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New Trio Of Airlines... Opinions?  
User currently offline747-600X From United States of America, joined Jan 2000, 2829 posts, RR: 13
Posted (14 years 3 months 4 weeks 23 hours ago) and read 1844 times:

Okay, this is a bit involved, so please bare with me...

For a while now, a friend of mine and I have been seriously considering starting an airline. We aren't rightly sure how to do this, but this is the general basis for the services provided (because we have yet to name it, I will simply use the name Air Lines):

The company, Air Lines, would consist of three separate yet connected air service providers. Air Lines itself would be a low-fare passenger carrier operating flights on a global scale precisely the same way as Southwest or Ryanair do on a local/national scale. Using the three variants of the 767, we would fly only to the world's largest 25 or 30 cities. Rather than have centralized hubs with "explosions" of routes outwards, the network would connect all major cities to all major cities. The all-economy airplanes would feature slightly greater seating pitch than is standard on Y classes. This, combined with 2-3-2 seating, will make the planes highly efficient. As with Southwest, we will operate one type and one type alone. The network will be the only airline in the world to offer service to every major city. No "Iberia from Madrid to wherever; AirFrance from Paris to whereever; United from Denver/Chicago to wherever;" it would be a system leaving out the little cities, only flying to the most populated parts of the planet Earth, and having a low-hub well-spread flight system. As time passed, the increase of routes would not feature added cities, but added connections. Assuming we had 30 cities, it would be impossible to fly from each of the 30 to each of the other 30 right off the bat, so as the years passed, routes would be added connecting the cities not first connected, always maintaining the original 30. The idea would be to eventually form the single most solid network of major-city connections around the world. We would offer our planes to just about any company on Earth for use as Logojets given that with planes which would go around the world regularly the advertising prospects would be high.
The second division of the company would be AirLines Aircraft Leasing. Rather than be just a leasing company like ILFC (there is, for example, no ILFC Airlines), we would combine the profits of a regular airline with those of a leasing company, allowing us to transfer earnings from the airline into the leasing company, thereby allowing us to lease aircraft at a lower rate, drawing in lots of business and in turn generating additional profit with which to buy new aircraft to be alternately supplied to the airline and the leasing company.
The third division would be a new kind of cargo carrier which would team up with individual companies. Rather than calling FedEx, UPS, or Cargolux to have something shipped from point A to point B, companies would inform us of their most regular routes and we would lease them an airplane at a rate allowing them to run the plane regularly back and forth (using our pilots). By teaming up like this, the question would never be about where the planes have to go or if they'll be used. If Microsoft had to ship computer chips from Seattle to Spokane regularly, rather than pay for dozens of individual shipments, we would simply let them have the plane. They would make regular payments for as long as they used it. The payments would be low, but would very quickly surpass the price of an ordinary shipment.

The three companies would operate together, such that if one came into dire need of cash while another was in sufficient cashflow, money would be drawn through a single central account, (Airlines Company, etc.).

The airline would be the first low-fare world-wide carrier, doing exactly what airlines like Southwest do, but on a global scale, and the first to both own and operate aircraft, and lease them, and the first to provide companies with regular shipping needs a low-cost alternative to using outside shippers.

9 replies: All unread, jump to last
User currently offlineJessman From United States of America, joined Jul 2001, 1506 posts, RR: 7
Reply 1, posted (14 years 3 months 4 weeks 12 hours ago) and read 1770 times:

The problem with the idea is that you'd need more than one airline, or just operate out of the countries that allow 5'th freedom rights. Basically under normal circumstances you would not be allowed to be a US based airline and fly scheduled passenger stand alone service between, for example, MAD and LON.
It's a no-no. Governments protect compainies in their country with such measures, so don't look for that to change anytime soon. Most countries have laws against foreign ownership too, so that precludes you from purchasing several airlines that already have the international rights to what you want to do.
You could, on the other hand, choose a country, for example, the US, and fly from several US cities to several European cities. But if you do that, good luck because there are already entrenched airlines waiting to smash you little upstarts into oblivion.
That having been said I think it is a great idea. If only the world were one.  Smile

User currently offline747-600X From United States of America, joined Jan 2000, 2829 posts, RR: 13
Reply 2, posted (14 years 3 months 4 weeks 12 hours ago) and read 1755 times:

This is actually a small issue. Each country would have its own company and its own technically owned and operated airline. The companies would overseen by "regional airlords" for lack of a better term. THe regional managers would negotiate only their sector of the overall business, but funds - which can be transferred internationally - would be sent strait to a central US bank and the overall company's headquarters here in Chicago. The other advantage of fractured heirarchies (sp?) would be that if one company does bad business or is corrupt, that limb could be cut off without causing harm to the overall. Basically the idea is to have a variety of different airlines which all, "coincidentally", have the same paint schemes.

