Airline Strategy - Hub Purchasing Strategy

Buying a hub is very important decision to make. They are expensive but a necessary evil to grow your airline.
This strategy guide will support you for your entire AM2 journey, from the initial hub, circuit purchasing, when adding new circuits, when buying a new hub while maximizing your return on investment.



Best Starting Hubs

Choosing your initial starting hub can be tricky; but it should be easy.
The problem is when you first dive into the game, it is premature (knowledge-wise) to conciously pick the right hub, due to the unawareness of the game mechanic.

To make it simple, the first hub is *FREE*.
It does make sense to choose an expensive hub, or the most expensive one.

Most players would recommend MPM (Africa -> Mozambique -> "MPM - Maputo") as a starting hub.
It is indeed one of the best hub to start. It has enormous capacity, and can hold over 100 circuits.

If you prefer to not follow this usual "go-to" recommendation, these are very good alternative options: KAN, ABV, LOS, or ISB.


Cheap or Premium hubs?

Beside your "free initial hub", should you by a cheap hub, like 'ASK' in Ivory Cost, Africa; or a premium hub such as PEK in China?

From the game machanics section, a route from A to B has the same passenger demand as from B to A.
Therefore, you can buy the hub "ASK" and fly to "PEK"; or buy "PEK" and fly to "ASK". You will have the same number of passengers.

Buying a premium hub actually hurts in two ways:
1) A premium hub is much more expensive than a cheap econonmy hub.
It cost you much more... to have the same demand after all?
The exception would be to fly from a premium hub to another premium hub (example: PEK -> LAX).
However, this brings less incomes because they have higher demand in business and first class.
As per the game mechanics, you rather want more economy passengers. [READ GAME MECHANIC PASSENGERS]

2) More you spend on the hub, less money you have for planes.
Remember, the planes bring you the income.
Yes, you need hubs; yes, you need routes; but it's the plane that bring the money.
You actually want to spend as little as possible on hubs and routes; in order to spend more on planes.

3) ??? there was something more important than point 2 to make? ???



Maximising Subsidies
Maximising Subsidies. Subsidies are available for hubs and routes to help you going at the early stage of the game.
They give you a discounts on hubs, and routes; so you can buy them at a cheaper price.

However this usually comes as an unexpected catch. You buy a few routes that seem cheap, and quickly you realize that the next route is like $300M.
How that happened?

As you keep buying routes - and hubs, the subsidies are reducing. This is proportional to the price of the route (and hub).
More expensive it was, more subsidies it was; therefore, less are avaiable.

The best way to maximize your subsidies is to buy the "cheapest item" first, and moving towards the most expensive (last)

Second, as a final note, it sorts of make sense to do that this way Why spending 2 billion on a "premium hub", like "PEK" in China; and only implementing 2 circuits?



Buying a new circuit or a new hub?

This is a fundamental and very important question: Should I buy/build a new cuircuit on a existing hub, or buy a new hub a build the new circuit there?

Note: if you are not familiar with circuit, have a look over there: Circuit Strategy

The very simplistic - rule of thumb - is the following:
1) Buy one hub,
2) create 2 circuits (6 or 7 routes each, so a total of 12 to 14 routes);
3) Repeat

Let's break down this rule of thumb to understand the rational, and then we will formalize the actual (real) rule.

The whole point is about maximizing your "return on investment" (ROI). In this case, minimizing your expenses (cost of hub and routes) in order to maximize your income.
Less you spend (on hubs and routes), more you can invest on the planes to bring you the income.

Route and Circuit Cost

Lets have a look at route costs.
When you have a brand new hub, this comes with subsidies on routes.
The discound you get gradually reduces as you purchase routes, until there is no more discounts.
Instead of looking at individual routes, lets consider group of routes (or "circuit").

