My observation about pricing formula on Quimby

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21

Thing is, the ratio is all different at different distances. So unless we know the exact function that accounts for each of the Y, J, F class, and cargo, we have no way getting the true ratios.

You can get the ratio from default price. The only difference is that you will have a different ratio for every route so you will have to calculate ratio every time instead of knowing that it is 1,3,5.

Calculating the ratios is not so much extra work. If you have calculator or excel sheet its just plunging the default prices and you get your ratios for your route 10 seconds extra.

22

You can get the ratio from default price. The only difference is that you will have a different ratio for every route so you will have to calculate ratio every time instead of knowing that it is 1,3,5.

Calculating the ratios is not so much extra work. If you have calculator or excel sheet its just plunging the default prices and you get your ratios for your route 10 seconds extra.

I beg to differ on this. First of all, you have to write down all default prices,a nd write them to Excel. You have to do this for all your routes. Even C-X route out of the outstation that you use as a filler at 3 in the morning.

Calculate time it takes to copy all that data. Then, create excel formula, and then go and manually adjust those prices. If you, as many players do, use different seat configs, you will find that on more than 50% of your routes you have 2, 3 , 4 or even more seat configs, which require different price (based on seat type/price basis), which you have to go flight by flight, see which aircraft the flight is assigned to, which seat config it uses, and what the appropriate rate form your Excel sheet should be. Do this for Y and C, and on many routes for F as well. You will see VERY SOON that it is no pleasure to adjust rates. It may take you several days being a full-time job to do it, if you own hundreds of planes.

Second consideration that must be made is the one I already mentioned. A business model based on current system for seats/prices. It may well become the case, if the pricing formula is implemented on older servers, that your current model will turn from profitable into loss-making. I give you example: a Lie Flat in C can warrant a 40% increase over default rate and maintain 99 ORS. So imagine route with Y 100, C 300 (default), you have LF140 and charge 420 for C. You maintain 99 ORS and that is what you need to maintain because you are in highly competitive market and you know from your experience that doing 84 ORS is no good on that route. So armed with that knowledge you are running ORS 99 in C on that route. If new price formula is implemented on older servers, now default C drops from 100 to 200, so with rate of 420 you are actually beyond maximum allowed price (200%), and your ORS is something like -(minus) 95000 points (irony) instead of 99. So you go, see the ratio, adjust C to 280. But now you are making much much less money, and maybe the flight is not profitable, because in highly competitive market it may be C class that is actually making you overall flight profit. Remove that, and your flight is at loss. So now you see that with such low C rate (and in most SH/MH routes also new price formula Y fare is lower than actual Y rate) your aircraft is not making money. So instead of 73G or 738, you decide to put in a CRJ or E-Jet. It has lower per trip costs and it MIGHT make you money where bigger plane cannot. BUUUT (a BIG "BUT") you actually cannot move those flights, because you are at slot congested airports with 4% of slots remaining, and simply there is no way to move flights to a slightly slower aircraft. Yes, you could switch 739 into 73G, but if you need to switch to a smaller plane, you are out of luck. Or maybe, with those prices, a route that was running fine on CRJ700 becomes unprofitable, and you need to put in a turboprop, but cannot because turboprop is so much slower and you cannot get slots for it.

What I see is, if new pricing formula is implemented on older servers, a same revolt, coming from big and small players alike,similar as when AGEX went down, and it will be then back to "previous setup" after couple of weeks of protests which will include tire burning and molotov cocktails throwing.

23

I still do not get where would it take you more time compared to what it takes now to change all prices. You do not have to write down all prices if you are not doing it now. I have no idea how you change price but if you need ratios you just take the default price, plug it in excel formula, get ratios for that particular route, and change the price using your method but instead of using 1,3,5 as multipliers use what you got in excel and that is the only extra work I see from this new price formulas.

For the second consideration

First of all everyone would be affected not just you, others will not get competitive advantage over yo in any sense.

I personally think that it is too easy to make money in this simulator and it is long known that short-haul routes are too profitable while long-haul are unprofitable. This is a very smart way from the AS team to fix it AND make this simulator more realistic.

I liked the AGEX downturn it made it much more interesting.  I see Airlinesim as a challenging competitive simulator not a sandbox where everyone should be making huge profits. It is true that some people will be angry in the end AS team has to decide what they want this simulator to be.

 

24

I would welcome this change especially after the change to AGEX a few months back saved many mismanaged companies from ruin. Also we won't know how this will affect many of the airlines out there to tell you the truth, but I do know that many might change theirs seats and add more to offset the price change on short routes.

