Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Why Did EK, EY, QR Start Small And With Used A/c?  
User currently offline777way From Pakistan, joined Dec 2005, 5938 posts, RR: 4
Posted (1 year 9 months 13 hours ago) and read 8539 times:

Despite the fact that they were state funded, could have ordered their own brand new aircraft from day one or leased the same in larger numbers, what prevented them? some private startups in poor countries have done better.

I know they had orders etc later on but its about starting up period.

30 replies: All unread, showing first 25:
 
User currently offlineIndianicWorld From Australia, joined Jun 2001, 3014 posts, RR: 0
Reply 1, posted (1 year 9 months 13 hours ago) and read 8528 times:

Quoting 777way (Thread starter):
some private startups in poor countries have done better.

Umm.. how do you figure that out?

Back in reality, even cash rich govts want some cost control, and taking on used aircraft is not only cheaper from a capital viewpoint but much faster to set up a new carrier.

The success of these carriers shows that what they have achieved was a sound strategy.


User currently offline777way From Pakistan, joined Dec 2005, 5938 posts, RR: 4
Reply 2, posted (1 year 9 months 12 hours ago) and read 8475 times:

Quoting IndianicWorld (Reply 1):
Quoting 777way (Thread starter):some private startups in poor countries have done better.

Umm.. how do you figure that out?

Isnt India an example?


User currently offlineIndianicWorld From Australia, joined Jun 2001, 3014 posts, RR: 0
Reply 3, posted (1 year 9 months 12 hours ago) and read 8458 times:

Quoting 777way (Reply 2):
Isnt India an example?

An example of what? Indian aviation seems to be a mess whether its state or private at present.

Comparing India, with all its complex political manifestations, to the GCC countries is alittle bit hard to even contemplate though.


User currently offline777way From Pakistan, joined Dec 2005, 5938 posts, RR: 4
Reply 4, posted (1 year 9 months 12 hours ago) and read 8386 times:

Just saying they started off with brand new aircraft in decent numbers at launch of services, EK was with a ratty PIA A300B4 besides the single almost new 733, the ex-royal family 727 came in later.

User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3659 posts, RR: 3
Reply 5, posted (1 year 9 months 12 hours ago) and read 8364 times:

My father always used to tell me that the easiest thing in the World was to "spend other peoples money". How true this would be in this example.
Set up a new airline wirth state backing, complete with an entirely new fleet. The first factor is that a new fleet takes far more time from order to delivery compared 2nd hand purchased or leased, in the meantime cash is flowing out with none coming in. If we are going to have a new fleet, we might as well have a new headquarters building, and our own maintenance facility right up to and including D checks whilst we are at it. Of course its financially more risky, but never mind the state is there to cover the losses.

Invariably the only airlines run as complete financial basket cases are the ones with a dictator in the background running the airline for reasons of personal vanity.
EK, EY and QR have all been set up with the intention of making money, not losing it. In the case of EK it is now so large that running it with little or no financial control would result in the largest losses ever seen in the aviation world.


User currently offline777way From Pakistan, joined Dec 2005, 5938 posts, RR: 4
Reply 6, posted (1 year 9 months 12 hours ago) and read 8292 times:

Do EY and QR fit the same as EK?

User currently offlinejustinlee From China, joined Aug 2012, 331 posts, RR: 0
Reply 7, posted (1 year 9 months 11 hours ago) and read 8142 times:

Quoting Bongodog1964 (Reply 5):
My father always used to tell me that the easiest thing in the World was to "spend other peoples money". How true this would be in this example.

Did your father work on Wall St. Big grin

[Edited 2013-03-03 03:43:02]

User currently offlineJoKeR From Serbia, joined Nov 2004, 2245 posts, RR: 9
Reply 8, posted (1 year 9 months 10 hours ago) and read 8023 times:

Quoting 777way (Thread starter):
Despite the fact that they were state funded, could have ordered their own brand new aircraft from day one or leased the same in larger numbers, what prevented them? some private startups in poor countries have done better.

