Hi guys, I am relatively new so please excuse me if this seems impractical. I feel a little annoyed with the current subsidiary system that is in place (I am in the GATOW world, which limits you to one holding).
I have started in one large airport (I can reveal which one if needed but I would like this to be left open at the moment because I think it’s a universal issue) and have been growing my airline for about a month now. I was just starting to really feel like I was getting somewhere, when a very large parent company (based in Europe) opened a subsidiary in my airport. Within a couple of weeks this company has used up a large chunk of the slots at the airport and because of competition has dramatically reduced the number of passengers that are going onto my aircraft, due to the fact they have over 40 aircraft (growing every day), despite only being there for a couple of weeks. This must mean that the starting capital of this subsidiary must have exceeded $50,000,000.
I have no issue with subsidiaries and I can see the need for them such as for cargo, getting over the maintenance cost increase of having a large variety of aircraft etc. but feel that it is largely open to abuse. I think larger airlines have the opportunity to just swamp a market in a new airport whenever they feel like they want to do something a bit different. This is at the cost of greatly impacting the gameplay of new airlines, which doesn’t really encourage people to start out/continue in the game. In addition they don’t have any risk of going bankrupt because they have a huge reserve of money which can keep them going. In the particular example I mentioned above, it has a bigger impact than starting a new holding, as it is basically starting a ‘new holding with steroids’, which is against the rules of the server.
So my suggestion is: having a cap on the starting capital of a subsidiary and thus prevent the airline lease a huge number of aircraft from the go. Furthermore, I feel there should be a limit on the number of subsidiarys within the same country because otherwise airlines can just abuse the traffic rights of particular countries/regions, mainly Europe, and can just expand from airport to airport. Also, as I deem my example to be against fair play, there should be a stricter stance on airlines doing this and should be reprimanded accordingly.
Well, that are the rules of an open market. If you don’t want huge airlines to tap into your market with equity from other markets, just don’t start in an open market.
I think limiting the amount of starting capital contradicts the idea of an open market. Further it’s limiting strategic options, i.e. to change organizational and fleet structures.
In terms of closed market - it’s the idea behind that market to be able to hop from one hub to the next to scale ones business.
I understand that this is not very nice from a start-up perspective, but one needs to deal with that fact in terms of ones strategic choice. I.e. it’s a high risk strategy to start within an established market in an open country. If you go for a closed country (or treaty member) it’s probably less risky. However,you still have to deal with existing airlines doing their business including their privilege to service routes outside their home country if it’s within a treaty.
Besides, one’s strategy might be not to establish a hub-system but to service a wider network within a large market, e.g. the EU and thus needs the rights to start from different airports. That might be not very sound, but it is a crucial part of Europeans airlines business.
Last but not least, transferring cash from a holding to a sub is possible. Thus, even if you reduce the starting capital, it doesn’t have any effect. Closing the possibility to transfer cash would contradict any economic logic.
Hi Dark_Oblivion,
I'm not sure I can see why you are using words fair play and against the rules, as the airline I suspect you are at your hub has not played against the rules. From what I can see the airline in question have merely taken over slots left vacant when I shut down my airline which had around 1000 departures.
In terms of fair lets have a look at the two biggest airlines at your hub. One has not created a subsidary, where as one has. What advantage does one have over the other? The only is keeping maintenance costs down if using more than three types. Neither options have gained the airlines extra traffic rights, and neither have had a better advantage on the other.
What I am really trying to say is I don't think it is unfair and I will explain why...
Say your airline in x european country does very well and you end up with 100mil in the bank to invest, a oppertunity arrises at another large airport in europe...say Athens. You want to expand so you can either (1) spend the 100mil within your main company and increase fleet size by say 50, (2) spend the 100mil on a new subsidary with a fleet size of 50. Same number of aircraft, same money, same slots, same traffic rights
If I were to make a suggestion (And you won't like it) if you are a beginner player then starting up in a 10bar airport is not the best move in the world. If slots are available, then someone will come along soon and make it very competitive.
Hope that makes sense
Ian