High Costs Low Profits

English Boards Community Support
1

Hi all,

So my airline on Otto has 3 primary aircrafts with decent connections and most flights are fully loaded. My concern is that my costs are super high compared to profits. I've attached some screenshots to show this. The three aircraft types I have are:

  • Sukhoi Superjet 100-95
  • Bombardier Dash8-Q400 NextGen BASIC
  • Bombardier CSeries 300

I've had a pretty profitable airline with the same business model before, but in a server with only new aircrafts. Here's the link to my airline: http://otto.airlinesim.aero/app/info/enterprises/2311

Is there anything I'm doing wrong here. My pricing is 100% default for Y and 120% default for C. Are my aircrafts incorrect or is it there something wrong with my business model that leads to these high costs?

Please help, and thanks!

RanChin

2

Margins over 15% are fine. But you can raise your prices as you are nearly fully booked. Go for 125% and 150% (eco / business) but also improve your seats. Then you will have more profit.

3

Thanks, I'll look into the pricing increases and see how that works out. Though my cabin configurations and inflight services actually have pretty high ratings. So, I guess it's partly to do with pricing.

4

"Pretty high rating" could be not enough. Check all your routes on ORS and compare to your competitors if any. rating of 92 is not really fantastic on routes with competition.

EDIT: as your flights are nearly fully booked, you don't need to change anything. But if you see your rating dropping down with the new prices, you may need to change your seating.

5

Thanks so much, I've changed the pricing. Let's see how that helps. I'm also going to switch to some other aircrafts to reduce maintenance costs.

6

Your problem is that you are a small airline an fintelrine with half of Otto. Your network staff is huge and bloated and therefore your corresponding wages on per flight basis are huge. Besides network planning staff it also increases administrative staff cost.

Your only two options are: substantially add more aircraft and flights, or cut the interlines.

Given that you have nowhere to come up with money to substantially add more aircraft, the only real option is to cut the interlines… But then, you are left with staff which still needs to be paid wages, or 8 week parting bonus to fire them. Not an easy situation to get out of.

Your best bet might be to increase prices to see if you can increase cash flow and add more aircraft and flights to reduce corresponding per flight cost of those staff members.

7

Wow yes, that’s very true. I’m gonna try to work with increased prices and see what happens. Otherwise it’s just gonna be a slow growth for quite some time. I’ll try to capitalise on local airports though.