AS for beginners - an attempted blog

Hi

I go by the nick of yukawa and I have been playing AS for some years now.

A while ago, I wrote an introduction to AS for beginners on the German board (as I am a German). I always meant to translate that to English, but never got around. Now, I want to give it another go by writing a kind of block. It's more of an endless explanation, though. As the "blog" continues, I might go into more "advanced" strategy, but that depends on how my "case study" is going. don't be surprised, if you find some phrases directed at someone. that would be towards my trainee.

three things to consider:

- I am not a native speaker so excuse any mistakes

- this is all based on MY experience. other players have other strategies and different reasoning. I understand, that there will be opposing opinions out there. that brings me to item three:

- should you have questions or comments, feel free to post them. to keep this "blog" readable, please check if there already is a "comments thread" or, if not, create one.

since I wrote the first couple of entries before the release of the new UI, some directions might be a little off.

thank you for reading

1. Getting Started

               things to consider when setting up an airline

     Starting Location - the MOST important of all

     What Aircraft to get

  • Maintenance Categories
  • Compare Aircraft Types
  • Standard Picks
  • Why you don't want to go big
  • ordering your first aircrafts
  • what now
  • two things I always forget

     Basic ORS

  • first image booster
  • right rating
  • rating of connections

  • pax distribution

     Seating Configuration

  • quality or quantity
  • seating by range
  • pax weight and range
  • first class

     Onboard Service

     Start-up Finances

  • cash flow and how much to spend

     Fleet Management and Pilots

  • fleet management
  • pilots

     Network Structure

     Scheduling Theory

  • transfer time
  • departure wave
  • random scheduling
  • things to keep in mind

     During Scheduling

  • Scheduling
  • First destinations
  • Maintenance ratio
  • Scheduling an individual aircraft

  • Activation of schedule

     Inventory - Route Management

  • standard price
  • setting prices
  • setting onboard service
  • wash, rinse, repeat

2.  A Closer Look

                I realize, those will be more controversal. Please leave a comment in the comments thread. Thank you.

     Interlining

  • Why to interline
  • ILs early in the game

  • A crude calculation attempt at ILs
  • My "rule of thumb"
  • Risks in signing many IL partners

     Initial Public Offering (IPO)

  • How much you gain
  • Why I don't IPO
  • A rough estimate at IPOs
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first of all, welcome to AS. As you have already noticed, it is a challenging game and thus requires patience, willingness to learn (both by reading and from mistakes) and at least a general idea of economics. I am not refering to understanding what hedge fonds do these days - I think nobody really does - but to realize that there is demand and supply and that they interact would be helpful ;-)

be advised, that there is more than one way of being successful in this game. Some things are generally accepted while others rely on my own experiences and other players might use very different approaches. Personally, I am aware that my basic strategy concepts could easily be improved, however, I have a certain time budget and some more benefical strategies would simply be too much for me to handle.

and three last but certainly not least things to keep in mind:

- AS is a game of months, if not years. Nothing of importance ever happens within hours.

- I will not tell you how to do things. I much rather will point out some factors to consider, help you evaluate decisions, etc. I am not going to play the game for you

- you will have to read and understand. If things are unclear, please, go ahead and ask and I'll try to explain more or differently. If you don't, I assume, you understand what I am getting at.

Starting Location

In my opinion, choosing a location for your headquarters is the MOST IMPORTANT decision you will make during the entire game!

the home country of your holding defines what traffic rights you have. (for traffic rights, check http://en.airlinesim.../Traffic_Rights).

first of all, that will tell you, from where to where you will actually be allowed to transport passengers (pax). but just as important: it tells you, where others will be allowed to transport pax to. why is that important? well, take the US, for example. Let's say you picked MCI. Well, even if MCI were vacated, every US based airline has the right to swoop in and build up a hub there. A big airline might just decide to make your hub his hub and drop some 200 planes on that airport. There is almost no way for you to compete and you will be out of slots almost instantaniously.

Same goes for the EU. Any EU-based airline can operate a hub within any EU city. Countries open for investment can even be accessed by ALL holdings worldwide.  I think, you see where I am going.

If you are new and unexperienced, you should really really consider if choosing to play in the US, EU, China or any of the other major markets is really the best way to learn that game. Personally, I very strongly recommend to find another country. This will not only keep up your motivation as you will actually see reasonable growth, but also gives you the opportunity to learn the game as you won't be stuck with your first three aircrafts forever.

So, I believe what you should be looking for is:

- a country with a medium to large national market with at least one airport with a pax rating of 6 or higher. (it is absolutely possible to build from smaller airports, but becomes increasingly difficult), that is not investment open nor - preferably - in the EU, the US, ... you can get a general impression of national market size by checking how many other airports (at what pax rating) are there. also, throughout the entire game, wikipedia will be a great source for transportation statistics. If the airport of your choice only serves 500k pax a year, it will be way harder to start than picking an airport with 10 millions anually, for obvious reasons.

- the airport for your headquarter needs to have a minimum transfer time displayed on the airport information page. If it does not, it will read transfer impossible. Obviously, you could only handle direct OD-pax (origin-destination-pax) here. AS, however, is very transfer based.

- it is preferable not to have a night time ban, as a night time ban clearly limits your scheduling opportunies.

- make sure, the airport has a lot of available slots left. not only does a lack of slots limit your scheduling opportunities, it also indicates the presence of a strong competition.

- once you have limited your list of potential home airports, you should consider their geographical situation and market opportunities. as you will outgrow your national market at some point, you need to understand your role in the bigger continental and world market, as you will now have to compete against everyone else. so, look at a map, find your airport and ask yourself: who would use this airport as a hub? if your hub was in Phoenix, would you expect any pax from Europe to use your hub to go to New York, Brazil, or South Africa? I guess not. Might they be going from Europe to the West Coast or Mexico? Way more likely.

so, here is what you should do:

find an airport that meets the criteria mentioned above. I usually have two or three countries in my mind I would like to start in. I, then, check the different servers to find one, where that particualar country/market is under-served. Due to the number of servers and countries, that shouldn't be too hard. Just - for the sake of learning - do not choose the US or the EU. That's something for another time.

I usually check the statistics page of every server and look up the pax/week for the countries I am interested in. some examples of countries that I suggest for starting (if no or little competition it present): Mexico (usually already well served), Venezuela, Turkey, Egypt, Iran (keep in mind there are some travel restrictions in place), Marocco, Saudi-Arabia, etc.

