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How To Start An Airline  
User currently offlineWGW2707 From United States of America, joined Aug 2003, 1197 posts, RR: 34
Posted (11 years 1 month 1 week 3 days 12 hours ago) and read 40250 times:

I have some questions about the process for starting an airline. Aside from the obvious costs associated with purchasing a fleet, hiring staff, et cetera, what legal proceedures have to be carried out in order to get the airline into business? What licenses, credentials, et cetera, are required, and how much (and how long) does it take to get them? What qualifications are needed by the airline executives, and what management positions does the airline have to fill to begin operation? Finally, aside from the purchase of aircraft, slots, et cetera and the hiring of employees, how much does it typically cost, overall, to start a new airline (in terms of the administrative and legal costs, et cetera)?

I would be very much obliged for some insight into this. The purchase of aircraft alone is exceedingly complex, requiring acceptance teams, certification, license-transfering and tense business meetings, and I imagine that starting a new airline is even more complex.

-WGW2707

51 replies: All unread, showing first 25:
 
User currently offlineMD11Lover From Switzerland, joined Oct 2003, 444 posts, RR: 0
Reply 1, posted (11 years 1 month 1 week 3 days 11 hours ago) and read 35271 times:


I would also like some insight on this. A dream of mine (amongst many) is to start an airline operating in the Caribbean.

Ces


User currently offlineBirdwatching From Germany, joined Sep 2003, 3830 posts, RR: 51
Reply 2, posted (11 years 1 month 1 week 3 days 10 hours ago) and read 35150 times:

You guys should wait a couple of years, right now it seems that your chances of succeeding are rather small...

Anyway, if you want to start an airline, why not do it with a bunch of people here at a.net? Somebody could come up with the livery, somebody would consider which routes and which airplanes should be considered, etc.

There is so much knowledge / enthusiasm in this place!

I bet you some people in this forum would be pilots / FAs for free.

Airliners.net Airlines! How do you like that!

Count me in, im with you.

Maybe as the CEO?  Big thumbs up Just kidding



All the things you probably hate about travelling are warm reminders that I'm home
User currently offlineJeffM From United States of America, joined May 2005, 3266 posts, RR: 51
Reply 3, posted (11 years 1 month 1 week 3 days 10 hours ago) and read 35094 times:

It's like the old saying....

If you have to ask.........


User currently offlineAIR757200 From United States of America, joined Jul 2000, 1579 posts, RR: 7
Reply 4, posted (11 years 1 month 1 week 3 days 9 hours ago) and read 35072 times:


Airliners.net Airlines! How do you like that!

Oh god I can see it now...

All even numbered flights will operate as a "LCC". All odd numbered flights will operate as a "major".

Just imagine if we mixed the flight crews.. "You make $47,000 a year? But I only make $27,000 a year!"


User currently offlineFlying-Tiger From Germany, joined Aug 1999, 4166 posts, RR: 36
Reply 5, posted (11 years 1 month 1 week 3 days 9 hours ago) and read 35028 times:

Depends on the kind of airline you wanna start. Charter is a bit easier to set up compared to a schedduled carrier as you do not need to apply for route licences.

Staff needs to be certified to whatever your country´ aviation authority´s guidelines are. Director FlightOps, Director Training, Director Ground Ops...

Costs will vary from next to nothing (as you´re setting up a new company as a subsidary of an already existing one) into the multi-million range- but nobody ever will really disclose how much money has been spend to get airborne.

Regards
Flying-Tiger
http://fly.to/rorders



Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
User currently offlineWGW2707 From United States of America, joined Aug 2003, 1197 posts, RR: 34
Reply 6, posted (11 years 1 month 1 week 3 days 9 hours ago) and read 35013 times:

I am, like MD11, seriously considering founding an airline, in my instance, in the midwestern United States, at STL and MCI to be precise. I asked these questions on the required legal proceedures neccessary to start an airline in all seriousness, and would like to welcome those who have knowledge of these proceedures to share their wisdom with us.

