Huge Income loss on Some flights

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caribbeancruzer

Huge Income loss on Some flights

Post by caribbeancruzer » Mon Aug 11, 2008 2:51 am

Recently I have been doing a couple of flights and have had some large losses of income. Here is an example of two:

Income from tickets: PAX (17) x Ticketprice (65v$) 1.105v$
Fuel costs: Fuelprice (1.67v$) x 1.234 x Fuel bought (1100kg ) -2.267v$
Crew & catering costs: -85v$
Cargo income: 1.46v$/100nm x Distance (64nm) x Cargo (224kg ) 209v$
Bonus 0v$
Pilot salary: Airline Income x Pilot salary percentage 0v$

Gross profit: -1.037v$
x Multiplier (1000) -1.037.000v$

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Income from tickets: PAX (164) x Ticketprice (71v$) 11.644v$
Fuel costs: Fuelprice (1.17v$) x 1.234 x Fuel bought (50079kg ) -72.303v$
Crew & catering costs: -820v$
Cargo income: 0.36v$/100nm x Distance (108nm) x Cargo (19144kg ) 7.480v$
Bonus 0v$
Pilot salary: Airline Income x Pilot salary percentage 0v$

Gross profit: -53.999v$
x Multiplier (1000) -53.999.000v$




Now is it really fair to have the multiplier ding you that much? I understand it is to help new startups get some cash flowing to build more. But in these two cases where the flight does not make any money, it drains it all away. I searched a little bit on the forums but did not see anything refrence this, I hope someone can be of help.

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flightsimer
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Joined: Tue Oct 09, 2007 3:35 am

Re: Huge Income loss on Some flights

Post by flightsimer » Mon Aug 11, 2008 5:56 am

well if you start out with a small plane, then that will happen. if you start out with say a 737 or 757-300, then that wont happen. your first trip will be alot, but if you tanked it, then there will be plenty of fuel left to do more flights. which will be nothing but profit. i could lease u one to show you. also it will depend on the airport, find a cheap airport and fly out of there... or find a close airport and fly to there to refuel... even though its unrealistic, it helps alot. i just spent 55mil on a 777 refueling it at an airport that sells for 1.08, if i would of used my hub, it would of 1.63. so i saved a TON. and that was with a 300 multipler...
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North Eastern Airways

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Quantum
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Re: Huge Income loss on Some flights

Post by Quantum » Mon Aug 11, 2008 10:11 am

Hi,

There are several factors that can affect the number of passengers that you carry :-

Distance flown
To deter VA's doing short, unrealistic flights there is a formula used to get a 'base-line' pax figure . The formula is 10 passengers + 2 extra passengers per nm distance of the flightplan for ANY capacity aircraft up to its max seating capacity. So for a 10nm mile flight, the max pax would be 10 + (2x10) = 30. For a 50nm flight it would be 10 + (2x50) = 110. This formula is used before any of the other factors below get applied.

Low VA reputation
You will not get full flights until your rep gets towards the 120 point.


Ticket price set higher than the standard fare on the route
Set your fares high and the number of pax willing to travel with your VA reduces


Another VA setting a lower fare on the route
If another VA flies the route at a lower price than you then you will 'lose' pax to the other VA

Other things that affect your income - over fuelling. In your example you loaded 50 tonnes of fuel for a short flight, this is called 'tankering'. Tankering can be beneficial if subsequent airports you intend to visit have a much higher fuel price but be careful you don't get too excessive as losses can be huge. Subsequent flights will get greater income as you don't need to fuel or only need a minimum refuel of the dearer fuel. Tankering at an airport is pointless if the fuel at your next stop is cheaper or close in price.

It's swings and roundabouts with the multiplier and you have to accept the 1000x losses as well as the 1000x profits. You will gain experience the more you fly and you will get to know the traps that can bite you financially. Pick the appropriate aircraft for the route, set your fares wisely and manage your fuel efficiently and you will be OK.

Regards

John
CEO - Classic British Flight Services
Classic aircraft on Classic routes
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caribbeancruzer

Re: Huge Income loss on Some flights

Post by caribbeancruzer » Mon Aug 11, 2008 8:18 pm

Thanks for the reply guys, all that you have said makes sense with the exception of one: "Distance flown
To deter VA's doing short, unrealistic flights "

There are many airlines that may do a 50-100nm flight (island hops and rual communities) so are those flights getting smaller pax loads? If so many something should look at the distance and base a pax account according to an aircraft. A 50nm flight in a 1900D might be a full 18pax but not a full 777 pax count. There is a lot of trial and error but it is slowly starting to make sense.

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joefremont
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Re: Huge Income loss on Some flights

Post by joefremont » Mon Aug 11, 2008 8:53 pm

The idea is to prevent airlines from doing short flights with very large aircraft. A 50nm flight has a base limitation of 110 passengers, a 1900D carries less than that so there would not be restricted. A B777 carries much more than that so it would be restricted.
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