25

Hi,

I am not playing on Quimby. A temporary server does not really attract me  ;-)

But allow me to add my two pennies...

First of all, one day into a new game world seems a bit early to judge a new pricing formula.

Secondly, I don't know the relation between these new "variable" default prices and the corresponding ORS ratings. Take an 900 km route and a 1400 km route. Use the same seats and on-board service. Set the price on both routes on default plus 20%, and check the ORS rating. If you get the same ORS rating on both routes, I see no problem with setting prices on different routes.

Thirdly. In the past there have been complaints about unrealistic short (<400 km) routes and low profit margins on long (>7000 km) routes. If the new system tries to tackle these two problems, it is an attempt that I would support. The coming months will tell if the results are promising.

And finally... the new server was announced as a beginner's game world. Introducing these new default prices may have turned everybody into a beginner. Even experienced players will have to test new business models  ;-)

Jan

26

Thirdly. In the past there have been complaints about unrealistic short (<400 km) routes and low profit margins on long (>7000 km) routes. If the new system tries to tackle these two problems, it is an attempt that I would support. The coming months will tell if the results are promising.

I have almost no <400km flights, so my "complaints" are based on calculations I did for 400+km flights, most of my flights are in 700-2500 km range, with 80% of those flights being in 1000-2500 km range. I agree very short flights might/should be less profitable, but if we are talking about a 2000 km flight being less profitable under the the formula, than this should be a moment to stop and review the model.

What the simulation would greatly benefit from are two things:

1) marketing

2) fare buckets

You could have 3-4 fare buckets for Y class and maybe 2 fare buckets for C class. You could decide what portion of seats you assign to each fare bucket, and you would create a percentage of default rate that would be the given rate for that given fare bucket. Different fare buckets would result in different ORS ratings and the seats would be assigned exactly according to ORS rating. If 50 seats on your plane would give you 99 ORS in Y, and another 50 seats would give you 84 ORS in Y (higher price), the cheaper seats would get filled first, more expensive later on (exactly the way ORS works now). But you could do much better yield management. Now THAT would be bringing realism to this simulation... not an across-the-board price formula change that renders all short/medium haul flights 35% less profitable.

27

Marketing won't work since the smaller airlines won't have profits to support it like a larger airline.

28

@ Rubio 

for your suggestion about the fare buckets ... It was mentioned in the dev log that at current we have a kind of "dumb" passengers ... even offering these fares right now would not do anything since AS passengers could not tell the difference. It was clearly said in the dev log that we are looking into ways to change the distribution, Pricing and also the passenger itself so it will be possible to create a Low cost airline and make use of flexible "zone type" seatings. But you can not change it over night and it creates other Problems .... but we are working on it.

For the new Formula ..... the Idea was to balance the Profits especially for Eco and Business Class since it was too high .... so the high unrealistic growth we have seen we hope to reduce a little. Since this is a restricted server intended to let people experiment there is not double demand .... but no night restrictions and double number of  slots. Of course a limited server allows us to test new Ideas, Formulas etc on a bigger scale then the internal test server ... and things that are tested may be rolled out or be modified and then implemented on a new regular server.

29

If you, as many players do, use different seat configs, you will find that on more than 50% of your routes you have 2, 3 , 4 or even more seat configs, which require different price (based on seat type/price basis), which you have to go flight by flight, see which aircraft the flight is assigned to, which seat config it uses, and what the appropriate rate form your Excel sheet should be.

Have you heared the abbreviation KISS for Keep It Short & Simple? If you want to reduce your workload, simplify your structures. Actually thats a very important thing in real companies, if structures or to complicated the system breaks down. I think some real companies hire external consultants to simplify/streamline structures&procedures.

For a small airline you can micro-manage the seats of every indivual aircraft, but once your company has reached a certain size you will propably do more harm by applying too much diversity than by applying the same configuration to all aircrafts of one type (or maybe two configurations, if you have a very diverse operations area for the type, but I would not go for more). In my company I have 128 aircraft and all but one type (and thats 787s, one configuration for "normal" longhaul flights and one for ULH flights, i.e. MEX-SHA and MEX-BNE) have only one configurations (okay some still have an old configuration, but this will be updated to the current standart when I have some time...). I guess I am not loosing much money with this, I guess less than 0,1% of the total profit...

I don't want to critize your way to play, but if it is complicated you can't complain if you don't cope with changes well...

30

I still do not get where would it take you more time compared to what it takes now to change all prices. You do not have to write down all prices if you are not doing it now.

