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The Joys Of Starting A New Airline  
User currently offlineMSYtristar From , joined Dec 1969, posts, RR:
Posted (11 years 2 months 2 weeks 2 hours ago) and read 3696 times:

Here's an article found in today's Times Picayune regarding this new airline and its struggles to get off the ground. Interesting stuff.



WILL IT FLY? WILL IT FLY?

Despite a $600,000 state grant, Trans Caribbean Airways is still struggling to get off the ground, its April start put off until October


Tuesday September 16, 2003


By Crystal Bolner
Business writer

A new airline that promised to begin offering six-days-a-week service between New Orleans and the Caribbean earlier this year still doesn't have the planes it needs to operate the proposed route.

Trans Caribbean Airways, which had planned to begin service in April, was given a $600,000 grant by the state to finance worker training. Much of that money has been spent -- some of it on job training for individuals who aren't even official employees of Trans Caribbean -- but the airline is still trying to recruit investors, lease airplanes and obtain federal certifications, said Al Menconi, chief executive of the airline. The delays likely will keep the airline grounded until October, Menconi said.


The airline is planning direct flights from New Orleans to St. Maarten-St. Martin and Curacao, where the company has its headquarters. The airline said it hopes to expand service to Brussels, Belgium, build a reservations center in Baton Rouge and possibly lease a 15,000-square-foot cargo service center in New Orleans.

The state's contract with Trans Caribbean requires the company to create 62 jobs in its first year of operation and an additional 100 jobs in its second year, said Sandy Deslatte, an Economic Development Department spokeswoman. The company's original business plan estimated it would have a total payroll between $2 million to $3 million per year, she said.

Regulations require the money the company receives through the state's work-force development program be spent on worker training and not facilities or startup costs.

But while Trans Caribbean already has spent $500,000 of the state grant, the airline now employs only 30 to 40 people, most of whom are unpaid.

The state said it has faith that Trans Caribbean will take flight.

"We are investing the taxpayers' dollars. We take that very seriously. We don't willy-nilly invest in every proposal that comes before us," said Don Hutchinson, secretary of the Economic Development Department.

Hutchinson said state officials closely scrutinized Trans Caribbean's business plan before investing the money. Trans Caribbean said it has shown good faith in its deals, and that it has as much to lose if the business fails.

State taxpayers aren't footing the entire bill for training the workers. The company is picking up the balance of any expenses not covered by the grant, Menconi said. So far, the state money has been used to train workers in airline accounting, ticketing, customer service and general computer use.

Of the 30 to 40 workers now employed by Trans Caribbean, a handful are in Baton Rouge, while others work in the Dutch Antilles and Europe. However, most positions are unpaid and the workers either have second jobs or are relying on their savings until the airline begins flights, Menconi said. Some are people identified by the airline as being likely future job candidates.

"While they were waiting for Trans Caribbean to start flying, some took other jobs. Some might be working for competitors or somewhere else, but hopefully those people still intend to work with Trans Caribbean in the future," Deslatte said.

The airline has faced delays not just in hiring but also securing the facilities for the small startup. New Orleans airport officials said they have met with Trans Caribbean officials about the airline's operation plans, showing them ticket counter and office space for their flight crews, but rental negotiations have not occurred.

"We're waiting on TCA to finalize all of their plans. There's nothing left for us to do until they get their planes and financing together. We're waiting on them," said Michelle Duffourc, a Louis Armstrong International Airport spokeswoman.

Airport and state officials said they are unsurprised by the delays, given the complexity of the task.

"Starting a new airline is difficult. Starting a new airline that's going to provide international service is even more difficult. Starting an airline in Louisiana -- well now, that's the most difficult of all," said Anthony Marino, aviation director at the Baton Rouge Metropolitan Airport, which is leasing office space to Trans Caribbean in Baton Rouge.

Marino said he was initially worried Trans Caribbean would fail financially and wouldn't be able to pay its rent. But so far those worries have proved unfounded. The company has been paying its rent on time, he said.

Trans Caribbean is still in the process of securing leases on four new Airbus A321 and A340 planes and getting federal flight certification in the United States, St. Martin and Curacao.

A Federal Aviation Administration spokesman said delays in getting flight certification are not uncommon for a new airline. Certification can take many months or more than a year, depending on the company's organization, said Roland Herwig, spokesman for the FAA's southwest region.

"I would say most often, it's probably a learning experience for the people who are starting the carrier," Herwig said. "Perhaps there are some things they haven't considered before starting."

Menconi, who is the former owner of a transportation consulting firm and once worked in management at TWA, Seaboard World and Pan American airlines, said he has been seeking investors to help finance the airline.

Menconi said he originally expected to spend about $7 million to get the air service up and running, but expenses ballooned to about $100 million when the company decided it would lease four planes instead of two.

"I've been cautious about how to do things. If I would have done things the way we had laid out in our original business plan, the way the market went, we would have been closed already," Menconi said.

With the entire airline industry experiencing a financial crisis and major carriers such as United Airlines filing for bankruptcy, Menconi admits these aren't the best of times to be getting into the business or looking for investors.

"To find a venture capitalist, you don't go in the Yellow Pages. You're out there practically begging. But all of a sudden now I've had a flood of calls and I'm having to practically turn people down," said Menconi.



Steve in New Orleans








13 replies: All unread, jump to last
 
User currently offlineBoingGoingGone From , joined Dec 1969, posts, RR:
Reply 1, posted (11 years 2 months 2 weeks 1 hour ago) and read 3584 times:

Considering startup costs for ACJet approached $4 million, one has to wonder if $600K was enough money to begin with.