I would like to thank Flying_Tigers, btw, for his excellent reply. Would any of you happen to know the specific licensing requirements for starting a scheduled carrier in the United States? Is it the same throughout the country, or are their variations from state to state?

-WGW2707

[Edited 2003-10-20 07:05:17]

User currently offlineXFSUgimpLB41X From United States of America, joined Aug 2000, 4224 posts, RR: 37
Reply 7, posted (11 years 1 month 1 week 3 days 7 hours ago) and read 34937 times:

Try contacting your area FAA flight standards district office (FSDO).... look under FAR part 121 too...


Chicks dig winglets.
User currently offlineAndrewUber From United States of America, joined Jul 2003, 2528 posts, RR: 40
Reply 8, posted (11 years 1 month 1 week 3 days 7 hours ago) and read 34918 times:

I've thought about it myself. I currently own a company that does airside services for the airlines, and I might be able to put something small together.

Then I look at my current insurance, and my stomach begins to hurt. Just to get onboard passenger jets at a "Category X" airport, the airlines require me to have $10 million. Luckily, I've got a relationship with a larger company, and they are helping me out on the insurance. Otherwise, I was quoted about $60,000 per year, and I can't write a check that big (and have it clear, anyway). Please pass the Pepto...

Then you have to look at the operations of the airline. Scheduling, Reservations, Flight planning, weather, dispatch.... and let's not even THINK about maintenance. Spare engines, avionics, parts, - mechanics, an FAA service station certificate - OK ok ok I'm happy doing what I'm doing.

There is a small airline for sale on Barron Thomas's website - check it out. Here's a link - http://www.barronthomas.com/121.htm
For only $1.2 million, you can have a Part 121 airline in the Southwest. The airline operates Dash 7's, and I doubt any aircraft are included with the sale of the airline itself. You can buy the Dash 7 on his site - here's another link -http://www.barronthomas.com/d7.htm . It's going for about $1.5 million. If you've won the Powerball recently and want a fun project, this might just be up your alley.

As far as an Airliners.net airline - It's a great idea, but I doubt the screeners would hire ANYONE to fly our aircraft. They'd probably ground Chuck Yeager himself for "badscan" or something.... It would NEVER work!  Big grin

[Edited 2003-10-20 08:40:29]


I'd rather shoot BAD_MOTIVE
User currently offlineCfalk From , joined Dec 1969, posts, RR:
Reply 9, posted (11 years 1 month 1 week 3 days 7 hours ago) and read 34875 times:

I am reminded of an adage:

Q: How do you make a small fortune in the airline business?

A: First, you start with a large fortune...

Charles


User currently offlineAsianguy767 From Singapore, joined Oct 2003, 263 posts, RR: 0
Reply 10, posted (11 years 1 month 1 week 2 days 23 hours ago) and read 34792 times:

I believe you need an AOC (air operator's certificate) of which ur local aviation authority needs ur business plan including ur start up capital ur routes, aircraft. I would advise that you find someone who's been in the airline business for a while maybe some retired TWA executives. Or u could engage a law firm that specialises in aviation business. I would think if u want to start an airline with one aircraft (B737) on lease you would need say US$35million, which is a very conservative estimate, just to start up.

User currently offlineWGW2707 From United States of America, joined Aug 2003, 1197 posts, RR: 34
Reply 11, posted (11 years 1 month 1 week 2 days 7 hours ago) and read 34689 times:

I must thank you all for your advice. Also of course CFalk, your post was very witty  Smile It is one thing to start an airline, but another to succeed...

In the months ahead I will continue to do research on this topic. Perhaps if I am lucky the same author who penned the brilliant article in Airliners about the intricacies of aircraft acquisition will take this topic up next...