Those are countries with a medium to large national market, some with better placement for later longhaul operations than others. But there are many more.

In my opinion, it helps, if you can associate yourself with an airline in the chosen country. Helps with the fun and long-term motivation.

I recommend you pick one country and check all servers, when doing it for the first time. It will give you a better idea what you can consider to be under-served, as on some servers, you will find airlines in that country transporting 2 million pax/week and on other servers, only one airline carrying 150k pax/week. That should help with getting an idea of what might be possible and what you can expect.

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What aircraft to get

Maintenance Categories

first of all, you need to keep in mind, that aircrafts are sorted into maintenance categories. You can find the maintence category on the aircraft information page. The number is only an index and does not represent any costs associated with it. However, operating four or more maintenance categories increases the overall maint. costs by 15% per additional category. This might sound a lot, usually it isn't too bad if you go for a fourth category, however, you should keep it in mind, as the fifth might be well-considered and the sixth most certainly starts to hurt.

there are aircraft families like the A318/319/320/321, same for B73X, CRJs, etc. This allows you to operate aircrafts of various sizes without having to add an extra maintenance category. This might come in handy, but only if you can actually utilize the variety. There are one or two examples that I would never use because the smaller variants are simply way too in-efficient.

Compare aircraft types

based on my experience, there are certain a/c types I almost always role with. However, you can basically run every a/c type profitable, if it fits the route profile and you get it at the right price. For the beginning, I will name the broadly accepted "best aircraft types". you can always take the time and look for alternatives, though.

I recommend starting with one category. so, as you are probably aware, you should start with national routes. that means, your longest route won't be more than 1000km tops. Since you might want to use the same category (depending on your choice) for later routes to regional destinations, the maximum distance for the first aircraft category might be higher. now, use the aircraft type evaluation to compare different aircrafts. Only take the values displayed as a reference, but not at true value, as it does not reflect your actual utilization, your actual leasing rate, your seating config, .... however, it gives you an idea of how aircrafts perform relatively in regard to costs per seat.

I suggest, you also compare different a/c types within an a/c family to see how they are doing. It's not good to choose a family for a larger range or higher seating capacity, if the smaller versions aren't economically sound.

something else to consider when choosing an a/c type is its popularity with the pax. Also available on the a/c info page, there is a rating. Generally speaking, newer models, wider cabins and jet engines are more popular. for instance, Dash Q 400 has 2, CRJs have 4 and E-Jets 5., I think. Better check that.

You also might want to keep in mind the a/c performance. When operating out of a remote location or when you have a lot of smaller airports in your country, you will notice, that some of them have very short runways. On some of them, you might not be able to depart with jets. Even if that is not the case with the bigger airports in your new home country, your airline will grow and you will eventually want to connect the smaller and remoter destinations as well, as transfer pax will fill your aircrafts. Information on rwy length is available on the airport info page, required ground roll for landing and take-off is available on the aircraft information page. This value obviously depends on the take-off-weight ( TOW ). So the easiest way to see if a particular a/c can fly a particular route is by using the performance check tool linked to the a/c info page. Make sure to check the return flight as well, as the values differ for landing and taking off ( t/o ).

With the performance check, you can also check the flight times for a certain routes as well as the turn around times at the destination airports.

FYI: turn around ( t/a ) depends on aircraft size and airport size. So an E195 will always have the same t/a at a "major airport" and always the same - but different - t/a at a farm track. Right now, the number of seats of an aircraft does not influence that value, but it will be implemented at some point in the future.

Another important information regarding a/c performance: right now, the fuel consumption is unrealistic in AS, as it only takes the distance into account, no matter the TOW, meaning: an empty 777 would burn the same fuel (and thus money) as a full 777, and here, no matter the number of seats you are actually using. This also applies to fuel load, as the calculation is always based on MTOW (max TOW). This, too, will change with the new aircraft performance system, however, I do not expect that new system to be implemented into old gameworlds for quite awhile, if at all.

So, planes are usually operated most economically, if you try to make route length and maximum flight distance ( with regard to your seating config) meet.

standard picks

Keep in mind, those might be terrible choices for you. Either your route profiles do not match and alternative types might have a better per-seat-cost than those standards, or those types are not available on the UM. Also, aircraft types that do not look appealing in the aircraft type evaluation, they might be quite profiteable, if there are good offers on the UM. You can make a real deal here.

- Dash Q400: pretty fast for turboprobs, but I would not use them beyond 1000km, maximum 1500km, as they loose too much time relatively to jets. However, on shout routes, they are great, as the very short turn around time (20 minutes on many airports) more than makes up for the lower speed. Since I am facing little to no competition in Venezuela on gatow, that is my choice for national traffic.

- CRJ 700-1000: good choice for everything up to 2500/3000 km, depending on range. offers 78 t0 104 seats. Personally, I do not use the 100 and 200 versions as the per seat costs are too high for me. but if you wanted to, they go down to 50 seats (all capacity information are maximum capacity. Since you will be using better seats, you will never reach them).

- Embraer Regional Jets 170-195: I have only started using them last year, but I love them. They have great performance, offer a capacity of 80 through 124, the LR versions can fly up to 4000 km (that allows to reach most of the US from CCS).

other standard aircrafts are: B73X family, A319-321 family (they are pretty much tied and basically have the same in cost-per-seat performance depending on your route profiles). Be aware of different speeds and turn around times depending on size. Will be important if you want to chance to smaller or bigger capacity later on. actually, a lot later on).

787 for long distance. However, I tend to use the A330s and A340-600 for longhaul a lot, because you can often get them inexpensively from the UM.

why you don't want to go big

now, there is something else to keep in mind, which will explain, why you should not look for anything bigger than an E195 right now.

Apparently, AS isn't the reality. When it comes to demand distribution, it is benefical to operate smaller aircrafts. The reason being:

AS distributes demand on flights based on the "online reservation system (ORS)"-rating. It's basically a price-performance ratio. All flights that reach their destinations within the next 72 hours are being considered, distribution is generaly assumed (AS never directly comments on that) to be done proportionally. So, if there are only two flights available and both have the same rating, both flights will get the same number of pax assigned until one or both of them are full. So if there are 100 pax total, flight A has a capacity of 50 and B of 100, both get 50 pax. For A, that is great, because it is now full, for B not so much.