User currently offlineJessman From United States of America, joined Jul 2001, 1506 posts, RR: 7
Reply 3, posted (14 years 3 months 4 weeks 11 hours ago) and read 1740 times:

The idea is already realized in airline alliances with Anti Trust Immunity; I.E. KLM/NW

User currently offlineVirginFlyer From New Zealand, joined Sep 2000, 4652 posts, RR: 37
Reply 4, posted (14 years 3 months 4 weeks 9 hours ago) and read 1718 times:

747-600X - having seperate companies in each country is likely to put your costs up (company registration costs, management costs) significantly. Not to mention it will make things very complex. And who will own these companies? Because if Air Lines is a US company, even if it sets up subsidiary companies in each country, these are still owned by Air Lines, and as such you wouldnt be able to operate. Thus you would need for the subsidiary companies to be majority owned by someone from that country, at most minority owned by Air Lines, and contracted to Air Lines. This of course means that Air Lines itself won't likely get any more than half the profits from all these operations. It also means that there is the risk of the other parties exiting from the contracts - I doubt you will find any one willing to sign up to one that doesnt allow them some way to exit. The result could be suddenly not being able to run parts of your operation, which presumably would not do wonders for customer confidence. And we all know what that means.

Forgetting the foreign ownership issues, I think there may be other flaws in the concept too.
1) Low cost carriers work by fitting as many people into an air craft as they can, with minimal service. Its all well and good having your 2 hour Southwest flight with no food service as such, and less than spacious seating. But if you expand that into long haul routes, you are not going to be the most popular airline. Admittedly charter airlines do this, but they primarily operate to holiday markets, what you are talking about appears to be a concept aimed more at the buisiness market, which I doubt would find such conditions acceptable. I doubt anyone would be too overjoyed about an 8 hour flight with hardly any food, no entertainment, and cramped seating.
2) Low cost carriers also work by having fast turn arounds, so they can utilise air craft as much as possible. If I have a 737 with 30 minute turn around, and an average sector length of 1 hour 30 minutes, I can do say 6 sectors in a twelve hour period. With 137 passengers (Southwest 73G), that means i can carry 822 passengers in that 12 hour period. Now, in the same time, your 767 will likely on average fly 2 or less sectors. Your turnaround times will be longer, as will your flight times. This of course means you are going to have to charge more per seat-mile than Southwest and co, to make a profit.

Sorry, but I just don't see it working


"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
User currently offlineTwaneedsnohelp From , joined Dec 1969, posts, RR:
Reply 5, posted (14 years 3 months 4 weeks 3 hours ago) and read 1688 times:

Glad your thinking but time does not allow all the issues i see with your idea.

keep thinking though!

User currently offlineTriStar500 From Germany, joined Nov 1999, 4706 posts, RR: 39
Reply 6, posted (14 years 3 months 4 weeks 2 hours ago) and read 1681 times:

From an operational standpoint, with legal, 5th-freedom-issues put aside (which would make it even more impossible), time zones will become a big hazard for your scheduling.
You will have to offer flights at - from passenger's and crew's point of view - unattractive times, e.g. NYC-LON departing 4 a.m. in the morning etc. (just an example), if you want to use your 767's for more than 2 cycles a day. Remember that you can't use your planes on each of your routes, because they are registered with their respective subsidiaries.

Another reason, why THIS concept would hardly work.
But I really enjoy reading and evaluating your ideas - hope to hear from your creative business plans again.  Smile/happy/getting dizzy

Homer: Facts are meaningless. You could use facts to prove anything that's even remotely true!
User currently offlineVirginFlyer From New Zealand, joined Sep 2000, 4652 posts, RR: 37
Reply 7, posted (14 years 3 months 4 weeks 1 hour ago) and read 1659 times:

Yeah, don't give up with the ideas just because this one is a bit of a dog. I don't think anyone has ever got anything right the first time, it usually takes a bit of refinement, and sometimes a rethink. But you will find that in amongst a dozen crazy ideas, there may just be a really good one! Keep posting your plans - sooner or later you will give us a stunner!


"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
User currently offlineN202PA From United States of America, joined Jun 2000, 1577 posts, RR: 3
Reply 8, posted (14 years 3 months 3 weeks 6 days 19 hours ago) and read 1626 times:

Oy. What is it with kids around here that think they can start airlines like this on a whim?

User currently offlineElchanan From Norway, joined Sep 2001, 60 posts, RR: 0
Reply 9, posted (14 years 3 months 3 weeks 6 days 19 hours ago) and read 1610 times:

"Oy. What is it with kids around here that think they can start airlines like this on a whim?"

I agree with you that this is no easy operation - even for experienced businessmen. And the concept doesn't seem doable. Nevertheless I think it's great that people think of ideas and concepts regardless of age and experience, and I for one took great interest in reading the many constructive replies that explicitly display the problems this concept would face. Keep on thinking 747-600x and good answers from the rest of you!

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