You don't get it? Please sir, let me illustrate.

Here is what happens right now, on existing servers:

1) I see a fully booked flight priced (Y/J/F) at $130/390/650;

2) I increase the baseline by $10, i.e. $140 now for Y;

3) I multiply 140 by 3 and by 5, respectively, in my head; I get 420 and 700 and update the AS route management page with the new numbers;

4) I plug the number in (I only need to plug in the 140 because Excel does the rest) and update my Excel file with the new price;

5) I close the Excel file and browser.

In this new formula, instead of having a nice and neat Y:J:F ratio, I will have to do the following:

1) I jot down the prices for all four classes (inc. cargo) for one route;

2) I plug the numbers into my Excel file, which gives me the Y:J:F ratio for that particular route;

3) I repeat step 1 and step 2 for several hundreds time because I have lots of routes;

4) I, in my exhausted self, see a fully booked flight with arbitrary pricing ratio;

5) I increase the baseline price by $10, i.e. $140 now for Y;

6) I plug the number in (thank god I only need to plug in the 140, because I can't multiply 140 with some random number with endless decimals in my head);

7) I copy the numbers from the Excel file to the AS route management page and update said page;

8) I can finally close the Excel file and browser.

It is a lot of work to calculate the price ratio for EVERY SINGLE ONE OF YOUR ROUTES, and if the AS team decided that this formula doesn't fit anymore, then what, do we need to update the ratio for possibly thousands of routes on the Excel file all over again? Please bear in mind that we don't run small airlines with 10 routes. This, calculating the ratio for all routes thing, is a lot more tedious than one might think.

May I also add, my airlines went premium heavy on cabin configurations because premium classes are much more profitable after the new cabin rolled out and the new price ratio (Y:J:F = 1:3:5) favours premium cabins a lot more than Y class. So there are (at least) two things that AS team could do if they really decide to stick with the so-called "new formula":

1) cabin refunds (why would I put big seats in J class that occupy more than 2 times that a Y seat occupies, when J fare is less than twice the Y fare?)

2) disclose the formulas AS used for calculating the default price (at least they could save us the trouble of repeating step 1 and step 2 several hundred times)

31

I haven’t played on Quimby, just following the discussion.

Some people claim it’s more difficult to achieve the same (ridiculous) margins as on other game worlds and it’s getting more difficult.

The only thing I can say: Hell, finally!!

32

I haven't played on Quimby, just following the discussion.

Some people claim it’s more difficult to achieve the same (ridiculous) margins as on other game worlds and it’s getting more difficult.

The only thing I can say: Hell, finally!!

100% agree. Though I suppose it will take a long time until it gets implemented into the other game worlds, if ever. Everyone would have to reasess their routes...I can see the whining already. 

33

Mysterious. I alway look at the bookings situation and increase/decrease  and afterwards I will review it the next week. No calculation as the classes do not only have different prices but also different product which also not simply to be multiplicated. And this is working for years now.

34

Mysterious. I alway look at the bookings situation and increase/decrease  and afterwards I will review it the next week. No calculation as the classes do not only have different prices but also different product which also not simply to be multiplicated. And this is working for years now.

Everybody works differently. I like to stick with the price ratio and I find the seats that match ratios the best, because then my prices are easier manageable.

I could say the same that this is working for years for me now, but I don't expect everyone to use my method, just like you shouldn't expect everyone to use your method. Some people like to use the price setting tool to set a universal price instead. There are different ways to play a game :)

35

I haven't played on Quimby, just following the discussion.

Some people claim it’s more difficult to achieve the same (ridiculous) margins as on other game worlds and it’s getting more difficult.

The only thing I can say: Hell, finally!!

With all due respect, I guess I saw that coming.

When the 2nd generation cabin configurations were rolled out, players were forced to use bigger seats to achieve same ratings, so consequently the default price had to go up in order to compensate that. Otherwise you are just forcing everyone to make less money than before without changing the AGEX at all.

And now, with the introduction of the new formula, we are back to square one in terms of the default price but the new cabin configuration still sticks; so they ARE forcing everyone to make less money than before (by before I mean before the 2nd gen seats rolled out). So yeah, I saw that coming, and the AS team should have seen it coming too.

Moreover, because of the new cabin configurations (and hence the new default prices), the premium classes (J + F) were made a lot more profitable than Y class. Because of that, I reconfigured my planes premium-heavily. And now, little more than three months, the AS team is telling us "oops, my bad, the default price of J and F class should have been much lower than that". Well, I guess it is only fair that we get a free cabin refund if the formula really does go live on existing server, don't you think?

