I see the problem with the wide body A/C, but on the narrow bodies it isn't that bad? My excisisting airline on Kaitak is actually doing better (more profitable by 8%) with the new seating despite the little bit lower ORS rating on the seats. I was able to raise the price of C class seats without pricing muself out of the comeptition. And to be honest, it is this "tweaking" of your airline what makes it fun for me.
The long haul flights do have a problem, it is much more difficult to get full planes and make profit. In real life the long haul network is what is making money at the big network carriers. Although in RL they will have to settle with a profit of 5-9% a year instead of a week ;-)
Maybe some solve is add some points , when long route is service by wide-body aircraft ? Everyone peoples complain when ( as a tourist charter ) is using narrow body 737/757 for example at route DUS-BKK or DUS-VRA .
This solution will be limiteduse 737-900HGW at the all long routes, especially now where at this new cabin system , narrow bodies are more profitable at this routes then before.
After all,before it ,I think should re solve thequestions structure cabin 777 and 73-3/73-7
I would not allow airlines to go back to the old seat configurations.
However, one could decrease the rating of the old seats. AS could announce that after a certain date, all old seats will have a 20% lower rating.
Jan
I like this idea.
I would advise against being able to change the seat back to the old style as well. This cabin editor is a step forward of AS and it would be unwise to just revert to the old model.
Maybe some solve is add some points , when long route is service by wide-body aircraft ? Everyone peoples complain when ( as a tourist charter ) is using narrow body 737/757 for example at route DUS-BKK or DUS-VRA .
This solution will be limiteduse 737-900HGW at the all long routes, especially now where at this new cabin system , narrow bodies are more profitable at this routes then before.
After all,before it ,I think should re solve thequestions structure cabin 777 and 73-3/73-7
The 739 is the closest replacement of the 752...you solution would kill off the market where a widebody is too large to fly...like the Newark - Shannon flight on UA in real life.
I see the problem with the wide body A/C, but on the narrow bodies it isn't that bad? My excisisting airline on Kaitak is actually doing better (more profitable by 8%) with the new seating despite the little bit lower ORS rating on the seats. I was able to raise the price of C class seats without pricing muself out of the comeptition. And to be honest, it is this "tweaking" of your airline what makes it fun for me.
The long haul flights do have a problem, it is much more difficult to get full planes and make profit. In real life the long haul network is what is making money at the big network carriers. Although in RL they will have to settle with a profit of 5-9% a year instead of a week ;-)
The loss of capacity on 737s are not that severe, comparing to, let's say, 787. The number of Y class seats in my 787s is reduced from 194 to 147 in 3-class configuration and from 210 to 161 in 2-class configuration; that is pretty drastic.
But then, I get to increase the fare of my J class and F class tickets and that makes up the money. But there is no way I could compensate the capacity loss without switching to a larger plane. That's why I am eagarly waiting for the arrival of the 789, and/or the 359.
By the way, it doesn't matter if you got the profit margin of 5-9% for a week or a year, if you keep making the same profit margin for a year, it will just be the same ;)
We don’t want to go back to the old seats. We’re trying to find a way to use new seats. Right now, many of us sees a large disadvantage to change. We want to change, but we simply can’t by many reasons. One of them is that old seats get better ratings no matter what you do, hence many players are keeping old seats. Also, the problem with seat width. They are too large.
We don't want to go back to the old seats. We're trying to find a way to use new seats. Right now, many of us sees a large disadvantage to change. We want to change, but we simply can't by many reasons. One of them is that old seats get better ratings no matter what you do, hence many players are keeping old seats. Also, the problem with seat width. They are too large.
Very well said - something needs to be done to discourage people from using the old seats.
By the way, it doesn't matter if you got the profit margin of 5-9% for a week or a year, if you keep making the same profit margin for a year, it will just be the same ;)
Hmm... I wish you were my bank manager, Calvin.