Of course, there a more available connections in AS, however, you catch my drift. It is easier to fill a smaller plane. And while bigger planes have better economics, they do you no good, if you can't fill them.

Also, let's assume, you alread have a long haul route to somewhere. You can now either operate a single A321 with 200 seats as a feeder or 3 Dash Q 400 with 70 seats. The ORS will now look at the available connections. In the case of one A321, that will be exactly one connection: the A321 and the longhaul flight. With 3 Dashs, you will have a total of three available connections and they are all going to be booked as if they were operated by different airlines. So, assuming the ORS ratings are the same, you will get three times as many pax on your long haul flight, as it will be booked three times rather than once; one time for each feeder flight.

two things counter-act that benefit: one is the already mentioned higher per-seat-costs of smaller aircrafts, the other is slot availability at your hub and at other airports. If you are the only operator in your country, you are basically your only competition for slots there. You might want to use bigger aircrafts to airports with strong slot restrictions.

cargo capacity

You really should not start as a cargo airline as an unexperienced player. not only is the demand situation very different to pax, but all pax carriers tend to offer CU capacities as a "byproduct", thus posing as competition.

As a pax carrier, you might want to keep the CU capacities of different aircraft types in mind.

Let's say you decide to start with turboprops, you don't carry any cargo units (CU). When, at a later point, you start longhaul flights, all your flights will offer CU but there won't be any connections available. Personally, I calculate flights without cargo anyhow, so any sold CU is additional profit. This will show differently on the flight income statement

When using E-jets and CRJs for regional routes, you won’t offer CU capacity. Out of the “standards”, only B73X and A319-21 families and bigger do unless you specifally use a cargo version of one of the smaller.

On gatow, my caro load factor (CLF) isn’t that great - around 60%. I offer 0% connection, only random ones to the Northwestern US and South America, where destinations are beyond the reach of an E195 AR.

That, however, is profit wasted.

what now

so, if you have decided on an airport and a server, you should think about what aircraft type to use.

when you have done that, check the UM for good offers. I personally do not operate aircraft older than ten years, as maintence costs then start to rise and they are way less popular with pax. I always aim for less than 5 years average fleet age. Regarding age, the average fleet age is considered for ORS ratings, not the one of a single aircraft.

if you do not or can not order a/cs from the UM, lease new planes. The delivery rate is being displayed on the a/c info page. It's not influenced by other airlines' orders.

do NOT purchase on credit. The interest is incredible high and will eat you alive. There are scenarios where this option is viable. Please refer to the msg board in this regard.

ordering your first aircrafts

The UM uses a bitting system. Simply start the processing by clicking the "lease" option, then a count-down will begin. It is one hour and will be re-started once somebody else bids on the a/c. That usually doesn't happen, thou, if enough of the type are available. Aircrafts become available in minutes after the auction has ended.

If you order a/cs as new, the delivery time depends on the manufacteuring rate as displayed on the a/c info page. So 1/21 means one per 21 hours. This is independend from other airlines' orders. There is also an "immediate delivery program" in place to help you getting started faster. It basically means: until you have a/cs with a total value of 10 mio, new a/cs are available to you right away. anything you get from the UM is also factored in here but still only received after the auction has ended.

And two last things I always forget

- you will need to pick a maintenance provider. there is room for optimization if you are more expericed, but at the beginning, I would go with Helvetic-

- go to "game settings" and de-select the comfort functions, particularly "automically assign seat config". you will not use the default seating config that would otherwise be generated for you, but you would still have to pay for it upon delivery, if this setting isn't deactivated. It is a waste of money.

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basic ORS

As mentioned, the pax distribution is based on your ORS rating relatively to other airlines' ORS ratings. The higher your rating, the more pax you will get. However, achieving a higher rating requires you to offer better service, which in turn costs money. So, there is an optimum for maximum profit. To find that, is a major task in AS. Again, it will depend on how much time you want to spend on AS. You can do a lot of micromanagement optimizing the different levels on every single route to maximize profits. Personally, I don't do that, as I enjoy real-life as well ;-)

now, what influences the ORS rating? easiest way to find out: once you have flights booked into the system, simply click on "details", then on the tap "flight ratings". It will show you the values associated with that flight.

- the first box gives you the values that are actually being transferred to the ORS. a little more to that later

- second box: well, kinda self-explanatory. all values are for that particular flight and the seating config and on-board service booked in for that particular flight as assigned by you. Terminal is always 2, as you are using the terminal automatically provided by AS. You can build terminals later on, but that is something you can do, if you have hundreds of millions to waste. Dedicated freigher doesn't apply to you and is only important for cargo haul. Image is how your airline is being perceived. Factors there are available in the third box.

- third box shows you the image factors. Those are not based on that particular flight but your overall image calculated out of all your flights' performances. This is something you want to keep up, as it will become harder to change the bigger your airline gets.

One factor here, that you can influence easily is staff mood.

first image booster

When you go to the "staff" page, you can assign salaries. The staff mood will decrease when below country average and increase when above. However, the way up is way longer than the way down. Personally, I pay +30-40% until my staff has 5 green bars, then I lower the salary to slightly above (+5-10$ to have a small buffer). This helps to keep up the image with very little actual monetary afford on your part. the image then improves the ORS rating.

right rating

as mentioned above, you can maximize the ORS rating. It can not exceed 100 (lowest possible is -100, but pax don't book if a connection rating is below 0, which is the rating for public transport and the cut-off point for you). a lot of players go for an ORS rating of 100. Personally, I think, this isn't necessary in most cases. particularly, if you have a lot of transfer pax. Play around with the numbers and see how your bookings behave. You will notice, you can fill a lot of planes even with ratings as low as 1, if the competition is low or you have a lot of transfer pax booking that particular flight. So why spend a lot of money on services not required.

rating of connections

once you have the first flights booked into the system, check your ORS rating for your connections. You will notice, that there will be a rating for each individual leg and a rating for the entire connection. While parts or all legs might be negative, the over-all rating can still be positive, as factors like image play into it. therefor, it can also be the other way around.

pax distribution

we already know that pax distribution is based on the ORS rating. However, when does it take place. Well, every airport has a "demand calculation time" displayed at the airport info page. Demand distribution happens once a day for every airport. At this time, all available connections and their ratings are being compared and pax (originating at this airport ) are being distributed. For advanced scheduling, you might want to keep the demand calculation time at your hub in mind, but it's of very limited importance to you right now.