36

When the 2nd generation cabin configurations were rolled out, players were forced to use bigger seats to achieve same ratings, so consequently the default price had to go up in order to compensate that.

No one is / was forced to use bigger seats, it's the players making this decision. Lower seat ratings can be easily compensated by other ways. If anything, you were forced to use smaller seats to get the same amount of seats into the plane. Raising the default price was a wrong decision. It would have been the perfect time to force players to use realistic seating. It was the one opportunity for AS to finally have this "5-green-bars" mentality tackled, because guess what, Comfort (Plus) seats in Eco on any given shorthaul route are way over the top.

If the previous / original default prices were to remain the same, Comfort seats would not bring any profits and no one or at least less people would use it.

It would also end the overkill demand issues we have on the game worlds (any game world).

so they ARE forcing everyone to make less money than before

This is a very good thing. We hardly have any real competition going on. Everyone makes a ton of money right now. An Airline (or any business for that matter) is all about beating the competition but this very thing is hardly part of this simulation.

Overall I get the feeling this games is more about Slots than anything else (at this point, I know they are planning on changing things but the effects remain to be seen). If you have the Slots you're good to go, because demand is not the issue, at all....I think it was Sobelair who said his LF in Peking (with all Slots being taken) never drops below 90% even in very low AGEX conditions. It really tells a story.

37

Forexlive, there is actually a 100% statistically proven correlation between seat size, price charged and ORS.

As a startup airline with no image, you can get 45/99 with a decent onboard service (4 bars in Y), 85% of default price, and Leisure seats.

You can get 49/99 with the same onboard service, 130% default price, and Comfort plus seats.

A 737-700 can seat 138 Leisure seats or 90 Comfort plus seats.

Calculate default price AS$135 in Y class for a 900 km segment

$135 x 0.85 x 138 = $15,840

$135 x 1.30 x 90 = $15,795

What have we seen? That bigger seats give you the same revenue, maintain the same rating.

It's player's choice to decide which seats he uses.

Your point "It was the one opportunity for AS to finally have this "5-green-bars" mentality tackled, because guess what, Comfort (Plus) seats in Eco on any given shorthaul route are way over the top." actually does not make any sense at all. I have just proven to you that using recliner SH in Economy and using Leisure in economy, given their price rating, actually gives the same result revenue-wise. It's not about making ton of money. It's about whether you go for capacity, or the frequency. THAT is the strategy.

Now another thing. I know that AS had in mind to "lower" the 99 ORS norm into something like top-70's to mid-80's. But what happens if you have ORS 84 (base ORS for Leisure seats in Y on short/medium haul with decent service) ... you try to drive out competition by increasing your ORS. You do not want to increase it too much so you can still earn substantial money. So you go get ORS 86. Now you have bigger share of passengers. Now your competition sees it and they jump up their ORS to 88. Then you see it and jump it up to 90. Then your competition sees it and says what the heck, and jumps it up to 99. And you are left with only one moce: jump it up to 99 yourself. And you can achieve 99 by either lowering your fare, putting in better seats, or putting in much better seats and charging more. Both of these 3 premises hold true since I have been playing Airlinesim. Both the old and the new seat config are based on those 3 premises. But in old config, ecoplus gave you 99 ORS in Eco. Now you have to use Comfort plus which takes up more space than previous Ecoplus.

And the same story goes for C class seats.

Your ideology is "nice" but unrealistic. As long as people are human, they will always try to be the ones who are better.  It's a classic prisoner's dilemma: working together, or pulling the rope to one's end and benefit? It is same as commercial collusion to maintain pricing in services and industries.There will always be someone who breaks the picket line. As long as people are human .... then for so long nothing will change in Airlinesim player-behavior-wise.

38

It is a long reply so please proceed with caution.

No one is / was forced to use bigger seats, it's the players making this decision. Lower seat ratings can be easily compensated by other ways. If anything, you were forced to use smaller seats to get the same amount of seats into the plane.

Well if you put it that way... no one forced you to use smaller seats either, it's the players making this decision. But we're just going in circles here, it all depends on which of ratings or capacity that you are after.

If you are after ratings, then you had to use bigger seats (i.e. reduced capacity) to achieve the same rating.

If you are after capacity, then you had to use smaller seats (i.e. reduced ratings) to achieve the same capacity.

