10 replies to this topic

[greekdim]

Of course the title is a small provocation but I want also your opinion on how it is possible a situation like the one in R3 world. Just look at top ten and I believe most of you will see the miraculous situation of our leader Air smile. I want to clarify that now it is not as obvious as a couple of days ago since he didn't change anything for 3 days now and everybody of us expanded 3 or more times.That time we (the other top 10 guys) earned 6-8 mil x day and he earned 15,5 mil x day, we had similar profitable fleet  everybody else had 19-20 hours utilization for his fleet he had at most 12. And if you question about IFS look at his reputation. Can anyone explain it?

[Will101]

There isn't a cheat, they may just be good at earning quick money terminals and owned aircraft are counted in the valuation too or they may just have scam IFS on a profitable route.

[FlyingDutchman7]

No, he chose to put only 2 or so weakly flights on a rather high demand route and then raise the price about thrice. That way he earnt about twice as much money with about the same amount of aircraft as me (I'm in the top 10 too). 

I chose to not do that, as I don't have/want to spend so much time on this .

 

The trick of e.g. the number two seems to be that he doesn't have a hub and uses only a few gates at his many main airports. I, as another Chinese airline, also have very, very few routes where I'm competing him. Maybe he chooses routes where he doesn't have many competitors.

[greekdim]

What Flyingdutcman said could give an explanation but not at that point. I will give more elements: every day he earns with his fleet, 38 aircraft at 9 hours utilization (!) about 14 mil each day. Now 14.500 paxes means he earns more than one mil x 1000 paxes. I earn at this point 320 thousands x 1000, using my fleet 20h with no special competition yet.When we were at the start, with 16500 pax was earning 15,5 mil with 12h utilization while the rest of us earned   6-8 millions with the same paxes and 19-20 h utilization.I also change the prices to the most profitable ones but you can earn mostly 50%. I don't say 100% he is cheating but there must be a not normal way to give a huge per day profit. (at the start, even if I was paying 1$ and using no IFS I could save no more than 1-1,5m, without taking in consideration attrition). Anyway I have played 5-6 worlds but it is the first time I see a x day profit like that with 9h utilization. Oh and I don't talk about the valutation number I talk about x day profit.

[greekdim]

double post from edit, sorry

[Mobeer]

Air Smile is flying a pattern whereby an airline puts very few seats on a route that no-one else flies. An airline can then increase prices to huge levels and still fly at near capacity. It's an approach I have occasionally used with new airlines, though never to extreme of just having 2-3 flights per route per week.

Not a cheat, but maybe an exploit of how much passengers are willing to pay on routes with tiny supply relative to demand.

[greekdim]

Strange, I also always use his method, I had a similar fleet, I used it at max instead of 12h, I start with the most profitable routes I started with a base similar to BCN (FCO), still I was earning 7 mil instead 15,5mil x day (more than 100% and if we put also the utilization difference it is more than 180%). And especially on very profitable routes (which usually have a big demand, 350+) you must cover at least 1/4 to 1/3 of demand more or less to reach the max profitable rates otherwise you loose 5-10%, that is what I noticed at least. Anyway, I give up, some things like in real life have no logical explanation I just hope it is a question of more than perfect strategy.      

[greekdim]

sorry double post

[ChiJohnAok]

Air Smile is flying a pattern whereby an airline puts very few seats on a route that no-one else flies. An airline can then increase prices to huge levels and still fly at near capacity. It's an approach I have occasionally used with new airlines, though never to extreme of just having 2-3 flights per route per week.

Not a cheat, but maybe an exploit of how much passengers are willing to pay on routes with tiny supply relative to demand.

 

Hmmmm...supply/demand......Business 101.

 

[greekdim]

After doing some tests on high demand routes it looks like you can earn that much which I found it is something should be corrected. My opinion is there should be a max limit about fares relative to a normal fare (when 100% coverage of demand). That could stop those outrageous profits. Thanks for the answers

[FSC]

If you try larger demand routes then you can earn a lot on one flight fly only carry only 61/1000 of the demand. Charge 3x the standard amount. For first charge the max per seat $9999.

Profit soon drops as other airline competes.