Since your destinations will have their demand calculation times spread throughout the day, you will see bookings to your flights throughout the day. When it's an airport's time, all pax, including the connections, are being booked.

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Seating Configuration

quality or quantity

There is no one formular for what seats to choose. You have to find the seating that best fits into the aircraft/aircrafts you use. You don't want to waste space, obviously. It also needs to have an approriate rating for the distance you want to travel. The better the rating, the more money you can ask off the pax, in turn, costs like fuel burn are going to be distributed over less pax if you choose better seating, so the per-seat-costs rise as well. In turn, the better the seats, the fewer there are to be filled, thus making it more likely to actually have a high load and operate flights profitably. As with everything, it's a trade-off.

seating by range

Since I hate micromanagement, I usually offer a service level for short-haul, medium-haul, long-haul and, should I ever introduce it, ultra-longhaul. Limits (at least to me, usually being 1000-1500, 3000-4000, 8000km.

Usually, I use the same seats on short haul and medium haul so that I can interchange aircrafts easily between those routes. For my Venezuelaen airline, I actually use a different seating for my national network, as I use Dash Q400s there and they don't fit my classical config used in E-Jets and B73x/A32X.

So, feel free to try around here. Since you asked for pointers, here is what I am currently operating on Gatow:

nationally: due to the lack of competition and since it better fits the Dash Q400, I am using leisure on economy class ( Y class or just Y ) and recliner shorthaul in business class ( C class).

regionally and midhaul, I am operating E-Jets with leisure plus in Y and recliner shorthaul in C. That has been my basic config for a long time and it works for me, as this also works in most B73X and thus increases inter-changeability.

seating config for long-haul differs as it depends on the a/c type and route profile you pick.

pax weight and range

every pax weights 95 kg, every CU 100kg. you rarely need the MTOW of an a/c. so take that into account when designing floor plans for the longhaul fleet. (You can check the weights and distances on the aircraft information page and use the performance tool to evaluate the available TOW vs. distance)

should the TTOW exceed the MTOW for the given distance, the first item to stay behind is CUs, followed by Y, C and F. if you really want to push the range of an a/c, you make a few hundred miles out of the 50 to 250 CU available in the bellies of longhaulers.

first class

for short-haul and even medium haul, I would not offer a first class ( F class). There is a demand and if you know how, you can make quite some money out of it, however, pax downgrade a class, if their preferred class is not available at all (so including all other available connections). The market is very small and I think it is not worth the trouble. Others will disagree on that one.

Personally, I don't even offer F on long-haul flights. Y and C work just fine for me. This also depends on the pricing model used on different game worlds as the standard prices vary.

Regarding distribution, I tend toward 15% C and 85% Y for short and medium haul, more C for longer flights. This, however, needs to be adjusted to demand in your country/region/on your route(s).

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onboard service

once again, you have to find a balance between benefit of a higher rating (basically, a higher price you can demand for tickets later) and costs per seat for you.

again, you can go into as much micromanagement as you like. There is an optimum or two for each and every route. Again, I don't do that. I define service levels for certain ranges. AS already gives some ranges as certain services are only available if the flight has a certain minimum range. So warm meals, for instance, are only available on flights longer than 800km, additional entrees only above 1500km.

you should definately play around with the service, as you can safe money here. It might not sound a lot to change the per-pax costs by 5$, but multiply that with 80 seats, 7 days a week and 12 flights a day times the number of your fleet size...

I usually define onboard services for

- flights up to 800 km

- flights up to 1500km

- flights up to 3500 (+/- 500) km

- longhaul depends on the country I operate from and the destinations

now, how does the rating react to changes you make?

It appears to me, that you can approximate the results by assuming a basic function behind it. my assumption here is:

rating: r = a - b *x^2, while a appears to be mostly influenced by your choices in the left column, and b by your choices in the right column.

in other words: the left column increases the base value, the right column "stretches" it to longer distances.

and here, as with everything else, it is only one factor that plays into your ORS rating.

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start-up finances

You have 10 million AS$ to start with. Depending on the market situation and the expected earnings, you should keep a reserve to be able to pay salaries and leasing rates.

cash flow and how much to spend

Salaries will be deducted at the weekday and time you first created that particular airline, same for leasing rates but based on the time of delivery of the particular aircraft. You can find all upcoming payments in the cash flow statement.

Since the first payments won't be for another week, you can spend a lot of your money. Since the leasing costs and security deposits for leased aircrafts are at a fixed rate, you can make a rough estimation on how much money you can spend at the beginning.

You have 10 million, if you use 9 million (don't forget that you will have to pay for installing the seats and maybe for training pilots, so that is part of the 9 million), the maximum leasing rates due after the first week will be euqal to (in case of pure cargo operations - nothing to start playing with) or less than 900,000 $ (that is, because security deposit is always 10 times the weekly leasing rate. the security deposite, by the way, will always be 1 / 20 of the book value of the a/c).

So, max 900k $ for leasing rates plus staff salary. 1 million will cover most of that, so you should be fine spending 9 millions assuming you will make at least a tiny small profit in your first week. If you chose a good location, that will not be a problem at all.

If you are unsure, keep more money as a reserve, but in aviation, only money in the air generates more money.

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fleet management and pilots

fleet management

once you have your first aircrafts, pilots and seat configs are assigned automatically. However, as pointed out earlier, I strongly recommend to deactive those "comfort functions" in the settings area.

you can manually assign crews and seat configs by going to the fleet management screen. Just check the boxes for the a/cs you want to edit. While you can assign crews for different a/c types at the same time, this doesn't work for seating configs for obvious reasons.

you can also access the contract page, scheduling page and booked flight schedule from here.

should you receive a "cancellation of flight" notification, go here and hover your mouse over the word "cancelled". It will give you the reason for the cancellation.

pilots

Pilots, by the way, need to be hired from the job market. They are also type-rated, so a pilot with a rating for a Dash Q400 won't be able to operate an A340. You can check if pilots are available on the job market by clicking on pilot management. If there are none available for your required type rating, new pilots will be trained when assiging a crew to an a/c. The training cost is 5-8 times the weekly salary as an initial cost.