User currently offlineHockey55dude From United States of America, joined Jul 2003, 213 posts, RR: 2
Reply 2, posted (11 years 2 months 2 weeks 1 hour ago) and read 3582 times:

wow thats amazing. do you think it will goto the west coast?

User currently offlinePanaman From United States of America, joined Sep 1999, 439 posts, RR: 0
Reply 3, posted (11 years 2 months 2 weeks 1 hour ago) and read 3550 times:

Hockey55dude,

I can't even get out of msy, what makes you think it will fly to the west coast.


Steve,

Ok Im sitting here at work and just had to post something for you...




Sorry I moved from SXM, looking for a new house on Anguilla now!
User currently offlineJayDavis From United States of America, joined Jan 2001, 2000 posts, RR: 15
Reply 4, posted (11 years 2 months 2 weeks ago) and read 3499 times:

I just can't see an airline starting up in Louisiana, Steve, I'm sorry. Especially to the Caribbean and to Europe? To me, that just doesn't make any sense, yet I don't live in the area.

Maybe you can enlighten us with how this airline is supposed to make it?

Thanks!


Jay



User currently offlineJayDavis From United States of America, joined Jan 2001, 2000 posts, RR: 15
Reply 5, posted (11 years 2 months 1 week 6 days 16 hours ago) and read 3353 times:

Does this airline even have a web presence, yet?

Just curious.




User currently offlineMSYtristar From , joined Dec 1969, posts, RR:
Reply 6, posted (11 years 2 months 1 week 6 days 14 hours ago) and read 3259 times:

www.flytca.com is the airline's web address

User currently offlineMSYtristar From , joined Dec 1969, posts, RR:
Reply 7, posted (11 years 2 months 1 week 6 days 13 hours ago) and read 3212 times:

Thanks Mary...I was wondering when you'd post something  Smile

TCA would be a welcome addition here, and as long as they don't get too aggressive, they could easily become very successful.

Steve in MSY


User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 8, posted (11 years 2 months 1 week 6 days 12 hours ago) and read 3149 times:

As much as I'd like to continue supporting TCA; having personally witnessed the [in]operation of their "reservations office" and now the prospect of them flying [#@$%^&!] A340s.... sorry Steve-o my man, but no sympathy here  Sad

*sigh*


User currently offlineJayDavis From United States of America, joined Jan 2001, 2000 posts, RR: 15
Reply 9, posted (11 years 2 months 1 week 6 days 12 hours ago) and read 3125 times:

Steve,

I just don't think MSY is that large of a city to support an airline based there. Didn't Pride Air hub out of MSY and it was a flop.

Tell me more about it, if you know anything.......


Jay


User currently offlineMSYtristar From , joined Dec 1969, posts, RR:
Reply 10, posted (11 years 2 months 1 week 6 days 11 hours ago) and read 3095 times:

Well, TCA is "planning" on only flying a few Caribbean routes from New Orleans. Nonstop to SXM continuing to CUR six times per week. That could easily work. Yearly charter flights to Cancun and Montego Bay are extremely popular from here, so this is almost a sure bet. Most of the Caribbean connections from New Orleans currently have to go through MIA on American. This would make travel to the region easier to say the least. I don't think they are planning on making MSY a huge hub or anything, just some point-to-point routes. Good strategy in my opinion.

So even though no one knows if TCA will indeed start flying, if they do by some chance, they should be well-received by a city that is positioning itself (thanks to the dedication of our fine mayor) to once again be a major player in the Central America/Caribbean/Mexico market.


As for Pride Air, yeah, they didn't last too long. Two big reasons for that in my view. 1) They started operations in 1984. Besides the World's Fair, that was a terrible year for New Orleans as far as business is concerned. The city was in the last stages of the oil bust. The economy was not in the best shape to say the least at that time. 2) Lack of local marketing. From what i'm told, not many people knew about them. And the people that did probably just said "hell we might as well fly Delta to L.A at least they are reputable!" Delta had a very large prescence here at the time with a fierce local following, as did Eastern...and of course Pride Air competed with these carriers on some routes.




Steve in MSY



User currently offlineJayDavis From United States of America, joined Jan 2001, 2000 posts, RR: 15
Reply 11, posted (11 years 2 months 1 week 5 days 22 hours ago) and read 3034 times:

Thanks for the updates and info Steve.

Does Taca still fly out of MSY? I flew them down to Belize about 12 years ago. That 737 took up the entire runway almost on that very hot day we left MSY !!

I cover MSY with my job at Korean Air. I couldn't get over how big of an operation WN has at MSY these days !!

Sadly, DL has TOTALLY fallen off the map at MSY. If I remember correctly, DL used to fly L-1011's between DFW and MSY a few years ago. Now it is served by a CRJ-700 series.......sad really......


Jay


User currently offlineN951U From , joined Dec 1969, posts, RR:
Reply 12, posted (11 years 2 months 1 week 5 days 22 hours ago) and read 3024 times:

I'm just happy I'm not paying tax money to Louisiana just to have it squandered.

User currently offlineJayDavis From United States of America, joined Jan 2001, 2000 posts, RR: 15
Reply 13, posted (11 years 2 months 1 week 5 days 22 hours ago) and read 3014 times:

You would think from all that I've read on the airline so far, the State of Louisiana "has" done their homework on it? Maybe not. I've heard so many stories about Louisiana politics throughout the years and all the crooks that have ran the government over there, maybe it is all a sham?




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