7 replies to this topic

[James Knox]

To my current understanding...

If 2 (almost) identical airlines are flying a route, with the only difference being on time performance (Same everything else, no other factors), then an airline with 85% on time performance would get more pax than an airline with 10% on time performance. Most important things with getting more pax than your competition is price, frequency, and on time performance.

 

 

Lets say there is a route, and there is one airline flying it. They fly it (Y) for $400. Then another airline decides to compete. What I currently do is...

High frequency(80) + Low OTP(20) + Low price(350) = Lower $/mile (And 80% market share)

 

If I payed my employees more, my OTP would increase. If my OTP increases, then I could raise the price for the same market share. In turn, I would make more money per mile flown. Here is an example, my highest daily profit route.

 

 

So, can paying your employees decently affect your market share in routes to the point where it is worth the extra monthly money? If I payed my employees the market average, how would that affect my monthly profit margin?

 

 

Because as you can see, I'm not terribly nice to my employees. I'm not the worst, either. Used to pay them about twice what I currently due, but I was only getting 25% profit margin at the end of the month. Now I get 30%. Every dollar profit helps expand just that much quicker!

 

So, in conclusion, I don't really know. Can paying your employees decently affect your profit margin positively? Or is it better to pay them barely anything?

[Northern]

Well paying poor wages will increase your attrition rate and therefore you will need to hire more staff and train them up to standards, I mostly pay my staff well to reduce this and increase reputation.

[Hake.]

It's a question of realism really. Is your airline there to dominate markets etc. or is it more? Do you see passengers of your airline as figures or do you like to see them as individuals who would fly with this airline if it existed?

[Lord Letto]

I set it to industry standard and put reserves to 0% and leave it.

[Yoshi]

But that wouldn't be very good.  Industry standard is average.  No reserves means sick flight attendants serving you food potentially.  Think realistically.  I like to pay $10 more than the industry average and keep the default reserve levels.

[Hake.]

But that wouldn't be very good. Industry standard is average. No reserves means sick flight attendants serving you food potentially. Think realistically. I like to pay $10 more than the industry average and keep the default reserve levels.

+1. Generally on my biggest airlines I used to give 20% reserves and 5% above wages roughly. Now my airlines are heavily spammed and doing that wipes all my money.

[Northern]

But that wouldn't be very good.  Industry standard is average.  No reserves means sick flight attendants serving you food potentially.  Think realistically.  I like to pay $10 more than the industry average and keep the default reserve levels.

 

Sick cabin crew mean grounded flights If there are no standbys it will be delayed until they can find a fit complement

[Stevphfeniey]

Of course none of those parameters matter. Why would they matter?