On established servers, there are usually enough pilots of most ratings available. However, if there are not, it might be wise to keep checking in here. By 5-8 times the weekly salary costs, it is obviously less expensive to hire pilots when available, even if they are not doing anything for the first 4 or 5 weeks, as training would be more expensive. So if you already know that you will add a/cs of a particular type, you might want to keep that in mind.

BTW, the same goes for firing people. You have to pay a compensation. It is usually better to just keep them when you are planning on using them again within the next couple of weeks.

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Network Structure

network structure is easy; the two extremes being a hub and spoke system and a point-to-point system. p2p is pretty self-explanatory. You simply connect two airports directly and don't really bother with connecting pax. The hub and spoke system means, you connect everything to your hub (later hubs, plural. This is mostly important in larger regions such as the US, the EU, China, etc, where you might want to operate hubs for regional traffic and transfers, unless you want to connect New York with that farm track somewhere in Alaska directly.

It is possible to operate a p2p service in AS, however, as a beginner, I strongly suggest, you use the hub-and-spoke system. Transfer pax will help you to fill your planes and stablize your load factors in case of external changes like new competition, changing economic index, etc. You can still introduce p2p for very popular routes later on.

for a more thorough explanation of hub and spoke, check wikipedia

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Scheduling Theory

Regarding scheduling, there, too, are two extremes with their own pros and cons, the trade-off being connectivity vs. a/c utilization.

- departure waves

- randomly distributing flights throughout the day

transfer time

every airport has a minimum transfer time. Pax can only transfer to flights that leave no earlier than after the minimum transfer time (plus one minute for rounding, AS works with seconds, but only displays minutes) and no later than eight hours (16 hours on Devau (I think it was Devau) after arrival (arrival, not when the a/c is ready for departure again). Pax that will continue on the same a/c have no minimum transfer time as they just remain seated. Those pax can also remain insight the aircraft and continue travel at non-transfer airports.

departure wave

for an airport with a minimum transfer time of 1 hour, the departure wave structure might look like that:

all a/c arrive at your hub as close to but no later than 10:59am and depart again as close to but no earlier than 12am. This way, all arriving flights offer connections to all departing flights allowing for maximum connectivity. However, you will have to keep a/cs on the ground longer than necessary to actually meet the "hub times" (the arrival and departure times for that wave), leading to a decresed utilization. A/cs only make money when in the air, thou. You will obviously use more than one departure wave, depending on the distances of your destinations. You usually end up with three of four daily primary waves.

Since slots for landing and take-off are a major limitation, you will soon see, that slots best meeting your waves will become sparse. Also, you need available slots at your destinations, as well. This isn't a problem for medium and small destinations, but you can't assume to freely plan your schedule when flying to Atlanta, JFK, Heathrow, etc, if you can fly there at all.

random scheduling

alternatively, you can schedule routes randomly, meaning once an a/c is ready for departure again, you have it depart, maximizing utlization. This way, connectivity suffers as you might just miss a transfer opportunity or only have the next one available 5 hour after arrival at your hub. Since you are not bound to time blocks for your waves, you will not encounter slot use congestions. (you might, if another airline is using departure waves at your airport).

things to keep in mind

  • when using departure waves, you can introduce secondary waves, so when there are no slots left for your primary waves, just introduce waves in-between. Since they will be within the eight our max transfer time limit, you will still get some transfer pax between the different waves
  • when using random scheduling, don't make it completely random. If you offer at least four daily flights to a destination, space them out evenly over the day, if you have one flight roughly every 6 hours, there will always be a connection to every destination within the eight hour max transfer time, although it might be a longer wait.
  • make yourself aware of the geographic situation. Who would even consider transfering at your airport? AS pax only consider connections that are no longer than twice the direct distance between origin and destination. so you might want to consider sorting flights geographically as to offer a better connectivity for traffic from east to west, north to south, etc.
  • while transfer times should be as low as possible, you have to consider the over-all travel time. If your direct travel time is 6 hours and three of them are for transfer, that is a very different story than a pax arriving from a 10 hours longhaul flight waiting for a regional connection.
  • keep the market situation in mind. if there is no competition offering faster connections, pax will have to use your flights (unless your ORS rating is negative). if there is strong competition, you need every single transfer pax you can get

there are many more ways to optimize scheduling.

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During Scheduling

let's finally schedule some flights. FINALLY!

Open an office

you will need to open an office at the desired destination. Simply go to the airport info page and hit "open office". At this point, there are no costs for that airport. Only when you start flights to/from there, staff will be hired to man that office. Costs are all part of the airline-wide salary calculation.

Scheduling

Go the the scheduling page of the aircraft you want to create a schedule for. Scheduling is rather self-explanatory. Just plan the flights the way it fits your network plan. It will show you, if the flight can be operated in general. If check marks are red, you obviously need to check why. It's usually aircraft performance, night time ban or slot availability. Adjust the scheduling accordingly.

Keep in mind, that "aircraft performance" only evalutes if the aircraft can actually make it from A to B. It does not check if you can operate at full capacity. So, if you are flying at the range limit of your aircraft, the available TOW might be reduced. In that case, you might not be able to actually sell all or any seats due to weight restrictions. This is something you probably already checked when deciding on a/c type. If not all seats can be sold, it happens in a fixed order. First, cargo is left behind, then Y, C and F.

First destinations

regarding your first destinations, I recommend to stick with national, as the competition will be lower or non-existent, depending on the market. Once again, a very good source is wikipedia. For a lot of airports, a list of busiest routes is available. That gives you a good idea where to start. The "pax demand" rating of an airport is also an indicator, but don't assume you will automatically get a full flight just because you connect two 7 bar airports. First of all, competition is bigger the larger the airports, secondly, just because a lot of people travel through, e.g. Atlanta and Caracas, it doesn't mean a lot of people want to go from Atlanta to Caracas.

Also, a good indicator is political and historic ties. You can't transport pax from Cuba to the US (see flight rights and restrictions), but Brazil and the Iberian peninsula have strong ties and thus demand.

A great tool to evaluate your situation is AS RouteMap

Maintenance ratio

On the scheduling page in the upper left corner, there is a display for the maintenance ratio. Everytime your aircraft is on the ground for more than two hours (again, due to rounding 2 hours plus 1 minute to be on the safe side), maintenance will take place, no matter if the aircraft is at your hub or anywhere else. It also does not matter, whether this was a scheduled maintenance break of if a flight got cancelled and the a/c is grounded because of it.

