My proposal is to implement real joint ventures as a solution to dummy investment holdings.
The most important characteristic of a joint venture company would be a shared control.
I have been thinking of two type of joint ventures that could be implemented, and they can work independently one from another.
1. Private Investment
Private placement investment would allow airline to invest capital to an existing airline, and receive an agreed upon share percentage. This setup could be used to help a struggling airline, for example. The features of this setup would be:
- An investor company must have equity of 100 million or more and be existent of 6 months (24 weeks) of more
- Beneficiary company must have equity of 25 million or more and be existent for 3 month (12 weeks) or more
- Beneficiary company must have at least 20 million in leasing deposits or more
- Beneficiary and investor would agree on % (less than 50%) that would be given to investor
- Investor would receive exact % of profit of the beneficiary airline (e.g. 49%, if 49-percent share is agreed upon)
- Investor could invest up to double the amount of equity of the beneficiary company, in return for a maximum of 49% share
- Both investor and beneficiary would have shared control of the airline, but investor would have limited control
- Investor's limited control would allow: a) Scheduling, activations, and cancellations, b) Price adjustments, c) up to 2-3 new airplane leases per day, d) create and apply seating and service profiles
- Investor would not be allowed to: a) cancel leases, b) sign interline contracts, c) pick maintenance provider, d) do anything finance-related, e) purchase aircraft, f) lease out aircraft to others or within holding, g) establish new subsidiaries, h) liquidate ... and maybe some more things that have not crossed my mind
2. New joint venture
The feature of this would be for two airlines to create a new joint venture, with 51/49 share. However, both would have 100% control of the airline with the exception of liquidation (which would require voting-like setup as is present with alliances with 100% voting for liquidation).
This would allow two partners to establish an airline for mutual benefit which they both could control and operate (e.g. establishing a long distance airline for two short haul airlines, or establish a feeder/regional operation that would serve two mainlines etc.) The JV could be either in one country or in two countries, and would have traffic rights of the majority shareholder.
In this setup, the profits would be agreed upon percentage, and would be distributed by the percentage ownership ratio. E.g. partners could agree that 50% of profits be paid out, split according to ownership stake (e.g. 51/49 %). The value could be changed weekly, by voting of the partners.
The main feature is that both partners would have absolute control of the joint venture airline with the above-mentioned exception of liquidation.
To make the second case attractive for AS, it could be set up that a pure joint venture company would be charged 2 credits per day, 1 for each partner.
The above listed proposals would enhance player cooperation and would eliminate the need for players to come up with solutions-to-the-alike of dummy investment companies, etc.