Well maybe they were just smart enough to keep their overheads to a minimum until the business expands and warrants investemnts in new equipment? Isn't that the logical and most practical way to launch a new airline?



Kafa, čaj, šraf?
User currently offlinestylo777 From Germany, joined Feb 2006, 3009 posts, RR: 11
Reply 9, posted (1 year 9 months 10 hours ago) and read 7933 times:

EK's 300 and 737 are both quite famous in aviation history, EY started of with leased TAM and SQ aircraft, but what about QR?

User currently offlineSpaceshipDC10 From Canada, joined Jan 2013, 1998 posts, RR: 3
Reply 10, posted (1 year 9 months 9 hours ago) and read 7832 times:

Quoting stylo777 (Reply 9):
but what about QR?

View Large View Medium
Click here for bigger photo!

Photo © A J Best
View Large View Medium
Click here for bigger photo!

Photo © JetPix


View Large View Medium
Click here for bigger photo!

Photo © Eddy Cuperus



B727-200, B747SR and A310-200.



I wish I was a glow worm.
User currently offline3rdGen From Bahrain, joined Jul 2011, 240 posts, RR: 0
Reply 11, posted (1 year 9 months 9 hours ago) and read 7739 times:

QR went through two phases the pre Al-Bakr period and the post Al-Bakr period. QR were running while GF was still the national airline of the country, and during this period QR almost shutdown. It was after Qatar sold their stake in GF and placed Al-Bakr at the helm that they started growing and doing well.

The rulers of Dubai are businessmen, they know how to run their country and keep a close eye on whats going on with their investments. They knew exactly what they were doing when they started EK and are now reaping the benefits.

EY did start pretty big, they opened in July 2003 and by the next year had 777, 330s and 380s on order. Suggesting that they didn't start big is an understatement. 4 years later they made the largest aircraft order in commercial aviation history. (Wikipedia).

Apart from Kingfisher most of the airlines started in a more subdued (i.e. sensible) manner. And take a look at whats going on now, everyone is flying except IT.


User currently offline777way From Pakistan, joined Dec 2005, 5938 posts, RR: 4
Reply 12, posted (1 year 9 months 7 hours ago) and read 7526 times:

Quoting JoKeR (Reply 8):

But arent there many who started off with new fleets and are still around and doing good too.


User currently offlinestrandedinbgm From United States of America, joined Jul 2007, 349 posts, RR: 0
Reply 13, posted (1 year 8 months 4 weeks 1 day 22 hours ago) and read 5534 times:

Shoot bullets first, then fire cannon balls.


It's 737s, 747s and 380s. Not 737's, 747's and 380's. Learn to use the apostrophe for crying out loud.
User currently onlinelightsaber From United States of America, joined Jan 2005, 13456 posts, RR: 100
Reply 14, posted (1 year 8 months 4 weeks 1 day 19 hours ago) and read 4631 times:
Support Airliners.net - become a First Class Member!

Quoting Bongodog1964 (Reply 5):
My father always used to tell me that the easiest thing in the World was to "spend other peoples money".

Exactly. I think starting on a budget was needed for the culture formation of the business.

Quoting 777way (Reply 12):
But arent there many who started off with new fleets and are still around and doing good too.

Who? TK? Otherwise, the other airlines that started 'with all the advantages' are mis-managed. So perhaps the trick is to start without the program *not* being the favored project. Making the startup airline be run as a business.

I wonder, was seeing the mis-management of GF (by each founding country's perspective, not as in criminal mis-management) the reason for starting used?


Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineFly-K From Germany, joined May 2000, 3158 posts, RR: 51
Reply 15, posted (1 year 8 months 4 weeks 1 day 14 hours ago) and read 3448 times:
Support Airliners.net - become a First Class Member!

One factor in EY's case might have been they wanted to start quickly and not wait for deliveries of ordered aircraft, so they turned to leased aircraft as an interim solution.


Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you have been...
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3659 posts, RR: 3
Reply 16, posted (1 year 8 months 4 weeks 1 day 13 hours ago) and read 3113 times:

Quoting 777way (Reply 12):
But arent there many who started off with new fleets and are still around and doing good too.