The update to aircraft condition will be displayed once the a/c takes off the next time. At this time, the costs for maintenance will be deducted from your bank account. If no money is available, no maintenance will be conducted.

The maintenance ratio should be as close to but not below 100%. If you go below 100% (which, in rare cases might be a reasonable interim solution), the a/c condition will continously fall until it is below 50%. At this point, the a/c will not depart until enough maintenance could be conducted to get back above 50%. You need to avoid that, as not only do you have to pay compensation to pax for cancelled flights, but also will your a/c most likely not be where you need it to be, so either you cancel the following flights and get the a/c to the right airport, or flights will be cancelled (and compensations paid) until the schedule requires the a/c to be where it got grounded again.

Once done with scheduling, make sure, all flights are displayed in green. Everything in red obviously needs to be checked. If you have already set prices, service profiles and such for the individual routes, you can activate your schedule. There are two options available, listed below.

If you have not yet set the mentioned above, do not activate until you have read the "inventory page"-part further down.

Scheduling an individual aircraft

  • maximize a/c utilization (if flying to the same destination again and again gives you a maintenance ratio of 90 or 200%, it's no good)
  • having an a/c fly only one route all day long, it is way easier to substitute this a/c for another type if you want to change the capacity
  • having an a/c fly east, then west, then east, then west, ... you have perfect "transfer" conditions, as pax can simply remain seated in that a/c and are not subject to the minimum transfer time at your hub
  • having an a/c fly only one route can cause problems with hub waves if the times don't fit, respectively the overall time your aircrafts are grounded to meet the hub times is distributed very unevenly, distorting economic performance data (so you got to be careful when interpreting the income-cost sheets of single flights)
  • if you plan to not use hub waves but offer a higher frequency, the frequency will depend on the number of a/c used and the trip duration, if you fly only one route with a particular a/c
  • some routes simply won't offer enough demand to fill all the trips you might be able to offer with one a/c on that route

Long story short: I don't really bother with that question. I usually start with four daily flights to major national destinations (if there is little competition), two daily flights to medium destinations and one daily flight to small destinations, if I do not know the country (I would not necessarily try bar 3/2 or lower airports at the beginning). Once numbers come in, I increase the frequency and price on those routes, that book full fastly or even right away. how many different a/c are being used for that route only depends on maximizing a/c utilization and your scheduling doctrine.

FYI: you will find, that later on, you might offer one daily flight that is being operated by seven different a/c throughout the week to maximize utilization of the single aircrafts.

Activation of schedule

You can activate "right away" or with a 72 hours delay. "Right away" means the earliest flight booked into the system will depart no earlier than 24 hours from now. This makes the flight available to one booking cycle. The same flight on the next day would obviously get two cylces, etc. If you activate with a 72 hours-delay, all flights would get the maximum of three booking cycles. (some special conditions can reduce those numbers by one, but that's not important at this point. you can find plenty of information on that on the msg board).

Which one to choose depends on whether you expect the flights to book full with one cycle. in competitive markets, that's usually not the case. If there is no competition, chances are good. And worst case scenario, you could still cancel the empty flights. Keep in mind the costs for pax compensation, so accepting the loss from a half full flight might still be preferable to cancelling. Also, you won't be able to fly the return flight, so do the math before cancelling.

This system of pax distribution also requires you to be patient before you decide whether a route is going to work or not. Since only connections that reach their destination within 72 hours are being considered. so if part of the connection is longhaul (either because you operate that or you have an interlining partner that does), they might only become available with the second booking cycle. Also, directly after introcuding a new flight, the potential feeders and connections might have already booked full by other connections. Only beginning with the fourth day, the new flight actually has the full potential of being booked. So don't judge a new flight before that.

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Inventory - route management

standard price

AS has defined a "standard price" for every route based on the trip length. You can assign a price that is between 50% and 200% of that standard price. The standard price model varies between gameworlds due to balancing reasons.

There is a minimum price you must not under-cut. It is the price you need to get to cover all direct costs of a flight when the flight is fully booked. No need to do the math, just click flight details once a flight has been entered into the system. It's the last row, I believe.

Since the minimum price would only cover the direct costs, you will - in almost all cases - ask a higher price anyhow, as you have to cover indirect costs and you probably also want to make some profit.

setting prices

When starting a new route where there already is competition, you can use your competitors' prices for orientation. Keep in mind, that they might have strong feeder networks and thus many of their pax might be transfer pax. So they might be able to ask higher prices and still book full, while you can't. Also, smaller a/c are obviously either to fill than big a/c. so if a competitor operates 20 daily CRJ100 flights with 30 seats each, that draws a very different picture than 20 daily B73X flights.

If there is no competition, start with with a price between standard price and standard plus 20%. Better make sure your first flights are full and then adapt prices, rather than suffering the cost of half-full flights.

setting onboard service

You can also assign an onboard-service here. Only those available for the trip length are being displayed on this page. it is possible to assign invalid service profiles when assigning them during the scheduling process. In that case, no onboard service will be conducted, leaving you with a lower ORS rating.

Keep in mind to either use the "apply settings (for return flight also) " buttom or set prices and service for the return flights manually.

Any changes to the route settings will only affect flights that will be entered into the system from that point on forward. So, if you increase prices for a route you already serve daily, the first flight with the new prices/service levels/etc. will affect all flights departing in 72+ hours, as they have not yet been booked into the system. The same applies to changes in seating configuration of a/c. the flights already booked into the system remain unchanged.

if you haven't activated your schedule(s), you can do so now. Congratulations! You are now starting actual operations as an airline.

wash, rinse, repeat

From now on, you should check the load factors and profit margins regularly and adapt prices and/or service levels to maximize profits. Also, if you see that a route is not working at all, consider re-scheduling that a/c to operate routes that make you money. You can still come back to the non-working route later on, when there are more transfer opportunities available.

Btw, just because the profit margin isn't very high or even negative, this does not mean, you should automatically discontinue that route. While at the beginning at a good location, you should be able to make good money off all your flights. Later on, a flight with 90% transfer pax, that creates a small loss, might still be profitable, if those 90% transfer pax help you fill one or more other flights, that might compensate for the loss incured by this particular flight.