He only pays me 2% interest per year. I would love to get 2% every week ;-)
He only pays me 2% interest per year. I would love to get 2% every week ;-)
Jan
I think it is lost in translation what he means. He means an APY/APR of 5-9% with interest payments weekly/yearly works out to the same amount of interest for the whole year. Not 5-9% interest per week (5-9*52 weeks)... I do agree with your statement that 2% every week would be great.
Originally Arjen wrote that real airlines have to settle with a profit of 5-9% a year instead of a week.
You and Calvin are right, 5% is 5%. But we don't make a profit of 5-9% per year, we make a profit of 260-468% per year.
Look at the balance of your airline... is it 5 to 9% more than last year ? My Chinese airline started exactly 2 years ago. Value went from 10 million to 1000 million. That is what Arjen meant with 5-9% per week. And that is why I wished my banker did the same ;-)
Originally Arjen wrote that real airlines have to settle with a profit of 5-9% a year instead of a week.
You and Calvin are right, 5% is 5%. But we don't make a profit of 5-9% per year, we make a profit of 260-468% per year.
Look at the balance of your airline... is it 5 to 9% more than last year ? My Chinese airline started exactly 2 years ago. Value went from 10 million to 1000 million. That is what Arjen meant with 5-9% per week. And that is why I wished my banker did the same ;-)
Originally Arjen wrote that real airlines have to settle with a profit of 5-9% a year instead of a week.
You and Calvin are right, 5% is 5%. But we don't make a profit of 5-9% per year, we make a profit of 260-468% per year.
Look at the balance of your airline... is it 5 to 9% more than last year ? My Chinese airline started exactly 2 years ago. Value went from 10 million to 1000 million. That is what Arjen meant with 5-9% per week. And that is why I wished my banker did the same ;-)
Originally Arjen wrote that real airlines have to settle with a profit of 5-9% a year instead of a week.
You and Calvin are right, 5% is 5%. But we don't make a profit of 5-9% per year, we make a profit of 260-468% per year.
Look at the balance of your airline... is it 5 to 9% more than last year ? My Chinese airline started exactly 2 years ago. Value went from 10 million to 1000 million. That is what Arjen meant with 5-9% per week. And that is why I wished my banker did the same ;-)
Jan
Actually the difference is even bigger. 5% every week would be 1264% after a year, not 260% :) (1.05^52 = 12.64)
If you can convince your banker to give you 2% every week compounded interest means you would have 280% after one year! (1.02^52 = 2.80)
If your airline went from 10 to 1000 million in a year your average weekly growth was around 9.26% (1.0926^52 = 100)
Actually, NO. Source: I'm an economist and this is basic finance.
If you have a profit margin of 5% every week of the year, then you have a 5% profit margin for this year. The starting capital has nothing to do with it.
If you have a revenue of 10mi and a profit of 500k for 52 weeks, that gives you a 5% weekly margin, then you have an annual profit margin of:
(500k52)/(10mi52) = 500k/10mi = 0,05 = 5% per year!
Also, you're mistakenly comparing interest rates with profit margin. A rate is different from a margin.
The annual profit margin is only the sum of weekly profits divided by the sum of weekly revenues. There’s no sense in exponentiating weekly profit margins to reach the annual margin.
Exponentiation is used for compound interests because every period of time is directly linked with the past. This is not true for profits and revenues.
Originally Arjen wrote that real airlines have to settle with a profit of 5-9% a year instead of a week.
You and Calvin are right, 5% is 5%. But we don’t make a profit of 5-9% per year, we make a profit of 260-468% per year.
Look at the balance of your airline… is it 5 to 9% more than last year ? My Chinese airline started exactly 2 years ago. Value went from 10 million to 1000 million. That is what Arjen meant with 5-9% per week. And that is why I wished my banker did the same
Jan
Jan, you say profit but describe return on equity (ROE)
Profit = revenues - costs
Profit margin = (profit / revenues) *100%
ROE = (profit / equity) *100%
So if you always use all of your equity at a constant profitability, the ROE develops as you say. A weekly ROE of 5% translates into a yearly of 1.05^52*100% = 1,264%
The profit margin remains untouched as revenues and costs increase proportionally. (See VOC’s explanation)