Many of those that we refer to as legacy carriers did start with new fleets, however they started operations so long ago that there was little/no market for 2nd hand aircraft, the lifespan of aircraft was so short that 5 years old was ancient, and manufacturers lived so hand to mouth that new planes were readily available.

Some our most succesful airlines started with one or two small elderly planes, Ryanair with a 14 seat turboprop, Easyjet with a couple of 732's.

There will always be exceptions, but I think it fair to say that in most cases start up airlines commence with leased (often wet) 2nd hand aircraft, as this provides a reasonable aircraft at a reasonable cost in a reasonably short time frame.


User currently offlineleftyboarder From Turkey, joined Apr 2008, 693 posts, RR: 1
Reply 17, posted (1 year 8 months 4 weeks 1 day 12 hours ago) and read 2958 times:

Quoting lightsaber (Reply 14):
Who? TK? Otherwise, the other airlines that started 'with all the advantages' are mis-managed. So perhaps the trick is to start without the program *not* being the favored project. Making the startup airline be run as a business.

I wouldn't put TK in that category... Sure, it was recently transformed from a provincial carrier to a global powerhouse, but still it dates back to 1933, whereas for example BA dates to 1939 (BOAC) AFAIK and AF to also 1933. If we do so, we should count all former flag carriers who were subsidized for decades.

And I guess that's where the OP's question is blurred; which timeframe do we talk about when we talk about starting big? Many airlines back in the 40s or 50s had large-ish fleets for the time, all backed by governments. Of course back then planes were much smaller and short range but the world economy was smaller too.


User currently offlineASA From Bangladesh, joined Dec 2010, 784 posts, RR: 2
Reply 18, posted (1 year 8 months 4 weeks 1 day 4 hours ago) and read 2688 times:

Article on Yahoo/AP on these three global carriers ...

Middle East is new global travel crossroads
http://news.yahoo.com/middle-east-gl...l-travel-crossroads-052317640.html


User currently onlinelightsaber From United States of America, joined Jan 2005, 13456 posts, RR: 100
Reply 19, posted (1 year 8 months 4 weeks 1 day 4 hours ago) and read 2656 times:
Support Airliners.net - become a First Class Member!

Quoting leftyboarder (Reply 17):
I wouldn't put TK in that category...

True, but way back when it was launched with a nice fleet.    That's all. I fully respect TK.

Quoting leftyboarder (Reply 17):
If we do so, we should count all former flag carriers who were subsidized for decades.

I do count them in the group.    Its one reason we're so impress by EK, EY, QR, and yes TK.

From ASA's link:
"Governments here understand the power of connectivity to drive economies," Tony Tyler, CEO of the International Air Transport Association said in a recent speech in Abu Dhabi.

I remember hearing about that in the Western economies until the 1980s. Then somehow economic growth became synonymous with blight. It isn't as EK, EY, QR, and TK have proven.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineytz From Canada, joined Jun 2009, 2218 posts, RR: 24
Reply 20, posted (1 year 8 months 4 weeks 1 day 3 hours ago) and read 2558 times:

Quoting 777way (Thread starter):
Despite the fact that they were state funded, could have ordered their own brand new aircraft from day one or leased the same in larger numbers, what prevented them? some private startups in poor countries have done better.

You forget what Dubai was like back then and how much money they actually had (nowhere near the levels of capital that the Government/Sheikh of Dubai has today). And an airline was more a small hedge for Sheikh Rashid than the strategic investment it has become for his son.

The Dubai of the 80s was far different than the Dubai of today.


User currently offlinewinginit From United States of America, joined Feb 2013, 13 posts, RR: 0
Reply 21, posted (1 year 8 months 4 weeks 1 day 1 hour ago) and read 2437 times:

Quoting 777way (Reply 12):
But arent there many who started off with new fleets and are still around and doing good too.

Let's see.... uhm....

No.



