When should someone do an IPO in this game?
I would never IPO
You care to explain why? An IPO gives you access to capital. Now you do give up a portion of your company but you can still keep control with 51% ownership. I would say putting 20% of your company isn't necessarily bad.
If you always want to keep your own company, don't IPO. You would lose the ability to freely transfer funds between your company and holding after the IPO. I don't see too many benefits from that
Ahh thanks TWA, I didn't realize that was the case in this game. So another question if you don't mind? How do I transfer funds between my airline and the holding company? I'm still new to the inter-workings of the game. Thanks!
You simply own an aircraft, then transfer it to the airline. When you sell it back to the holding, you get the value of the aircraft. You would pay twice much money at the first time, but you can benefit from that later on for as many times as you want.
Thanks!
When your airline is in the market, you can't just transfer the aircraft from holding to the airline. It adds the difficulty to transfer funds. Of course, of you have a good friend ingame, maybe you can transfer money by selling aircraft back and forward.
You can see the difference after an airline IPO.
You need the first option to do a simple transfer
Okay gotcha. So can I transfer funds from my airline to my holding company?
You can do it either way when you get an aircraft not in service
Okay thanks!
I guess I'm little confused. My holding company doesn't have any cash. So how do I transfer cash to the holding company?
Your airline can buy an aircraft, let's just say it's an LET. You use the first option to transfer it to the holding. Then you sell the LET back to your airline using the second option. By selling the aircraft, your holding gets a price of an LET. That's how it works
I never do IPO UNLESS there's a super large competitor in my hub. It's like selling off your future profit for an immediate boost, which is only meaningful if you intend to overcome your competitor(s).
Also if you intend to be a large airline on the server with multiple subsidiaries, IPO is a no-go. While your IPOed company could set up a sub in an investment-open country, you can still do that but you need to decide on the amount of capital. Once that sub of IPOed company is established, you cannot transfer any more capital to it. But if you have a private company, where a holding owns a sub, a sub can transfer money to holding and holding can create sub 2, or sub 1 can create sub 2 (I just like to have everything under holding one level down and not a tree multiple levels down, but you can do it either way); when it's private you can freely transfer money and aircraft among holding and all the subs you have, let's say sub 3 is struggling but sub 2 is very profitable, you just transfer money to sub 3 from sub 2. But if sub 2 (or sub 3) is IPOed, you have no way to transfer money into it, or from it.
You also give you a lot of privacy with the IPOed company, everybody can see how you are doing, if you are making or losing money, what is your cash flow, etc. If you are private, none of that is available to the public. Also if you own stock in an IPOed company you get details about load factor, revenue per passenger and other operational information. Competitors can buy just 1 stock and know all about you. If you do not IPO, your private information is kept private.
So yes IPO would allow you to boost capital, but if you become good at AS you will find business models that will make you a lot of money without a need to IPO and forego many of the options for expansion in the future. If you cannot freely move capital, you will not be able to expand fast into new markets.
Frequently IPOing is used to sell off airlines between the players. Frequently the new owner integrates the airline (basically, slots and routes) into the main airline and later liquidates the remains of the purchased company, again, for capital reasons.
So these are my reasons why I would never IPO.
Thanks everyone!
An IPO is a solution for 2 reasons :
1/ when you want to get more cash and grow instantly
2/ if you want to sell your airline to someone else, this is the only way to proceed
2b/ if you want to interline between two of your airline that belong to different holdings, IPO - sell majority shares to someone else - interline - buy back.
sorry fred, j/k :P
Yes :) if you have a friend ingame, this is an option to merge 2 airlines into one holding
I learned it 2 months ago via a ingame friend :D
2b/ if you want to interline between two of your airline that belong to different holdings, IPO - sell majority shares to someone else - interline - buy back.
sorry fred, j/k :P
That is prohibited and would result in a serious trouble for you