Possible improvement for Corporate Finance
Since I launched subsidiary operation last month, I have to move the cash from first company to the others everyday. The media I used were some islanders, when business got bigger i bought a CRK(33M$).
As we know, present Loan System is work like this, once your Flight Equipment(FE) under your Assets sheet is over 10M, you can have appx. one third of the amount of FE out. For example, a brand new airlines with a CRK(33M$), you can immediately get 11M cash out. And of course, you have to pay back and the interest rat is damn high.
Now, if you have one a/c at least values over 10M, you can let’s say create 2-3 subsidiaries for different hubs or markets. What can be happening is and really risky for your financial rating is, Only One a/c can take out Loan from Each of these subsidiaries. If any of the new player, happened to do so, first please make sure you are able to payback those loans in time. Because the Credit Granted by the bank is 2-3 Times it supposed to be.
There is no way to avoid financial issues like this by now. Let sit tight for As next updates to fix it. A verification step is very necessary to check if the asset and liabilities doesn’t go wrong by 3:1 ratio when transferring the a/c between the subsidiaries.
This is the one suggestion i can think of by now.
I know there is still a lotttt of the complain about the turn around time and new ors system. Hope someone can enlighten the dev. to work out a better way.
If you go from Islanders to buying a CRK I think you might want to rethink your strategy. If I decided I would allow unlimited loans and if you cant pay them you go under. Considering the enormous interests they are very impractical but if you wanna risk it then why not?
Also you cant take unlimited loans and remove all assets. I have a couple of times been blocked from transferring away aircraft from companies with huge loans.
Good to know in your case, a/c was blocked from transferring away. I am wondering if there is a secondary liabilities/FE ratio (less than one third maybe) is set to prevent edge operation like that.
Islanders and CRK are just for explaining the fact. I had other a/c eg. Cessna in between.
Most of my concern is, as the company grows bigger, it’s getting easier to acquire a large amount of loans which is a advantage not shared by every company. It may occur further potential risk for the balance of competitions. This is a strategy game, I believe every airlines shall have the equal advantage running our routes.
To buy a CRK to be able to get loans you need about 30 million which takes weeks if not months to save up for a new player. For the same amount you could get 20 leased CRK and operate them and make more money. Furthermore as I previously said loans are very bad.
For example: If you start with 10 million and invest those and make a profit (highly unlikely) of 5 million per week you still need 6 weeks to buy a CRK just to start getting loans which you will pay a hideous interest for.
If you start with the same 10 million and make the same 5 million in profits and gradually reinvest them into the business you will get exponential growth (ie first week 5 million in profit, second 7.5 million, third 11.75 million, etc). So after six weeks you will make almost 33 million in profits (almost 50 million the week after).
I dont know about you but I would rather make 33 million per week than make 5 million. I dont call that unfair. Plus that when you finally got the ability to take loans and expand your fleet then all the slots will be already gone by the player making 50 million in profit.
Also as advice, if I where you I would rethink my fleet strategy. Cessna, Islanders and an owned CRK isn’t the best combo.
You must be a very experienced player to state all these figure so precisely. You are right about the starting with a own plane is definitely not a wise move, even the worst you can make in AS.
I think there is a miscommunication between us. I would like to make more clear of my situation. I was setting up a new subsidiary urgently to joining the domestic market with as much cash as possible. My main company can take out appx. 70m cash, quiet good but still not enough at that time. Then think of the CRJ may take out quiet a lot of loan(appx 10+m). It succeed to get extra 12.5m in main company (800m assest, at that time), and same amount in other 3 of my subsidiaries (Regional company, Cargo company).
It is really abnormal, same asset can have multiple times loan in different companies at the same time. Once I removed the plane from that company, it can’t take further loan. Is that means if someone is ambitious enough, then should open 10 companies at same time to acquire 10 times of a CRJ should be credited to. However, I am not sure if this is possible. Now you should understand most of My concern is if it is possible, definitely world accelerate the grows in a bad way, Because It doesn’t make sense at all financially.
Btw, I really like your sound advice despite I’m not that new to the game.
So it is still more profitable to invest 30M in leased planes than create 2 subsidiaries just for purpose of taking loans. Then if someone who plays for a month opens 3 subsidiaries then it will be suspicious. If he is playing for half year then he doesn’t care about loans anyway.
There is no AS experience required for exponential functions. A lot of players use their P/E to predict future profits and schedule investments. It’s a simple mathematical function used by most in economics, science, math, etc.
I understand your point but I don’t think AS lets you transfer out assets when you have more loans than assets (I might be wrong). Also the more loans you take the higher the interest gets and as we both agree the interest will kill you. Thereby I don’t understand the worry.
One suggestion I would like to see in the future…
Management --» Personnel Management (aka salaries): Instead of having to change pursers salary and press adjust, flight attendants salary and adjust, station managers salary and adjust, over and over again (almost 20 times), why can’t we just change all salaries and then press adjust and this action update all the salaries that have been changed?
It surely would be a huge time saving update!
Another idea perhaps, talking about actions that cost alot of time:
How about batch creation of flight numbers? Instead of having to create them one-by-one, on the route management page of a certain route be able to fill in a range, e.g. 100-150, check odd or even, it loops through that range to auto create all flightno’s.
You’d still need to manually edit the time for every individual flight, so I can’t really see the point of batch creating ghost flights you’d then have to edit anyway.
But then I never use the scheduling page and always create flights on the plane itself, seems much simpler to me.
I try to orderly create flight numbers in ranges for certain routes or hubs pre-scheduling, and not randomly select the first available flight number for every flight that I schedule and have a chaotic pile of flightnumbers that can never be sorted anymore.
Could you explain if you see an orderly way of doing this in the method you use?