As any airline that operates 200+ planes in heavily contested market, there becomes an inevitable point where there are some flights which are actually losing money. Not the whole planes (in which case obviously it makes sense to look for new routes for the bird), but flights here and there within the schedule.
How do long-time players determine which flights to cancel?
I know one rule is to see if the flight direct costs (fuel,navigation, leasing) are covered.
But what about if the flight still is loss making, but has a high proportion of connecting traffic (either originating or terminating on that flight).
Where do you draw a line whether to cancel such flight or not?
(this, of course, after you have tried to save the flight by adjusting price, etc.)
I look on the number of connecting passengers and try to calculate the overall benefit they bring me on the "other" flight .. using the long short haul (1000 km flight) rate as a base and multiplying by a profit margin. If the number is higher than the loss the flight produces, I let it be.
But there is one flaw, of course ... because it is not known where the passengers really come from, and especially what is the connecting passenger ratio between business/economy class, the whole calculation may be far from the reality.... maybe the passengers connect from a short (400 km) flight instead of 1000 km flight and their "connection contribution" is much smaller than the above calculation would indicate.
So .. my question to the seasoned pros of AIrlineSim ... how do you determine whether to cut the flight from your schedule?
And if/when you cancel it, what do you do ... do you just leave the "hole" in the schedule? (imagine that it is a bit difficult to program other flight in because of slots, or time window, maintenance would get over the minimum, flights too close to already scheduled flights, etc.)