-WGW2707


User currently offlineBackfire From Germany, joined Oct 2006, 0 posts, RR: 0
Reply 12, posted (11 years 1 month 1 week 2 days 5 hours ago) and read 34630 times:

Just remember that startup airlines burn through cash at an astonishing rate, and that the main reason for new airlines failing is a complete underestimation of just how much capital is needed.

User currently offlineCessna172RG From United States of America, joined Aug 2000, 749 posts, RR: 0
Reply 13, posted (11 years 1 month 1 week 2 days 4 hours ago) and read 34573 times:

The ACC requires TONS of paperwork for it to be approved. They check your credit and finances, make sure that you can operate in the green (look at today's US carriers, almost all are in the red), and as mentioned it's a lot of work. If you are serious about starting an airline, you'd best hire some staff with experience.


Save the whales...for dinner!!!
User currently offlineRichardw From United Kingdom, joined May 2001, 3759 posts, RR: 0
Reply 14, posted (11 years 1 month 1 week 2 days 2 hours ago) and read 34492 times:

never announce your airline without a licence ref www.now-airlines.com

User currently offlineLuv2fly From United States of America, joined May 2003, 12148 posts, RR: 49
Reply 15, posted (11 years 1 month 1 week 2 days ago) and read 34400 times:
Support Airliners.net - become a First Class Member!

The start up capitol is something that you need more of than you think you do. Kinda like when you remodel the house always budget 30% more and add x number of extra days. Same goes for starting up an airline. Also I would look at starting as a charter and have others pay for your services at first. Then add scheduled service as you make more money. Tho if starting as a charter make sure you are a good charter airline to begin with. Have a clear business plan and most important stick with it, I am not saying do not be open to change, tho unlike the now majors stop trying to be all things to all people. by changing your core business, i.e. chasing LCC's


You can cut the irony with a knife
User currently offlineElwood64151 From United States of America, joined Feb 2002, 2477 posts, RR: 6
Reply 16, posted (11 years 1 month 1 week 1 day 23 hours ago) and read 34352 times:

WGW2707:

I'm still working out the kinks in that financial plan I set up for you. I am concerned about the cost of reservations systems, but I may have a lead on that (that was something not included in the plan I sent to you).

Luv2fly:

You're absolutely right. All start-up companies burn through cash at a remarkable rate. Having a large amount of money and a line-of-credit ahead of time are very important. I don't know that being a charter to start is quite necessary, as there may not be anyone needing the charter service. However, scheduled service to some select destinations that desperately need competition could be profitable for a new LCC.



Those who fail to learn history are doomed to repeat it in summer school.
User currently offlineAndrewuber From United States of America, joined Jul 2003, 2528 posts, RR: 40
Reply 17, posted (11 years 1 month 1 week 1 day 10 hours ago) and read 34268 times:

Elwood, WGW and Luv2fly -

I'd love to participate somehow in this process. I too am interested in either being involved in the startup of an airline, or someday running a small operation (charter or scheduled). As I mentioned earlier in the thread, I already own a company that performs services for airlines, and I could possibly help out quite a bit.

If you would ike to e-mail me, please do so at andrew8728@hotmail.com.

Thanks!

DREW



I'd rather shoot BAD_MOTIVE
User currently offlineLuv2fly From United States of America, joined May 2003, 12148 posts, RR: 49
Reply 18, posted (11 years 1 month 1 week 1 day 10 hours ago) and read 34244 times:
Support Airliners.net - become a First Class Member!

What about when first starting doing wet leases of the aircraft and crew to save cost and not having to acquire your own aircraft at first?


You can cut the irony with a knife
User currently offlineWGW2707 From United States of America, joined Aug 2003, 1197 posts, RR: 34
Reply 19, posted (11 years 1 month 1 week 1 day 10 hours ago) and read 34221 times:

Very interesting Andrew. I've been working with several users of this website on a proposal to launch a new airline in STL, to fill some of the void left by TWA's demise and to provide jobs for former TWA employees. There was a longish topic regarding the subject, "Should TWA be Revived as an STL based regional?. You might want to look it up in the search engine. It has been suggested by several people that if some users of this website worked together, they could start an airline.

