MENU

Stock exchange / AGEX

Markets & Stock exchanges

This is again a feature that has unfortunately been curbed on newer game worlds. I personally find this especially for more experienced players a very interesting and challenging part of the game. Starting with Hoover, newer game worlds no longer have the ability to go public with your airline and trade shares with other players, let alone take-over airlines in other markets.

You can get into the Markets & Exchanges page via the management menu.

The market page has a few different sections. On the top part you will see two graphs. One is the AirlineSim Global Economic Index (AGEX). See below for some details about that. The other graph shows the development of the fuel price. This fuel price pretty much follows real time fuel prices and is updated more or less regularly. Select an area below to zoom in on the upper graph.

There are various different stock exchanges. It simply organizes the companies into regions, it is not really relevant to which stock exchange a company is assigned to. Each region also has an index, but again, these are quite irrelevant.

The Top and Flop 5 are somewhat more interesting, as it shows which companies are generally doing better than others. Yet again, the values depend totally on the way the stock price is calculated (see below), and thus fluctuates heavily with some underlying events that you can hardly influence. So use these with caution.

If you plan to invest in shares, keep an eye on the Latest orders section at the bottom of the page. Here you will see shares requested and offered. Unfortunately there is no market maker and therefore the shares are VERY illiquid and you might be stuck with shares for a long time in case you might want to sell it. You simply might not find a buyer.

Trade shares

So, you want to buy some shares? Click on an airline stock symbol and you will get to the stock page of that airline. The top part shows the share price development in graphical format. Next to it, you see some high level data about the share. In this case, there were some trades above the market value and thus the graph shows these kind of outliers to AS$ 40,000. You can trade shares up to +/- 10% of the current share price.

Below the graph, you will see the ownership of the airline, down to the last share. You can also see the dividend information. The facts and figures publish high level financial KPIs to help you decide if you should invest in that company. You can also see the last 10 trades of that share.

So let's assume you want to invest in some shares. In order to trade shares, you have to trade at least AS$ 10,000 of value. Any total value below AS$ 10,000 is not accepted. Then if you enter the amounts, make sure you use the decimal point "." and not the comma "," or it will trigger an error. Any existing offer or request will show just below the last trades.

To buy, enter the number of shares and the price per share on the left hand side and hit the "place buy order" button. Selling shares that you own is possible using the two fields on the right hand side. Once you entered an order, it will be processed every 15 minutes in a batch. The stock trader batch is scheduled to run every 15 minutes. You can check that via looking at the Game Status page (follow the link at the bottom of each page). If there is a matching offer/request for shares the shares will be traded.

As explained above, if you want to sell your shares, but nobody is interested in buying them (let's say cause the company is making heavy losses), then you will be stuck with the shares. AS does not buy back any shares. AS will take over share that a company has held and went bankrupt, but it immediately offers them on the market at market value.

IPOs

Two weeks after founding your airline as a subsidiary, you can initiate an IPO. An IPO is the Initial Public Offering and basically means that your company is increasing the share capital by 25% and offering these shares to other players (the public). That means, you will get 25% of your current equity as a cash injection into your airline. This is a ONE time benefit and the value depends on the equity of your airline at that moment.

You can find a link on the dashboard to get to the Corporate Finance page where you can initiate the IPO. Or go there directly via the Management - Corporate Finance menu.

Define a stock symbol and hit the button. There's not really much to it. Once an IPO is initiated, it will have a visible link on the markets page (see above the IPO of the company SKYglobal). If you follow that link, you will see the following page.

Subscribing to an IPO will cost you AS$ 100 per share subscribed. You can subscribe a maximum of one third of the shares offered with one company.

If enough shares are subscribed to, the IPO will be a success at the end of the three day period after starting it. The shares will then automatically show up on the markets page.

Be warned

Please also be aware that an IPO is hardly ever a good thing to do. While you will get some additional money with the IPO, the cash inflow is a one time event only. After that, your company will distribute 15% of all future profits made to their shareholders. Yes, you can get some money from your airline to your holding company. But this is fixed to 15% and you will no longer be able to transfer more money out to your holding. When you are a private company, you do have the possibility to transfer assets back and forth freely.

Also, there is no going private. Once you are public, you are so for the rest of the duration of your airline, restricted to all the limitations that brings along.

Why bother then?

There are a few times when an IPO does make sense. One very good reason is explained a bit further down in the section "Take-over of airlines".

Calculation of share price

The share price ALWAYS reflects the exact value (i.e. equity) of the company. There is no speculation part or expected value in the share price as in real life.

The market value of an airline is always the sum of the equity of the airline. The share price then is the market value divided by the number of shares issued. The share price is calculated once a day and is then published. This is the price visible on this page (in this case it is AS$ 38,433.15. Now any kinds of profits or losses that the airlines makes throughout the day will influence the share price directly. Therefore the +/- 10% margin is not necessarily fixed to the stated, current share price.

AGEX

The AirlineSim Global Economic Index (AGEX) is a global indicator to show how the overall demand is developing on the server. It does work a bit like economic cycles, slowing down the whole economy or growing it and increasing demand overall.

While the idea is pretty good, it is very static. It is usually on a high level in winter (the exact opposite of real life) and at a low in summer. And since the fuel prices follow real life values, you can end up with a low AGEX and high fuel price like we had during the writing of this tutorial. On the plus side, it makes a few airlines struggle in low AGEX periods and it might free up some server space every now and then.

Take-over of airlines

The beauty of the stock market is when you can take-over an airline in another market and get traffic rights in that market with the help of some companies in that country. Yes, you read correctly. You can acquire traffic rigths in a foreign, restricted country using a public airline. So, how is that possible?

The traffic rights of an airline are normally determined by the country it is founded in, or in case of a subsidiary, the country of its parent company. When you go public, the majority ownership of a company can shift as you trade shares. So here comes the mechanic that allows you to manage a company in another market.

Let's assume, there is Joe owning a holding company in the EU. The airline is founded in Germany. This company opens up a subsidiary in Morocco. As Morocco is not an investment-open country, the airline would only have traffic rights for cargo flights, or could fly passengers in the EU and to/from Germany to the outside of the EU. If this Subsidiary A goes public, shares can be traded freely. Let's assume, Joe is selling shares of Subsidiary A to his two friends that both operate in the US. Jack and Frank both have an active airline in the US and each of them is buying 30% of the shares of Subsidiary A. We now have 40% owned by a German company and 60% owned by two US companies. So 60% is more than 40%, therefore the traffic rights of the US are granted to Subsidiary A (It is not necessary that more than 50% are owned to grant traffic rights. It is simply the highest percentage of all owners).

Since Joe owns 40% of Subsidiary A, he is the one player that owns the single biggest stake in the airline, and therefore Joe stays the manager of the airline.

So, the shareholder holding most shares with a single company is the manager of a public company. The company gets the traffic rights of the biggest sum of home countries of its shareholders.

In order to be "legal" in Airlinesim, the two companies that provide the traffic rights to another, foreign airline must be active airlines (simple holdings is not sufficient). In case of European airlines, these must be from the same country and the traffic rights are then granted from that country. There's no strict guideline of how big the airline has to be, but I would assume anything with at least 20 normal aircraft (not just LETs) should be sufficient.