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I would also add some more things:

1) Props (such as mentioned Q400) will receive maximum ORS rating of 92 instead of 99 or 100 jets would receive. This is important on heavy O/D routes where many players strive for a 99 rating

2) Using of Props between big airports (e.g. 8-10 bars) is frowned upon and may cause issues

3) My favorite maintenance provider is African. It gives you higher maintenance ratio and I also find resulting maintenance cost  to be lower than with default maintenance provider. Increased MR allows you to add more flights ...

4) If no pilots for e.g. Ejets are available, and player also operates 737 that has plenty of pilots available on the market, it's better to hire 737 pilots and retrain them to Ejets, the cost will be half than full training of Ejet pilots.

5) Preparing for larger aircraft - I find this really useful to create a schedule on a free 737/A320 (which I usually have several available as spares) and transfer it to Ejet. That way a "737" turnaround times will be used and the schedule can be easily transferred to 737/A320.

6) Many players prefer CRJ's for lower operating cost. I prefer Ejets because they can travel much farther than CRJ's. E-190AR can travel the farthest of all. Also SSJ100-95 is good aircraft, and can travel even farther than E190AR. If you are in a market without much competition (you do not need to fight for slots at your base airport), SSJ100-95 is an excellent aircraft and would be #1 choice, followed by Ejets. If time is of essence, Ejet would be my choice.

7) I do not like back to back scheduling, when competition gets fierce and AGEX is low, the revenues drop much more than on a wave scheduling system. Back to back scheduling increases efficiency of aircraft utilization, but at a cost of connections (as you correctly mentioned). At High AGEX time / low competition this does not matter, but after the player gets to 20+ aircraft he better try to reschedule them in wave scheduling model. That is what I would do.

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I appreciate your feedback and I will gladly address those topics in future entries.

I would like to ask you, though, to either send a PM or open a new thread to keep this one readable. thank you.

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Interlining

Why to interline

What is there to gain by an IL: if you have signed an IL, both your schedules will "act" like one, allowing pax to transfer between your and his/her aircrafts based on the same set of rules as within your own network (minimum and maximum transfer time, transferability at airport, maximum number of transfers ( = 2 !! ), maximum conidered trip length) and, of course, the connections have to make sense. No one is going to fly from a European partner to the US west coast, then back to the US east coast. Based on my knowledge of pax distribution, the more often your flights appear in the ORS, the more likely it is to get pax. However, if you really benefit from adding another connection that has the 2418th best rating, I don't know.

You really can profit from connections where a high transfer rate is to be expected. For instance, running an airline in Spain usually yields good profits on flights to South America, or a bridge between a hub at the US east coast  and a hub at the west coast should work nicely. Not only will the flights between the hubs make a profit, but available connections receive more bookings as well, increasing overall profit.

How many ILs to sign is more of a philosopical question, as - at least to me - the required math skills and tools are not available. Also, since AS provides very limited information on where pax come from or go to, this is more of a guessing game. This might be changed with a future UI, as more detailed transfer statistics might become available. However, the AS team repeatedly stated, that they do not provide all potentially available statistics on purpose.

Basically, you have those signing ILs with literally everyone. Then, you have those signing ILs exclusively and with a certain "distribution".

ILs early in the game

I prefer to keep interlining exclusive and well chosen. Also, I don't sign any ILs early on or only when it's a great offer. This also helps me to determine if my business plan for my airline is stable.

For as long as I have no trouble fillig my aircrafts, there simply is no need for an IL. if you have no capacity left, you won’t gain any transfer pax, if you have little left, IL transfer pax might block seats for your internal connections.

 

Usually, I wait until I establish medium haul routes before considering ILs. When I start my first medium haul routes, I look for potential IL partners at potential destinations. when I operated out of Istanbul, I, for instance, I looked for a partner based at FRA, CDG, LHR, etc. to offer my pax connections to central and NW Europe. On established servers, you can usually find a partner that's not too big (or IL costs are too high) but operates two or three hubs. you can then send your first medium haul flights fo those hubs and have connections available without having to sign numerous partners.

for your hub in in CCS, obvious choices for coutries to look in for partners would be the US and Brazil.

 

A crude calculation attempt at ILs

Let's consider the costs: obviously, it is great to have as many connections available as possible, however, you need network planners (automatically hired, as most staff) when entertaining ILs. The number is based on your fleet size (or possibly, number of flights per week, I do not know) and the value of your potential partner. Since both your airlines should grow, so does the number of network planners and thus weekly costs.

No matter how many departures you and your partner have at your respective hubs, the maximum number of potential transfer pax is obviously limited by the capacity of the link between your hubs.

Now, you have costs for the network planners/the IL, that need to be covered by the additional pax = transfer pax, you get from that IL. Those pax will either be fed to the link by you or will transfer onto one of your connections. So now, you can calculate the additional per-pax-cost per transfer pax. You can add that to the per-seat-costs of the feeder flight or connecting flight.

My "rule of thumb"

When evaluating a proposed or planned IL, I use the following rule of thumb:

I look up my average margin, available on the income statement, as it gives me an idea, how much of the ticket price I actually get to keep after deducting all costs. Then I take a look at the "facts and figure" page and check my average revenue per pax number.

I now make the assuption, that every transfer pax off a particular link to/from another player's hub will, at average, pay the average renue per pax for the feeder/connecting flight and my profit is the percentage of my overall profit margin.

For example: my profit margin is 30%, my average revenue per pax is 150$. So I am assuming to make .3 * 150 = 45 $ per transfer pax in profits. Once an IL is proposed, the number of required network planners and the costs for them is being displayed on the interlining page. So, now I can calculate how many transfer pax I need to get off of that IL/link, just to cover my additional costs.

Let's say, the IL costs me 45k / week, then I need 1000 pax / week just to cover pax. You now need to make an assumption based on your own transfer numbers available on the office page as well as experience. If the weekly capacity of the link is 700 ( one daily flight with a 100-seater), you are obviously not going to break even. If you have 4 daily 100-seaters, you have a capacity of 2800. 1000 / 2800 would mean, that 35% of the pax on the linking route need to transfer to your network. Obviously, that depends on number of potential connections (increasing as you both grow), geographic situation and competition, but that is a likely number. I usually aim to have at least 50% transfer pax on those routes, it can be up to 95% in rare cases. However, I only sign exclusive agreements with selected partners, where transfers appear to be very likely.