Assuming circuit of 6 or 7 routes:
- The first circuit with full discounts should cost about $ 160M
- The second circuit would cost around $ 500M
- The third circuit has very little discounts, and should cost around: $ 1200M
- Any extra circuits wont have any discounts would be around: $ 1500M to 1800M

Looking at the price of hubs, they also have subsidies.
- The first hub is free (see Best Starting Hub on this page).
- The second hub could be as cheap as 220M (Ivory Cost, ASK)
- The third hub could be as cheap as 238M (Namibia, KMP)
- The fourth hub could be as cheap as 242M (Togo, LRL)
- (...)
- A full price hub can easily be 2000M.

Practical Example
Finally, lets look at a practical example.

First Circuit:
You got your first hub for free.
Building a circuit on this hub would cost ~160M.
Building a circuit on another hub would cost 220M for the cheapest hub(ASK) plus 160M for the circuit itself = 380M.
Here is make no sense to buy another hub, lets build the first circuit on your initial hub.

Second Circuit:
Adding a second circuit on your (free) initial hub would cost 500M.
Buying the cheapest hub available (ASK) for 220M + 160M for the circuit itself = 380M.
Therefore, we should buy a new hub (ASK) and build the circuit there.

Third Circuit:
Adding a 2nd circuit on your initial hub = 500M;
Adding a 2nd circuit on your 2nd hub(ASK) = 500M;
Buying the cheapest hub available (KMP) for 238M + initial circuit at 160M = 398M
Therefore, we should buy another hub (KMP) and build the circuit there.

Gradually, the price of the "next cheapest available hub" will increase.
You continue to do so until you reach a point where the price if the next hub + first circuit(160M) exceed 500M.
Then it make sense to add a 2nd circuit on all your existing hubs.

When all your existing hubs have 2 circuits, the question would be when to add a 3rd circuit (1200M) vs buying a new hub.
For a long while, you will then buy a new hub, and build 2 circuits, until the price a hubs after discounts get above 1200M.
Only at that point, you can add a 3rd circuits on all your existing hubs; and proceed with a new hub + 3 circuits.

Finally, when price a new hub exceed ~1800M, then you a free to add as many circuits (as it make sense considering the circuit turnover itself) on all your existing hubs; before adding new hubs.

Summary of the rule
To summarize:

1) As long as you can find a hub cheaper than ~350M, buy a new hub and ONE circuit on this hub.
2) When hubs are more expensive than 350M, add a 2nd circuits on all existing hubs.
3) Then buy hubs and create 2 circuits on them until price of hubs are more than 1200M.
4) When hub prices exceed 1200M, add a 3rd circuits on all existing hubs.
5) Then buy hubs and create 3 circuits on them until price of hubs are more than 1800M.
6) When hub prices exceed 1800M, consume the remaining routes with "good capacity" on all your existing hubs
7) Finally, you can buy whatever hubs you want and create as many circuits as you want on them.

Last Note

As a last note, take these numbers as a good guidance, although not perfect.
In reality, it is best to calculate the actual cost of the "next circuit" you can build, and assess with real number where it makes most sense to build it.



The Africa Strategy

This section is sort of the normal outcome when you combine all the point listed above on this page.

Africa has the most perfect distribution of passengers: a lot in economy, very little in business, closed to zero in first class.
This allows planes to have most or even all seats in economy, bringing you more incomes.
Even as 1 bronze, you can find routes in africa with 2000 passangers. There is a of demand in there.
As 5 gold star and fully developped airline, capacity can get over 8000 econony passengers!

When you consider the price of hub (premium hub vs economy hub), then it makes sense to buy the hub in africa, instead of in asia for instance.
It is cheaper, and you get the same passenger demand.

This leads to the best starting hub, taking for example MPM, in Africa.
Following the subsidise, buying the cheapest hub (ASK) in Africa, makes most sense.
Just continuing so for all african hubs can lead you straight in the top 300 players.

Summary of the Africa Strategy
1) Take the most expensive hub in africa as your starting hub (MPM). See alternative here if you want to.
2) Proceed with the "Buying a new circuit or a new hub" strategy buy always taking the cheapest available hub in africa
3) Continue so until you own all hubs in africa for your plane(s) category(ies).


Final thought
This may seen as a very short section - and it is indeed. But it is built on all the previous blocks and strategies previously listed.
It is by far the most optimal way to grow rapidely your airline in AM2.

- MT