-WGW2707


User currently offlineARGinMIA From Argentina, joined Nov 2001, 487 posts, RR: 5
Reply 20, posted (11 years 1 month 1 week 1 day 9 hours ago) and read 34212 times:

I'm advanced in some plans to start a VERY SMALL commuter airline in Argentina.. There is NO competition at all on any of the possible routes.. And the market size is almost guaranteed since there used to be an airline doing the routes (State owned.. As usual they had 3x the necessary employed and corruption so they closed) and I have their pax numbers.. My plan is to start with 2 small props.. (J32.. Or if things get a little bit better maybe a Saab 340)
so far I need around 200.000 US$ to start and to operate for some months...(not buying a single aircraft.. Just Lease).. The hard part is to get cash to start.. Banks are not giving money in Argentina.. Even with a HUGE collateral (10x of the needed money) Any ideas if someone from the US will invest in something so small? We forecast to be making around 10k US$ a month within the first 4 months with only 1 aircraft operating..



Alto.. Mucho mas alto.. hasta la cumbre
User currently offlineWGW2707 From United States of America, joined Aug 2003, 1197 posts, RR: 34
Reply 21, posted (11 years 1 month 1 week 1 day 8 hours ago) and read 34188 times:

ARGinMIA,

Have you thought about seeking Chilean investors? One possibility would be to work on starting an airline the USA, and if you're successful, take the money and enter the Argentine market.

Personally, I think what would be great would be a Montevideo, Uruguay based airline. It could become the Singapore Airlines of South America...

-WGW2707


User currently offlineFlying-Tiger From Germany, joined Aug 1999, 4166 posts, RR: 36
Reply 22, posted (11 years 1 month 1 week 1 day 8 hours ago) and read 34195 times:

Try to advertize at speednews.com or approach one of the lessors - they usually know where to organize financing for such a kind of start-up you are proposing.

Regardless what you´ve estimated so far - usually it is required by the aviation authorities that you have enough money in the bank to survive 90 days without any income whatsoever. Only if you can prove that this is possible the authorities might give you a green light onto this aspect.

Second aspect: usually a lessor will require a fully filed business plan including a bill which shows that you are financed until they start negotiations about a lease.

Plus: Do your pilots need line experience? If so, how many hours are required? Where can they get it? Where is the next place they can go into a simulator? How do you sell tickets? How do you do your crew training? Who is catering you?

Which equipment are you going to use? Where will it come from? Which are the specifications? How much will a refit/re-spray cost? etc etc etc

So several aspects which need to be considered.

Regards
Flying-Tiger
http://fly.to/rorders



Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
User currently offlineLanPeru From Peru, joined Jun 2001, 645 posts, RR: 9
Reply 23, posted (11 years 1 month 1 week 1 day 8 hours ago) and read 34155 times:

ARGinMIA:
-Hey I am also thinking of doing something like that. Contact me if you can, I would really like to know more.

-LanPeru


User currently offlineARGinMIA From Argentina, joined Nov 2001, 487 posts, RR: 5
Reply 24, posted (11 years 1 month 1 week 1 day 8 hours ago) and read 34136 times:

Well Uruguay and Chile are markets I dont have any info about.. I do know Argentina.. so moving the location is out of the question.. the 250.000 I forecast will last about 1 month without any other source of income..

Flying-Tiger so far im looking at the J31/32 do you have any idea on current lease prices?