The postings on this site are my own and don’t necessarily represent American Airlines' positions, strategies or opinion
User currently offlineanstar From United Kingdom, joined Nov 2003, 5304 posts, RR: 7
Reply 22, posted (1 year 8 months 4 weeks 1 day 1 hour ago) and read 2419 times:

Quoting Bongodog1964 (Reply 16):
but I think it fair to say that in most cases start up airlines commence with leased (often wet)

Which is prob why VS are doing this for their domestic services.


User currently offlineairzim From Zimbabwe, joined Jun 2001, 1226 posts, RR: 1
Reply 23, posted (1 year 8 months 4 weeks 1 day 1 hour ago) and read 2390 times:

Quoting 777way (Thread starter):

Stage II and cheap fuel.

In the 80s there were tons of used aircraft that were cheap to operate and put into operation. Plus fuel was cheap so the advantages or using used airplanes over new, wasn't as pronounced.

Stage II noise abatement killed much of the older used market. Couldn't operate many of these planes on noise sensitive airports. Re-engining airframes wasn't always economically viable.

Fuel costs increased considerably, wiping out any operational cost advantage. You pretty much had no choice but to deploy less thirsty frames.

Economic collapse in the early 2000s added lots of airplanes on the used markets. Money was also cheap, so jetBlue could start with new planes right away on favorable deals from Airbus.


User currently offlineViscount724 From Switzerland, joined Oct 2006, 25871 posts, RR: 22
Reply 24, posted (1 year 8 months 4 weeks 1 day 1 hour ago) and read 2379 times:

Quoting 777way (Reply 12):
Quoting JoKeR (Reply 8):

But arent there many who started off with new fleets and are still around and doing good too.

Both JAL and ANA began service with small fleets of used aircraft. Some of JAL's original fleet included several ex-NW Martin 202s that NW was anxious to get rid of after 5 fatal crashes within a couple of years. If not mistaken NW pilots refused to fly them at one point. The Martin 202 was eventually grounded for several months due to wing spar fatigue issues.


25 777way : New fleet can also be just two or three brand new or slightly used latest model aircraft bought or leased, anyways harts off to their humble beginning
26 ASA : EK had a very humble beginning, you are right. I remember their B727-200 making DXB-KHI-DAC twice a week in their early days. And look where they are
27 RyanairGuru : JetBlue is the ONLY airline that comes to mind that started with an all new fleet. There might be a few more, but of "major" airlines I'm sure it is
28 Viscount724 : I believe all except a few Virgin America A319/320s were new.
29 FlyingAY : What kind of history does Air Asia or Tiger Airways have? They have hundreds of planes on order at the moment... What about Jetstar?
30 RyanairGuru : I think that the OP was referring to airlines that started with a new-build fleet, not necessarily those that started with second hand frames and sub
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Why Did EK Never Order/operate The 747? posted Fri Feb 19 2010 08:55:35 by CaliAtenza
Muslim Employment On EK/EY/QR/GF posted Tue Apr 1 2008 02:36:24 by IrregKing
A Rush Of EK/EY/QR/KU To Serve Canada? posted Sun Sep 9 2007 17:26:05 by MSYYZ
Why Do EK Fly From Both LHR And LGW? posted Fri Mar 24 2006 01:49:47 by Zoheb
Why Did UAL Suspend Service Between HKG And Bkk? posted Sat Jun 1 2002 05:36:52 by United Airline
What Did The Gulf Region Do Before EK, EY And QR? posted Sat Jun 2 2007 15:28:30 by Gilesdavies
With QR Joining OW, Can We Get Q-Miles W/ EK, EY? posted Tue Oct 9 2012 11:22:19 by QatarA340
Why No Alliance For EK, EY, MP And LT? posted Sat Oct 21 2006 17:50:21 by RicardoFG
Why No EK, TK, Or QR To MEX? posted Mon Feb 4 2013 08:52:53 by 345rules
QR To Start DOH-BHX With 787s (EDI/LGW Possible) posted Thu Jul 19 2012 12:03:58 by david_itl