Ranking & Market Value

Hello everyone,

I have been thinking about the Ranking structure in AE games, and so IÂ´d like to post some ideas I have about this.

In the real world, airlines are not being evaluated or have a market capitalization that has just a direct connection to the sheer size of the company. Investors look more into the profit margins of companies, which roughly would be total income divided by total expenses minus 1, and x100, to result in a % figure(I really miss that figure in the financial page in AE 3.1).
Balance sheets, dividends, EPS, and other vital figures are also taken into account when evaluating real market values of airlines, but this would be difficult to apply to the current 3.1 version, so, to try to explain my idea, here is a comparative example to illustrate what I mean (all figures are aprox.).

AMR corp (American Airlines)
-Fleet (including American Eagle)roughly 900 aircraft
-Total assets 25 Billion $
-Total liabilities 29 Billion $
-Stockholder equity -4 billion $
-Total revenue 22 Billion $
-Net Profit -500 Million $
-Net Profit margin -2,2%
-Total shares outstanding 333 Million
-Share value 6,6 $

-Market Capitalization 2,200 million $

Jetblue
-Fleet roughly 160 aircraft
-Total assets 6 Billion $
-Total liabilities 5 Billion $
-Stockholder equity 1 Billion $
-Total revenue 4 Billion $
-Net Profit +100 Million
-Net Profit margin +2,5%
-Total shares outstanding 294 Million
-Share value 5,8 $

-Market Capitalization 1,700 million $

As can be seen here, American is by sheer size roughly 5-6 times as big as Jetblue, but in terms of market cap., American is only 1.3 more "worth" than Jetblue.
Well, I suppose its probably not realistic to code a complicated script to take into account and calculate all of this in AE (it would be a "magic" formula I suppose

, and many figures just are not calculated at this point), but a simple calculation of the profit margin as I exposed at the beginning, would be nice from my point of view to reflect an airlines "health" and "market valuation". It would be just a % figure.

If this figure could be implemented in the Ranking structure, and even set as the "default" Ranking when opening the Ranking page, this could also could have a secondary effect so that players would focus much more on the "current" profitability, than on size and accumulated profits over the time, preventing to some extent the creation of those "mega-airlines" (of which I have to admit I also manage some...), but I think most of us donÂ´t really "like", and in any case are not realistic by any means.
It also would make players think twice before flooding already saturated routes, as that margin would obviously shrink when doing so. Players would be tending to look up "empty" routes and serve those, instead of just "putting" more capacity on, lets say LHR-JFK, or LAX-NRT for example.

That figure could also could be a mix between the profit margin and the valuation, resulting in a "market valuation". A simple approach to my idea could be as follows.

Lets say airline X has a valuation of 15 billion (as it is being calculated now) and a profit margin of just 10%, this could result in a "market valuation" of 15*0,1 = 1,5 Billion market cap.

Airline Y with 4 billion in valuation (as calculated currently), and 40% profit margin, could result in 4*0,4 = 1,6 Billion market cap.

And airline Z, with 50 billion in Valuation, and profit margin of 1%, would result in 50*0,01= 0,5 billion

Anyway, in addition to the really nice and new reputation bar we have now in AE 3.1., I think some kind of method could be found to "reward" even more those many "high quality" airlines in AE, and "penalize" somehow those "vast" airlines, just like in real life.

Well, just a very rough idea from my side that could make AE even more realistic and which could be thought about. :ermm: