...Speaking about company image now my staff mood is one bar red, Is raising the wages by 10% going over the country average enough to make the mood green? Or do you suggest to raise more than 10% (from the default value set when the company has been founded).
Hi,
I usually pay my staff maximum (double) salaries for one week. That immediately brings staff mood up to 5 green bars, provided that the country average is not too high. The next week you can safely lower the salaries back to the country average... staff mood will remain at 5 green bars.
that is correct. But I rather pay 100 staff members double salary for one week, than paying a growing number of staff members 10% more for several weeks.
There is another aspect... if you increase salaries for several weeks, other airlines will follow suit. Only to avoid that their staff mood rating goes down again. That will raise the country average salaries and force you to raise your salaries again if you want to improve your staff mood rating. And so on. In the end, all airlines are paying a lot more than the original country average.
If you operate the only airline in the country, there is no problem. The country itself counts like a company that pays standard salaries. But if there are 10 airlines, the country "deadweight" will not be enough to stop the spîraling salaries.
Yes, sure. The average salaries will go up higher if you double the salaries (higher than if you only raise salaries by 10%). But one week later you can lower your salaries again.
Most airlines check staff salaries every now and then. But not everybody checks it every week. If you increase your salaries for one week, half of the other airlines won't even notice if you lower your salaries again the next week. And if your doubling your salaries caused a significant change in the country average, your lowering (by half) of the salaries will also cause a significant change. Those airlines who did check, will be happy they can also lower their salaries again. You don't get that continuous inflation of salaries.
And a lot of players forget that communication contributes to the success/failure of your airline. A few weeks ago I started an airline in Kenya. I sent a message to the existing airline, explained my intentions, and also warned him to keep an eye on his staff salaries because I was gonna raise them for one week. I got a very friendly reply. Result: we still pay "normal" salaries.
If your airline is located in the USA or China, or another country with many airlines, it won't make a big difference if you increase salaries by 10% during two months, or if you double the salaries for one week ;-)
One more thing... staff mood has an influence on your airline image. And airline image is a cumulative thing. If your airline has done 1000 flights and your airline image is 60, another 1000 flights with rating 70 will only bring your airline image to 65. That alone should be a good reason to get staff mood up to 5 bars as soon as possible.
Unlike some replies here, I would not start an airline in NCL. You rely to much on transfer traffic, however in a busy market like the UK there are simply to many direct flights available for transfer to work.
Unless you are operating from one of the main London hubs, I cant see NCL being a viable long time option for anything other than a small regional airline....
The market in Devau is very occupied and the airlines there have an immense network. They also usually have good image so there is no reason for the PAX to change to your airline unless it is the only choice.
passengers don't change. Every day "fresh" passengers (who have never flown before) book their tickets. The bookings are spread over the available flights, according to the ratings.
A new airline will get it's fair share of the bookings, again according to its ORS ratings. The problem for a new airline in a saturated market is connections, or rather the lack of connections.
and a 30 year old 727 will even give you an overall ORS rating of 100.
But as you also said, old planes hurt your airline image. My airline image is above 80. If your airline image is like 60, the ORS ratings will be different. And the difference will be more than one point ;-)
Jan
Edit: I compared two subsidiaries that share some routes.
Airline one has an image of 80 for economy
The flight between BEY and DXB has an ORS rating of 58/98.
Airline two has an image of 83 for economy
The same flight has an ORS rating of 59/99.
All other variables seats, service, price... are the same.
I have done that with Israeli Airways, and can confirm, ORS 100 with a 38.2 year old 727 ADV.
You just gotta choose less popular routes, here is on that always works for me, CLE-IND. If you want to be cheeky, use a Dash 8Q400, I hate them (because they are cheeky) but they pull in a good profit, as a starting aircraft i would say the 727-200RE is the best, offering a great profit at a low leasing rate and not-to-bad ORS rating. all up to you, but you gotta enjoy the challenge to the point of masochism sometimes.
every jet can get a rating of 99. And the faster jets like most wide bodies and the old 727, can get an overall ORS rating of 100. That is only a matter of balancing what you offer (seats, service...) and what you ask (ticket price). It is not a matter of age.
The problem is that old planes hurt your airline image, and that maintenance costs more.
When you look at the aircraft evaluation tool, some old planes are as profitable as new planes. The lower leasing costs seem to balance out the higher maintenance costs. But when I look around, I see no "old" and established airlines that operate old planes. There is something tricky about old planes, but I don't know what it is.
The tricky part about using old planes is the overall image for the airline will be built very very slowly...new planes make your image grow faster. A super image vs a zero (neutral) image at fresh start equals several points in ORS rating which in turn make your flights more attractive with the same seating/price service combination. In other words, you can get to the coveted 99 spot easier and with less sacrifice. I guess modus operandi is using cheap planes until you get enough cash (talk about hundreds of millions), than starting switching planes to new ones to start raising image.
They are rather long but if you have the time to watch them they are great.
I also used these videos for starting help as well. My best advice is that you really need to start with small planes so that you can learn your business. With smaller aircraft every change/adjustment is not as large of a risk and you can start to understand what your business needs to grow.