Jump to content

Photo

AE4 Question: Subsidiaries and M&A

- - - - - AE 4.0

  • Please log in to reply
5 replies to this topic

#1
AFX787359

AFX787359

    New Member

  • Member
  • 6 posts

User's Awards

4   

So a question/thought/suggestion regarding AE4:

 

Obviously both subsidiaries and Mergers & Acquisitions are commonly requested features on here. I know that subsidiaries will be coming out with AE4, which itself will be released around the same time Berlin Brandenburg will be completed (no disrespect to the AE staff! I have the utmost respect and gratitude for you!), and M&A are an actively considered issue to be implemented at some point in the future.

 

And M&A being implemented at the moment would be almost impossible due to the issue of what would actually happen to the money that the player of the purchased airline was to gain.

 

So I was wondering if it would be possible to take advantage of the subsidiaries coming out with AE4 and allow M&A with subsidiary airlines. Of course, there are many ways to do it, but I think it would be a good solution to the question of what happens to the money that the player suddenly gained through dispensing of their airline.

 

If the parent airline gains the money from the sale of its subsidiary to another airline, that money would both stay in the same world in which it was first earned and could be actually utilized by the selling airline to do business rather than just have it either vanish into thin air, which seem to the main issues brought about when discussing M&A's on this site right now.

 

And with M&A's involving subsidiaries, it would give more flexibility to how the mechanics of the M&A would actually go about. The parent airline could merge with its own subsidiary keeping its own brand or that of the subsidiary's depending on various characteristics (such as rating, profitability, route reputation, etc.), the parent of the subsidiary could sell the subsidiary to another airline where the other airline fully merges (i.e. shuts down the subsidiary's brand), or the buying airline could buy the subsidiary from the former parent as its own subsidiary and let it operate "independently" of itself.

 

For example:

 

Air India (AI) creates a subsidiary Indian Airlines (IC), and AI's chief competitors are Jet Airways (9W) and Indigo (6E). Eventually, AI becomes loss-making and its reputation plunges, but IC remains highly profitable. In order to make some cash, AI decides to do one of the following:

 

  1. Merge itself into ICs and adopt the IC brand while closing the AI brand because IC has a better reputation than AI's and would be able to command better market itself and increase market share, etc.
  2. Merge IC into itself and maintain the AI branding while closing the IC brand because AI generates more revenue and is the larger airline, so there are more frequent fliers, more pilots to train on various aircraft families, etc. which would cost more (something else that could be added when considering the M&A features as a whole)
  3. Offer IC for sale and 9W buys IC as its own subsidiary with the cash of the transaction going to AI and IC coming under the wing of 9W but still being run as an independent airline in the 9W group
  4. Offer IC for sale and 6E buys IC and merges IC into 6E; as in, 6E pulls everything IC related into its own airline and shuts down IC

Obviously there would be positives and negatives for each and every one of these options, and the game could be designed in that manner, and I mentioned some ideas for how that might work in options 1 and 2. And there would have to be costs associated with each of these (integrating new family of aircraft for options 1, 2, and 4 for the purchasing airline, painting all aircraft in new livery, etc.).

 

And of course, the mechanics and details of how this all would work would need to be ironed out (I think either a stock market set up for all airlines, both subsidiaries and parents, would work best or an auction for subsidiaries like the suggestion is for selling aircraft), but I would like to hear what you guys think of this suggestion!

 

Thanks in advance!  :D

 

-avatarfanx2



#2
Denver.

Denver.

    Retired AE Comrade

  • Member
  • 2,042 posts

I hope we have AE4


u2r8weo.jpg

  

 

Founder of National | Founder of Golden | Judge at National Awards 2016 | Member at SkyRoutes Alliance | Member of Universal Alliance | Member of The SkyWorld Alliance | 

 

 


#3
Domestic Sky

Domestic Sky

    aka Rex or RexPatricius

  • Member
  • 25 posts

+++++++++1


"The lowest ticket prices, period." - Domestic Sky's CEO

"We are not afraid to grab our competitors and wring them by the neck" - Domestic Sky's CEO

"One of the most ruthless airlines in history, will literally do anything to save customers money" - New York Times

"A cold stone killer" - Huffington Post

"The most sadistic, unforgiving, cold-blooded airline in America, but at least its cheap." - Wall Street Journal


#4
Melodique

Melodique

    Mcdonnell-Douglas is life

  • Member
  • 263 posts

I really like this Idea +1



#5
namika

namika

    *restarting*

  • Member
  • 688 posts

+1


aDarRVC.png


#6
LJ Aviation

LJ Aviation

    The Official Dabber of AE

  • Member
  • 321 posts

User's Awards

2      

+1

but when is AE4 coming out? No one knows


PKInW0N.jpgPgdni23.jpg

 

 

 

 
 





Also tagged with one or more of these keywords: AE 4.0

0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users