Risks in signing many IL partners

Now, I see a lot of players that sign with everyone, even, if not their hubs but only two or three flights meet at some remote destination of both of them. And some sign more than one partner per airport without increasing capacity of the link. So now, they have to pay for network planners for both partners, doubling the costs. They usually argue "but I can't fill my linking flight without the second/third/fourth partner". Well, be that as it may, what good does it do to fill the linking flight, if the costs of the additional ILs eat up all the profits and more?

This is obviously a very simplified approach, as it does not reflect the advantages of having so many more connections in the ORS. While the percentage is extremely low for a single connection, the sheer numbers will do the trick. I lack the tools to quantify that. Also, the flights operated on a particular link will generate profits all by itself. This needs to be figures in when estimating the total profit potential of a flight as well as interlining.

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Initial Public Offering (IPO)

Using subsidiaries allows you to have an initial public offering ( IPO ) for that subsidiary and thus make your subsidiary tradeable at the stock exchange. You can’t do that with holdings.

Personally, I use subsidiaries as well, but for me, it’s more for aesthetics, as I am not interested in IPOing (that’s a terribe abbreviation).

How much you gain

Should you decide to IPO, 25% of your current value will be available for signing in the form of shares. The IPO is considered successful, if more than 50% of that value are being invested in you. A maximum of a theoretical 200% of that value can be invested. This money will be available to you, obviously. However, you lose control of 20% of the total shares, the remaining 80% remain with your holding (or more precisely, the parent company that has founded the particular subsidary). You remain in control of a company for as long as you are the (relative ) majority share holder.

If you are on the investing-side of an IPO: If 50% of the available shares get signed, you will actually receive twice the number of shares you originally signed up for. their value is only at 50%, though, so that you still end up paying the same for twice the product.

If 200% get signed, the value of a single share is twice what it was assumed to be and you will only get hälfte he numbers of shares you signed up for.

So basically, you don’t really sign a number of shares but only decide how much money you want to invest in that company.

Why I don’t IPO

The reasons I do not IPO are, that

a) your financial information and certain interna become publicly available to everyone holding at least one single share,

B) you have to pay dividends (only 15% of profit, but still money I don’t want to lose),

c) since there was a lot of cheating in the past, the exchange market isn’t really an exchange market where demand and supply define the price. The value of a share is directly linked to the value of your company and trades must happen within a very small margin of that value,

d) it is not possible to go private again, even if you manage to retrieve every single share.

A rough estimate at IPOs

The only “benefit” appears to be the investment of others into your company. However, if I do the math, I don’t see a real benefit here.

Let’s say you were to IPO at your starting value of 10 millions. 2.5 million worth of shares become available. At least 1.25 million has to be invested in you to make the IPO work, a maximum of 5 million can be invested. Let’s take those as upper and lower limit.

With your current situation in CCS, I am expecting you to generate a profit of round about 1 million $ / week => 15% => 150k in dividends => 20% for others 30k. for the lower limit, that means 1.25 / .03 = 42 weeks, for the upper limit 160 weeks. Sure, that sounds a lot, BUT: if you can make 1 million after the first week and if you do a good job, you make 10 millions after four month (that is a conservative guess based on my own experience). I am making some mathematical assumptions here, if you want me to explain them, just let me know. however, a rough estimate gives you a total dividend payments to foreign investors of 4 months * 4,3 weeks/month * 3,3 million average profit/week (assuming a qubic growth of your profits) * 0.15 (dividend rate) * 0,2 (share of forein investment) = 1.7 million. So you more than paid back the lower limit already. Even if you only maintaince that profit, you add another 300k to that every week, so you have paid back the upper limit after another 11 weeks or slightly more than half a year total.

Now, you could argue, that by gaining access to additional money early allows for additional growth that expotentially grows, true. however, with the conservative growth expectation mentioned above, your company value will be at more than 65 millions after those four weeks without the IPO.

I am not an economist, but even though the numbers above are extremely rough estimations, I do not see a clear pro-IPO picture. If I then throw in the disadvantages into the mix, I see no reason for me to ever IPO.

There are way better and more precise calculations available on the board.

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Hi

I go by the nick of yukawa and I have been playing AS for some years now.

A while ago, I wrote an introduction to AS for beginners on the German board (as I am a German). I always meant to translate that to English, but never got around. Now, I want to give it another go by writing a kind of block. It's more of an endless explanation, though. As the "blog" continues, I might go into more "advanced" strategy, but that depends on how my "case study" is going. don't be surprised, if you find some phrases directed at someone. that would be towards my trainee.

three things to consider:

- I am not a native speaker so excuse any mistakes

- this is all based on MY experience. other players have other strategies and different reasoning. I understand, that there will be opposing opinions out there. that brings me to item three:

- should you have questions or comments, feel free to post them. to keep this "blog" readable, please check if there already is a "comments thread" or, if not, create one.

since I wrote the first couple of entries before the release of the new UI, some directions might be a little off.

thank you for reading

1. Getting Started

               things to consider when setting up an airline

     Starting Location - the MOST important of all

     What Aircraft to get

  • Maintenance Categories
  • Compare Aircraft Types
  • Standard Picks
  • Why you don't want to go big
  • ordering your first aircrafts
  • what now
  • two things I always forget

     Basic ORS

  • first image booster
  • right rating
  • rating of connections

  • pax distribution

     Seating Configuration

  • quality or quantity
  • seating by range
  • pax weight and range
  • first class

     Onboard Service

     Start-up Finances

  • cash flow and how much to spend

     Fleet Management and Pilots

  • fleet management
  • pilots

     Network Structure

     Scheduling Theory

  • transfer time
  • departure wave
  • random scheduling
  • things to keep in mind

     During Scheduling

  • Scheduling
  • First destinations
  • Maintenance ratio
  • Scheduling an individual aircraft

  • Activation of schedule

     Inventory - Route Management

  • standard price
  • setting prices
  • setting onboard service
  • wash, rinse, repeat

2.  A Closer Look

                I realize, those will be more controversal. Please leave a comment in the comments thread. Thank you.

     Interlining

  • Why to interline
  • ILs early in the game

  • A crude calculation attempt at ILs
  • My "rule of thumb"
  • Risks in signing many IL partners

     Initial Public Offering (IPO)

  • How much you gain
  • Why I don't IPO
  • A rough estimate at IPOs

YOU ARE AMAZING THANK YOU

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