Hi all, 

At the start of a new game I always wonder; 'How can I make the best game start as possible?'.

Of course by keeping lean, meaning that I choose an aircraft type with a (relative) low fuel consumption, and by sticking to one aircraft type until I make enough money to finance other types.  But we face an other problem; route selection.

• We all have to choose our main operating market or home base; in this case Amsterdam (AMS).
• The next step is to select and start to fly new routes; sub-markets.

The process of selecting new routes is crucial because your resources (cash and aircraft's) are limited in the beginning. So we would like to fly the best profitable routes as possible. Later on in the game you may accept less profitable routes, because of competition.

So how do we select those (profitable) routes?

First of all, without paying cash we don't have access to those sub-markets (routes). For each outstation airport we have to pay a fee in order to get access to some slots/gates. Now we can conclude that we have to pay an X amount cash in order to acquire an X amount of passengers.

Example; I found two interesting routes; AMS-BRS (325mi) and AMS-LHR (229mi)           (assuming we only offer economy class)

AMS-BRS

• Monthly passengers demand (daily * 30 days) :    10.110
• Monthly slot/gate cost                                      : $ 59.839

To acquire 1 passenger per month we have to pay (59k / 10k)         =   $5,9 per pax, per month. *

AMS-LHR

• Monthly passengers demand (daily * 30 days) :      57.570
• Monthly slot/gate cost                                      : $ 698.524

To acquire 1 passenger per month we have to pay (698,5k / 57,6k) = $12.1 per pax, per month.*

*Keep in mind that the actual rates will be higher because of competition on the routes. It would be better to calculated with 30% to 50% marketshare per route, in cases you don't have a monopoly position. The rates are effected by  'p' and 'q' effects. (price and quantity)

Conclusion: LHR is twice expensive as BRS per passenger, so I would open AMS-BRS in this case.

Later on in the game, when you fly most of the low cost / high yield routes you have to move to the more expensive routes in order to ensure growth.

So this is a method of choosing new routes (in the beginning of a game). I hope this method helps you to select your route-network carefully!

Please feel free to give feedback on this method, and other interesting calculations and my English grammar and vocabulary ;-)....

Cheers,

MarkCEO

KLM - Journeys of inspiration (World: R4)

Hi all,

due to the growth of eaysJet i'm looking for a partner in crime ...

Let me know!

Grtz,

MarkCEO

See PDF, in attachement.

I was used to buy the A320 because it was a lot cheaper than the 738 and because it had a lower fuel consumption.

However after my cost analyses I realized the 738 has almost the same fuel burn with 9 seats extra !.

Oke, in the start fase of your airline the higher purchase price is unwanted, however if cash isn't a problem the 738 brings in more money!...and the value after 10 year is higher with the boeing, so purchase price should not be an indicator of choosing between both types.

Grtz,

 A320 vs B737 PDF.pdf   381.08KB   67 downloads

MarkCEO