Realistic way to retain value in Airliner seats which are purchased!

Hello guys,

I have a suggestion that has been suggested (perhaps) in the past and which the A/S team had promised to consider in future (but not seen so far!). We all notice how as a new and struggling airline, we spend our resources to purchase very expensive seats and configure our aircraft. However, as soon as you decide to change anything, that configuration (which cost you an arm and a leg) is thrown out of the window and you have to pay all over again for another configuration! This is true even if all you wanted to change or modify is a single row changed to business class or something simple like that. For instance, recently i wanted to change the configuration of my 2 weeks old aircraft from 8C / 75Y to a market induced 12C / 70Y (same seat type just different configurations) and guess what?? I had to throw $78,000 away and replace it entirely just to change the configuration costing me another $83,000 in new charges!!!

I think this is unfair and unrealistic. In reality all an Airline would have done is to purchase 4 extra Business class seats and remove some Economy seats to create space. In truth however, trying to implement such a realistic approach will be a programming nightmare for the A/S team. My suggestion to remedy this situation is a very simple one. A/S should implement a system whereby all seats are depreciated at the rate of 0.6% per week + another 10% after initial purchase. In other words, just like a new car or equipment, the moment that the seats are fitted into an aircraft it should be depreciated by 10% and on top of this, every passing week should see a further drop of 0.6% in value until the point where the seat is completely depreciated off the accounts.

Let me give a real scenario to illustrate my point. Let us assume that I have an Aircraft and the cabin configuration has just cost me $213,000. If I operate the aircraft for 18 weeks and then decide to change my seat configuration for whatever reason, this is what that decision should cost (according to my proposal):

Original cost of cabin … $213,000.00

Instant depreciated cost… $21,300.00       @ (10% of original cost)

Time depreciated cost… $23,004.00       @ (18wks x 0.6%) x Original cost

Total depreciated cost… $44,304.00

Current derived value of old seats…$168,696.00 (Refunded to player)

This allows the player to salvage and derive some value (as in real life) from the asset (seats are assets after all) and it makes it easy for the A/S team to implement without entangling themselves in the nitty-gritty of what, which or how players wish to change their configurations. This proposal simply refunds derived value of seat or cabin back to player’s account while charging the player for the cost of whichever new cabin the player opts for. I will like to believe that the implementation of this proposal should boost players satisfaction and hopefully not be that much of a headache for A/S.

Just my two cents.

 

Agree. I was recently using a 20C/105Y config, and wanted to change it to a 24C/105Y (so basically, replace 20 Recliner Longhaul seats with 24 Recliner Shorthaul in Business, while the 105 Economy seats remained exactly the same with no change in pitch, yet I had to pay for those same 105 seats that don't change at all all over again! This makes no sense.

In reality all an Airline would have done is to purchase 4 extra Business class seats and remove some Economy seats to create space. In truth however, trying to implement such a realistic approach will be a programming nightmare for the A/S team.

Why would that be a programming nightmare? It should be fairly straightforward and simple.

Today:

  1. Write off all seats of configuration OLD.
  2. Acquire all seats for configuration NEW.

Proposed solution:

  1. Write off seats that are in OLD but not in NEW (simple subtraction, once per seat type).
  2. Acquire seats that are in NEW but not in OLD (simple subtraction, once per seat type).

I'm afraid though that the AS team has something way more complicated in mind and then says that there are no resources available to implement that.

I AGREE this always has been a thing that botherd me. I dont want to keep buying seats and throwing them away each time i make a change.  The seats are property of theairline, like the pilots i can switch.  So make a change fee, like 20% of the cost to modify the seating.  You should have a stock of seats like pilots.  This way you can even buy seats of the market if there are any.

Easy to implement

Frank1966, when you deal with computer applications, you have to think like a programmer - this means that you have to put processes in place which is not only robust and scalable, but must also be able to handle every scenario presented to it. The example that I gave above was just one scenario and what you did was to try and give an easy solution to that particular scenario. What my proposal does is to provide a solution that can handle all other scenarios regardless of what a player is trying to accomplish with his cabin configuration. 

For instance, above I talked about taking out some economy seats and adding more business seats. However, my proposal can also handle other scenarios. If as a player, I desire to do a total makeover of my 6 months old fleet’s cabin so that where I had Recliner long haul seats for business class and Leisure plus economy seats, I would now have Lie Flat 160 seats for business class and Comfort seats for economy class - how would you handle that scenario? By simply adding and subtracting seats? In this scenario, you are ripping out old configurations and putting completely new types! And generally speaking, Airlines only keep seats that are in current use in some of their fleets. If the entire fleet is being done then what is the point keeping old seats? Yet, one must remember that in reality, the Airline would still get value from the old cabin and this is the reason why my proposal above will always work. It is simply value based rather than being based on subtracting and adding seat configurations.

It is much easier, regardless of the scenario or configuration, to simply deduce the value and make refund to player (very much like selling older seats) and then the player can purchase whatever seat configuration suits their purpose. 

Yes, refunding the seat value (minus depreciation) might be a simpler solution to code, and would work at least as a temporary quickfix solution.

Right now the system doesn't affect us established players that much, but pretty much cripples newbies who don't know optimal seat configurations and have to experiment by trial and error.

I always wonder what the function " Remove Seats" is for if you cant keep the seats.

If you want to have a new configuration just select it,you dont have to remove it before.

I would wish too that you could keep your seats.

