Aviation: airports, markets and subsidies

The one-minute explanation

There is no such thing as an airline route you own. What you create is an airport-pair market: a single, bidirectional relationship between two physical airports. Both directions belong to one market, no airline owns it, and demand may use it directly or as one leg of a longer journey.

Into that market you place a schedule request, measured in whole weekly round trips. What actually flies is usually less than what you requested, because four things can cut it—and knowing which one is cutting is most of the skill in operating aviation.

Airports and the movement budget

Airports come in three grades—feeder, regional and hub—each requiring a larger population and offering a larger daily allowance of aircraft movements. Upgrading costs 80% of the difference between the grades’ build costs. Exact costs, movement allowances and population minimums are in Transport mode parameters.

The movement budget is the constraint that surprises people. One daily round trip consumes two movements at each endpoint—a departure and an arrival. Every market touching an airport draws from that same daily budget.

When an airport is oversubscribed, the game does not refuse the newest market or serve the oldest first. It scales every market at that airport down proportionally until the total fits. Opening a new market at a busy airport therefore quietly shrinks the ones already there. The remedy is not to close something—it is to upgrade the airport.

Six buckets, one market

A market’s schedule is not a single number. It is six independent requests:

All six are entered in whole weekly round trips. Two rules shape what they deliver:

• The aircraft gauge follows the lower of the two endpoint grades. A hub connected to a feeder flies feeder-sized aircraft. Upgrading one end of a thin market changes nothing until the other end follows.
• Mixed flights count in both figures. They appear in the passenger frequency and the cargo frequency, because they genuinely carry both.

From request to what flies

Every month the request passes through four filters, in this order:

1. The quarterly review may reduce the commercial passenger request—see below.
2. Suspension or a missing airport zeroes the whole market.
3. The transport fund trims the subsidized buckets to what you can afford.
4. The airport movement budget scales everything that remains, proportionally, at both endpoints.

Because the fund trim happens before the movement allocation, money cannot buy a way past a capacity problem. A movement-starved market stays starved no matter how large the subsidy—only an upgrade helps.

Schedule changes apply from the following month; until then the market shows as pending settlement.

Commercial service and the quarterly review

Commercial buckets fly only while the private operator can bear them. Fares, aircraft costs and margins are the airlines’ own; the public account sees none of it, receiving instead a flat charge per completed air journey.

Load factor is the operating signal, measured separately for each direction. The healthy band is roughly 62% to 88%. Below it, you are flying empty seats; above it, willing passengers are being left behind. The panel colours the figure so an unbalanced market is visible at a glance—a market can easily run full one way and half-empty the other.

Every market carries its own review clock, three months long. When it comes due:

• If the commercial passenger service is at least breaking even, the request is retained unchanged.
• If it is losing money, the request is cut—by a quarter, or one weekly round trip, whichever is larger.
• It is never increased automatically. Growth is always your decision.

Two details matter. The review touches only the commercial passenger bucket—mixed, cargo and every subsidized bucket are left alone. And a cut rewrites your stored request: the number you originally typed is gone, not merely overridden for a month. A market you leave unprofitable will quietly shrink toward nothing.

The panel offers a schedule recommendation that can suggest growth when a market is above the load band with unmet demand—but it only ever suggests. Nothing raises a request except you.

Government-subsidized service

Subsidy is how a nation runs the service its market will not. It is precise rather than generous: for each subsidized bucket, the public pays exactly the private shortfall—the amount by which that bucket loses money—and nothing more.

The schedule editor quotes the required monthly support live as you type, one figure per subsidized bucket. Applying the request stores those quotes as caps.

When a request costs more than the fund can bear, it is trimmed, not rejected: the game removes one weekly round trip at a time—from the bucket exceeding its own cap, or otherwise from the most expensive one—until the request is affordable, possibly reaching zero. You will see the reduced schedule rather than an error.

Subsidized and commercial buckets coexist in the same market and share the same aircraft gauge, so the natural lifecycle is to seed a thin route with subsidized round trips and migrate them into the commercial buckets as demand and fares mature.

Use subsidy for strategically important thin markets—the connection a province needs but no airline wants. Do not use it to paper over a capacity problem; as described above, that money cannot reach the runway.

Hubs and transfer journeys

Passengers do not only fly point to point. A journey may use two markets in sequence, connecting through a hub—and only grade-3 hub airports can host such connections.

Three consequences worth planning around:

• A transfer journey’s capacity is the smaller of the two legs, and its cost is the sum of them. A thin feeder throttles everything routed behind it.
• Connection time depends on how often the two legs fly. Frequent services connect in little over an hour; sparse ones can wait most of a day. Frequency, not just capacity, is what makes a hub work.
• The public per-journey charge is collected once per journey, not once per flight. Transfers do not multiply public revenue.

Building a hub therefore changes the network’s shape, not just one airport’s capacity: it lets thin regional markets reach each other through it.

Suspending a market

Suspension stops a market without deleting it. While suspended it consumes no movements—which immediately frees budget for the other markets at both airports—publishes no options to travellers, requests no subsidy, and skips its quarterly review, so your stored schedule is preserved intact for resumption.

What does not stop: airport maintenance and depreciation, which belong to the airport rather than the market.

Suspension is the right tool for a seasonal or strategic pause. Closing the market removes it entirely.

Operating well

1. Read the requested-versus-executable line first. If they match, your problem is demand, not capacity. If they do not, find which filter is cutting.
2. Check both directions. A market averaging a healthy load can be full outbound and near-empty inbound; the fix is frequency or gauge, not price.
3. Watch for silent shrinkage. A commercial market losing money is being cut every quarter. Either accept the smaller service, make it viable, or move those round trips to a subsidized bucket deliberately.
4. Upgrade before opening. At a busy airport, a new market takes its capacity from the existing ones. Check the airport’s used capacity before adding.
5. Match the gauge. Upgrading a hub does nothing for markets whose other end is a feeder.

Common misconceptions

“I run an airline”

You run airports and authorize service. Aircraft, fares and airline profits are private; your public levers are grades, movements, schedule requests and subsidies.

“A bigger subsidy will get more flights”

Only if money was the constraint. The fund trim runs before the movement allocation, so a market limited by airport capacity ignores extra money entirely.

“The subsidy cap is what I pay each month”

It is the ceiling. The payment is the actual shortfall, which can be less—and is zero when the service pays for itself.

“My schedule is what I set”

Not for commercial passenger service. An unprofitable request is cut at every quarterly review, permanently, and only you can raise it again.

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