It would have been the perfect time to force players to use realistic seating. It was the one opportunity for AS to finally have this "5-green-bars" mentality tackled, because guess what, Comfort (Plus) seats in Eco on any given shorthaul route are way over the top.

If the previous / original default prices were to remain the same, Comfort seats would not bring any profits and no one or at least less people would use it.

This is a whole other issue, and cannot be tackled by the new cabin configuration and the new cabin configuration alone. I agree that it is not realistic for airlines to have comfort plus seats in Y class on short haul flights, but please bear in mind that this is a simulation, and this "5-green-bars" mentality is the closest thing we have got right now.

This topic has been brought up in the forums for multiple times already, and we all know that this is a structural change to the way AS passengers behave. Right now we got one type of passenger, the ones that go after high rating. But what you are talking about now is different passenger profiles that behave differently according to the distance that they are travelling. This is some extensive rewrite to the AS game itself and it was never gonna be rolled out with the 2nd gen cabin configurations.

This is a very good thing. We hardly have any real competition going on. Everyone makes a ton of money right now. An Airline (or any business for that matter) is all about beating the competition but this very thing is hardly part of this simulation.

Overall I get the feeling this games is more about Slots than anything else (at this point, I know they are planning on changing things but the effects remain to be seen). If you have the Slots you're good to go, because demand is not the issue, at all....I think it was Sobelair who said his LF in Peking (with all Slots being taken) never drops below 90% even in very low AGEX conditions. It really tells a story.

As you say, we hardly have any real competition going on, it is true. So why not fix the demand itself? Why fix one of the few things that doesn't need fixing?

Yes, everyone is making a ton of money right now. So by lowering the price, therefore lowering income for all airlines - that's it, there is STILL no competition! All they have done is slowing down the expansion of the airlines. The root to the "no competition" problem is the constantly high demand. If you recall, the AGEX formula was changed a while back and THAT is the cause of the lack of competition.

Before the AGEX was "fixed" (I really wouldn't call it fixed because it is worse than it was), the AGEX was really low and many large airlines were on the verge of bankruptcy because of the low demand of travel, and players were whining about the low demand (yes, the formula was changed because player complained). And suddenly, the AGEX was "fixed" and demand sky-rocketed and saved a lot of those asses. So before you, sir, accuse of the players "whining already", please think about the players who already whined their way into fixing the AGEX formula and got a huge increase in passenger demand, and effectively killing off competition for all eternity.

You are right that this game is more about slots than anything else. Jan did also mention his high load factor in Beijing in very low AGEX conditions. You are also right that "it really tells a story". But the story isn't about passenger prices being too high, the story is about the demand of travel remains high enough during very low AGEX periods to keep mismanaged airlines alive. Those airlines are the ones that occupying all the slots in large airports.

Like I said, it is a very long reply. I congratulate you if you make it this far :)

39

Good discussion going  :)

Your point "It was the one opportunity for AS to finally have this "5-green-bars" mentality tackled, because guess what, Comfort (Plus) seats in Eco on any given shorthaul route are way over the top." actually does not make any sense at all. I have just proven to you that using recliner SH in Economy and using Leisure in economy, given their price rating, actually gives the same result revenue-wise. 

You missunderstood me a little here. I meant "over the top" as in, way too luxury for this kind of flight. It should be (in my very own opinion) not be possible to have a profitable flight with these configurations. Afterall, this is Economy class we are talking about. If you want better you take business or first, right? And the problem that comes along with it is not enough capacity throughout the game world.

it all depends on which of ratings or capacity that you are after.

I see. Depends on the point of view.  ^_^

 So why not fix the demand itself?

This was my original opinion too. I asked for an "experienced" game world with much less demand (like AGEX 700 in boom times combined with much much higher landing fees, so people cannot use small airplanes to trick the PAX distribution system. Well, now we have a beginners world.... <_< ). However, in some other discussion the seat capacities came up. People using overly good seats results in low capacity leaving a lot of passengers on the ground. I kind of agree on that now. While demand may be on real world levels I expect the game world capacities dont go along with that number.

 please think about the players who already whined their way into fixing the AGEX formula and got a huge increase in passenger demand

I once wrote that in a thread to SK after the AGEX "fix" where people complained about the higher demand (yes really they did that :D ). I dont remember exaclty but it was something like this:

"First, people complain about low demand because of the AGEX and it get's a fix. Now other people complain about too high demand, rescuing all those badly managed airlines. Actually you should change the AGEX back to original....it's the same logic"

PS: Did not convince him  ;)

40

Is that the price goes down a AS dollar every 24h on some routes also in the formula?