLF alone doesn’t give a full picture but it certainly gives a good indication. Look at other factors (leases/owned fleet, seats used, prices charged, etc) and you can make a good guess at what level an airline is making money.

Breaking even with 45% is rather unlikely, unless the fleet is owned.

I do agree that the SLF alone doesn’t give a full picture but it certainly gives a good indication. Look at other factors (leases/owned fleet, seats used, prices charged, etc) and you can make a good guess at what level an airline is making money.

Of course, unlikely but not impossible. And no problem with owned aircraft as you say - just goes to show that looking at the SLF stand alone doesn’t say much.

All the factors you mentioned combined give a good picture, but that’s a lot of work to really get something to guess on.

Btw, my airline now runs at a SLF of 91% and I doubt I’m a danger to anyone. This is going to change a lot, once I lower it to around 70% I guess.:wink:

SLF stand alone tells you just that, but not more.

You can have a SLF of 95% while you’d need 96% to break even.

The other airline has a SLF of just 60% but only needs 45% to break even.

In such case, the one with 95% is an easy competitor while I’d be highly alerted with the other.

In theory yes. In theory everything is possible  :-)

But you need to find a player who is smart enough to get a seat load of 95% and at the same time stupid enough to invent a business model where he needs 96% to break even.

Or a player who is smart enough to break even at 45% but too stupid to sell more than 60% of his seats.

Nah... allow me to stick with my opinion. After a few weeks on a new server you open two statistic pages of the country you play in: one tab with passengers transported and one tab with passenger capacity. Within a few minutes you have a pretty good picture of who is doing great and who is only doing so so.

But sure, there's many things that help to create a better picture. and the more details, the better the picture.

Jan

In theory yes. In theory everything is possible  :-)

But you need to find a player who is smart enough to get a seat load of 95% and at the same time stupid enough to invent a business model where he needs 96% to break even.

Or a player who is smart enough to break even at 45% but too stupid to sell more than 60% of his seats.

Nah... allow me to stick with my opinion. After a few weeks on a new server you open two statistic pages of the country you play in: one tab with passengers transported and one tab with passenger capacity. Within a few minutes you have a pretty good picture of who is doing great and who is only doing so so.

But sure, there's many things that help to create a better picture. and the more details, the better the picture.

Jan

You should know, I love statistics and what one can make out of them...

As for the 95/96, just search the forum and you find plenty asking why they don't earn money despite of 100% bookings. :blink:

As for the 45/60 - just a rough example, but what about the following:

I schedule a daily return flight perfectly “in wave”, 99% SLF, 50-60% margin - and a “filler” return trip “out of wave” with a 20% SLF, just enough for a positive CM II and good enough to bug the competiton. Do so with 50 airframes and call it an airline.

You end up with a SLF of 60% in the statistics. Am I doing only so so or am I running a stable and highly competitive airline? :wink:

Of course, a higher SLF is a good indicator on early server stages - we both agree here. IMO, the SLF is getting less expressive the older a server gets.

You should know, I love statistics and what one can make out of them...

As for the 95/96, just search the forum and you find plenty asking why they don't earn money despite of 100% bookings. :blink:

As for the 45/60 - just a rough example, but what about the following:

I schedule a daily return flight perfectly “in wave”, 99% SLF, 50-60% margin - and a “filler” return trip “out of wave” with a 20% SLF, just enough for a positive CM II and good enough to bug the competiton. Do so with 50 airframes and call it an airline.

You end up with a SLF of 60% in the statistics. Am I doing only so so or am I running a stable and highly competitive airline? :wink:

Of course, a higher SLF is a good indicator on early server stages - we both agree here. IMO, the SLF is getting less expressive the older a server gets.

Hi,

then let's not argue for the sake of arguing.

I am convinced that you run a stable and competitive airline. But your seat load is actually 93%, not the 60% of your theoretical example  ;-)

And those who loose money with a seat load of 100% are smart if they look for advice... because they are doing something (or some things) seriously wrong.

Cheers,

Jan