Alto.. Mucho mas alto.. hasta la cumbre
25 WGW2707 : You can get EMB-120s relatively cheaply right now also. The US commuter lines are dumping them rapidly thanks to the new RJ. You should look into them
26 Post contains links Flying-Tiger : As you are obviously looking on 19-seaters here we go: Data from 2003 for a 3-5 year operating lease (US$): J31/32 15-20K 1900C 15-20K 1900D 26-32 K M
27 Andrewuber : Flying-Tiger, can you elaborate a little bit for us? I see your data from 2003 for the lease, does that mean you can get a Metro III for $10,000 to $1
28 ARGinMIA : Flying-Tiger, are those numbers for dry lease? Since i got quotes for a Saab 340A for just 21K and 15-20k for a J31/32 sounds like too much
29 Elwood64151 : Don't forget about the costs of fuel, ground handling, and a reservations system, even if it's two computers hooked up to a similar database and reser
30 ARGinMIA : All of that is included in my estimate and hundreds of other items..
31 Richierich : Let me see: - get $150 million in capital investments - procure deals with an aircraft manufacturer and leasing companies for brand-new planes - obtai
32 Post contains images Mikesairways : its simple...draw a triangle on a cocktail napkin
33 Jafa : Get on e-bay and get a copy of "airline CEO for dummies". Chapter 1. Airline economics forget about it Chapter 2. Select the perfect livery Chapter 3.
34 Post contains links Flying-Tiger : Could be well possible that a S340A might be cheaper than a J31/32. Don´t forget, the S340A is out of production for several years and the early fram
35 Aviatortj : Chapter 8. Selecting a bankruptcy lawyer for cheap I'm sorry, but wasn't that formerly Chapter 11??
36 Post contains links Flying-Tiger : I forgot to mention: the figures I have show for the 30-seaters: J41 30K D8-100 30-40K D8-200/300 50-60K EMB120 10-30K 328-100 30-50K 328-300 50K S340
37 ARGinMIA : Well.. Looking at the EMB120 for 10 to 30k.. That's more like it.. How does the EMB120 compares to the saab340 in terms of block hour cost of operatio
38 Beltwaybandit : For a US airline you would need: 1. Operating Certificate (which requires a great deal of documentation, proof of financial capability, a maintenance
39 ARGinMIA : Some things in South American are a little bit different, 1st LABOUR cost it's just not an issue... 2nd Gates and Slots.. Not a problem most of the ai
40 Post contains images B747skipper : Friends - xxx I have been flying airplanes since age 15... 1958... And as an airline pilot since 1969... PanAm bankruptcy 1991... Aerolineas Argentina
41 Post contains links Flying-Tiger : ARGinMIA: Would you mind to contact me? I´ve a few questions I would like to ask you (email tiger-star@gmx.de). Regards Flying-Tiger http://fly.to/ro
42 Post contains images Liamksa : G'day all I've got no idea about South America but here in Australia and i'd imagine the US one of the bigger hurdles (money pits) is getting you Air
43 WGW2707 : ARGinMIA, any updates on your work to start a regional airline? I would be interested to know how that is going. -WGW2707
44 Aa757first : So we meet again, WGW2707. I had quite a few posts in your "TWA Regional" topic. I think it's great that you are serious about this. I copy and pasted
45 SegmentKing : Here are some REAL numbers from a REAL airline (my own, although we don't fly these planes, we're looking at them all the time). Cessna Grand Caravan
46 WGW2707 : You know, if ARGinMIA couldn't get a lease on a newer turboprop, I wonder if a CV580 might do the trick? There are still a fair number of them around,
47 Sjoic : WGW2707~ Hello, I was wondering if you received the email I sent you? Jeff
48 WGW2707 : I just got it in Sjoic. I'll read it now, btw if you need to contact me at any time I can be contacted via AOL Instant Messenger: wgw2024 -WGW2707
49 Sjoic : I think you need to check a few more facts before assuming everyone here is 16. Jeff
50 Sushka : Where would it be based? What are some good cities that you all know of? Provo UT has over 60K sutdents. Many come from Idaho, California, Arizona, an
51 Jcs17 : Have a fun time getting capital, especially with no appreciable assets.
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