More Efficient to Use 2 Planes on 1 Route?

[smiller]

I read something that left me confused. Is there a scenario where using two smaller planes for one route better than one larger plane?

To keep in simple and to the extreme....For a certain route I can buy one A380 that will cover all of my Economy but only 1/4 of my Business and none of First Class. That plane will cost me $403 million. Or I can buy one A330 and one 747-1 that will cover almost all of the three demand areas. Those two planes will cost me $535 million. Then of course I can't raise prices due to extra demand and there are two planes to maintain over one. Maybe I misunderstood what the person meant but he mentioned running 2 or 3 planes on his routes.

Is it better to buy the two planes to take up almost all of the original demand or to adjust down the passenger amounts for the single larger plane on whatever demand you can get and raise the leftover demand rates?

[Kishlin]

Hey,

Should you ask for an audit on any of your route, you'll get an "ideal" price with a corresponding demand. This is where you get the most out of your route, aka the highest possible earnings.

If your offer is lower than the audit demand, you can raise the prices up to the point where the remaining demand (eg the demand minus your offer) is 0. Which means you offer a seat to every single passenger who wants to fly your plane, but no more than that, which means no vacancy. When that happens, you get the most optimal earnings for the offer you provide, but they will be lower than the highest possible ones when your offer match the audit demand.

This is linear and go downwards. Which means the lower your offer, the higher your prices, but the lower your earnings. So as you keep adding planes to a route, your offer goes up, and your prices go down, but your earnings will go up anyway.


That being said, I know that doesn't answer your question, but I wanted to make sure that how prices and offer works is crystal clear to the both of us.

Now then, let's say you have two planes. Should you put the two of them on one route, or each plane to its own route?

Keep in mind that having an offer higher than the audit demand is (almost) never a good option. Make sure your actual offer is always lower than the audit demand. Your earnings will go down drastically if it's not. Write that down and never forget it. Your offer must be lower than the audit demand.
But what if your audit demand is high enough to allow you for two planes on the route? Or even more?

While putting each plane on a separate route might sound a better option, as the sum of the earnings is higher than the total ones of one route with both planes, you have to consider that the money you invest is also higher. You have to pay for the second route!

To find out which is better, you might consider using the Return On Investment indicator. I'll let you google that up, but basically, it says how long it takes to get your money back from any investment. You might find out, for example (which is obviously completely random... or maybe not), that at first it's better to have one plane per route, but as the route prices go up, at some point having two planes per route becomes a better option.

I won't do the math for you, you're the CEO after all.

Best of luck!

[smiller]

Kishlin,

I great appreciate all of the info in your detailed answer. It was all really helpful. I did the math on the numbers of my highest paying route (a little over 4.5 million turnover) and if I did the calculations correctly it looks like I would add about $900,000 per day by adding a second plane. I'm not 100% confident that I did all of that right but I think so. As I only have 8 routes so far I think I will take your advice and for now stay with the one plane per route to build up some higher daily cash flow for growth but later will come back and adjust the routes that make $ sense.

Thanks again!

[Kishlin]

You are very welcome. Have fun playing!

[Folzz]

how do i get a report for each line, how many planes are set to work on it, with demand, tarif, and plane details?