I paid for the seats i should be able to keep them, if i would like to trash them its up to me, right!.    I can sell them to hobbyists around the world for 50AS a piece!  ;)

Yes, I agree, what I meant was that would be an easy to code quickfix solution, until a proper seat handling system is created (as that’ll probably take a couple years).

If you want to convert a pax aircraft to a freighter you need to remove the seats.

And I would doubt, that real airlines will get much for their old seats, as most of them are custom made with specific colors and features. So getting the remainder value in your books might be questionable to me, or at least the initial depreciation should at least be 50%.

Though I’d support a feature that would allow to adjust a configuration with equal seats at lower cost.

Frank1966, when you deal with computer applications, you have to think like a programmer

Thank you for telling me that. With a degree in computer science and over 20 years in the field it's safe to say that I do think like a programmer.

you have to put processes in place which is not only robust and scalable, but must also be able to handle every scenario presented to it. The example that I gave above was just one scenario and what you did was to try and give an easy solution to that particular scenario. What my proposal does is to provide a solution that can handle all other scenarios regardless of what a player is trying to accomplish with his cabin configuration. 

Both processes, yours and mine, can handle every scenario presented to it. Mine is a very simple solution to a common and particularly annoying case (i.e. having to scrap he whole cabin just to add more capacity in one class at the cost of other classes even if you stick with the same seat types) which falls back to the current process in other cases. The beauty of it is that it needs no changes in the data model, no user interface, no migration and has no dependencies to other parts of the application (like accounting).

Your proposal is also simple and needs no UI, but since it takes the age of the configuration into account there will be at least some changes in the data model. Dependent on how it is realized (gradual depreciation or one-time depreciation) there may or may not be an impact on other parts of the application. While your approach is broader, it doesn't handle your initial scenario (i.e. changing a single row) very well since it implies that all old seats are ripped out of the aircraft and replaced by new ones.

I can see that both approaches have their pros and cons. Unfortunately it's not easy to combine them into one because that would mean you'd have to store the age of each individual seat. And THAT would be a programming nightmare.

I guess it is a question of method. The vital thing, the only important thing at the end of the day is that those precious seats which we spent good money to buy, do not simply disappear into thin air! As we speak, I am about to throw out another $138,000 in precious seats simply because my experiment hasn't worked as expected. Poor me :(

Maybe an option that we can sell the seats like aircraft or pilots.  So there is a stock of cheaper seats available on the market. You can opt for new seats 100% rating or cheaper seats with a lower rating.

I have created a ticket for a simple solution for this, but with low priority. frank1966's solution appears reasonable as a temporary measure.

Yes, refunding the seat value (minus depreciation) might be a simpler solution to code, and would work at least as a temporary quickfix solution.

Right now the system doesn't affect us established players that much, but pretty much cripples newbies who don't know optimal seat configurations and have to experiment by trial and error.

I'm a new player and replacing cabin configurations is ridiculously expensive for me. I have $1.7 million, which would be $2 million if I hadn't spent over $300K replacing a five day old configuration with too few business seats. I replaced the cabin config for 7 ATR, (44 or 72 pax) imagine a new player refitting his A32X or B73X, how would that work out?

I believe that MIDSA's model reflects reality because used seats are cheaper than brand new seats and so an instantaneous loss in value should occur. After 84 weeks of using the total loss of value is 50% (a full year is 52 weeks, so it takes 1.6 years to lose 50% value). It is simple, clear, easily calculable (I used a basic calculator) and someone who knows more about the airline industry might be able to inform us if this depreciation rate is realistic. 

For any calculation you might wish to make, use the equation below, where d is depreciation, C is the initial value, r is weekly depreciation value, w is the number of weeks, k is the standard initial depreciation penalty.

d = C (r)^w - k C

Please note that r should be inputed as a decimal not in percentage form (0.994 not 0.6%, because you remove the 0.006 from 1 at the start).

Also be aware that k should be treated as a decimal in the same manner as the weekly depreciation value (.1 for 10%)

You will never be able to reach 0 value, only a tiny decimal, as this is a sum to infinity, however with the instant depreciation constant K once you hit 10% the seats should no longer withhold any value. If an asset function for seats was made, then these could be kept even at 0 or negative value (which should be set to a minimum of 0), but there should be some penalty is using very old and worn out seats in the pax rating. 

Explanation of the Formula 

I convert the percentages into decimals by dividing the percentage by a hundred, this is due to the nature of a percentage.

Per-cent, means for every hundred, therefore whenever you state a percentage you are actually stating a fraction and this is why I've divided by a hundred.

If you were also pondering why I subtract from one, this is due to the nature of 1.

If you were to put 1 into the equation, 1 elevated to any power makes itself, so 1.

If I increase one, say to 2, when I elevate it to any power it will make a number many times greater than itself.

Therefore if I make the number smaller than one, it will become as smaller and smaller fraction to infinity infinitesimally small numbers.

I hope this didn't end up becoming a lesson on interest in mathematics but I put it there to serve a purpose so that people actually understand what they are doing.

frank1966's has now been implemented and will probably be rolled out with the next maintenance patch.

does it mean that we can only reuse the seat for the same aircraft and can't be retained to be used on other aircraft?

does it mean that we can only reuse the seat for the same aircraft and can't be retained to be used on other aircraft?

Yes, for now. Actually "storing" them is a whole different story.

 null

Hello folks,

I was wondering, is this in place? I mean, lets say I have a seating configuration of 20C 150Y, and in the same aircraft I would like to change it to 30C 120Y using the same seats …
Will I pay full price or will I pay a smaller price than that shown as I already have the aircraft with some of the seatings that will be used?

Thanks