ArgInMIA
Posts: 475
Joined: Fri Nov 09, 2001 4:07 pm

Cheapest Way To Start An Airline

Thu Apr 18, 2002 6:21 am

If you had a very limited budget to start an airline in the US (lets say 2 Millons) What would you do? Airplane? Routes? do you think is possible? I thought about the Yak-40.. can you fly that airplane for commercial service here?
Alto.. Mucho mas alto.. hasta la cumbre
 
PH-BFA
Posts: 444
Joined: Fri Apr 05, 2002 6:22 pm

RE: Cheapest Way To Start An Airline

Thu Apr 18, 2002 6:30 am

Some reasons why not the Yak-40:

1. Don't know if it is approved by FAA
2. Americans would not like to fly on it(maybe some American aviation lovers)
3. Very expensive, since nobody flies those aircraft in the US, so maintenance have to be carried out in Russia
4. No(or maybe very limited) spare parts available in the US if anything brakes down

PH-BFA
 
ArgInMIA
Posts: 475
Joined: Fri Nov 09, 2001 4:07 pm

RE: Cheapest Way To Start An Airline

Thu Apr 18, 2002 6:34 am

so what other aircraft can be used.. staying withing that small budget? lease?
Alto.. Mucho mas alto.. hasta la cumbre
 
roguetrader
Posts: 1404
Joined: Tue Aug 03, 2004 5:14 am

RE: Cheapest Way To Start An Airline

Thu Apr 18, 2002 6:48 am

For 2 million you could start a helicopter service giving tours of the Grand Canyon. You could maybe start a very small charter service providing semi-regular airline- like service to....small islands in the Caribbean or perhaps in the Alaskan tundra. But, that amount is way too low to start anything like a 'normal' airline.

If I had money to start an airline, I wouldn't. The odds of success are worse than the odds in Vegas: you'd be better off just putting your money in the bank and earning the interest.

kind regards,

RogueTrader
 
slawko
Posts: 3742
Joined: Tue May 25, 1999 7:40 am

RE: Cheapest Way To Start An Airline

Thu Apr 18, 2002 7:00 am

Declare bankruptcy before you even start and avoid all of the headaches that would have occured in between your start up date and you shut down date  Smile
"Clive Beddoe says he favours competition, but his actions do not support that idea." Robert Milton - CEO Air Canada
 
searpqx
Posts: 4173
Joined: Thu Jun 29, 2000 10:36 am

RE: Cheapest Way To Start An Airline

Thu Apr 18, 2002 7:22 am

Having worked (briefly) for one of the undercapitalized startups in the mid-late 90s, I have a simpe answer for you - There isn't a cheap way to start an airline.
"The two most common elements in the universe are Hydrogen and stupidity"
 
Sonic
Posts: 1505
Joined: Mon Jan 24, 2000 3:10 am

RE: Cheapest Way To Start An Airline

Thu Apr 18, 2002 7:55 am

As I am living in Lithuania, I would aquire Tupolev Tu-154 and start a charter service since Lithuanian Airlines B732s can't fly to such destinations as Canary Islands or northern Africa/ middle east, so air tours organisations has to hire Polish airlines to do these routes.
However, I don't know if I would succeed. Yes, in summer that bussines most likely would give profit, but what to do with that plane in winter?

Another bussines plan, but this is even more risky -- get old Ilyushin Il-62 (I knew flyable ones were being sold just for 1 million Litas (250000 bucks) after collapse of Soviet Empire) and do transatlantic and long range routes, also charters. Vilnius-Chicago would be the only proftable one I could think of though, and that's only because there are maybe half a million Lithuanians in Chicago region. But because other long range routes from Vilnius doesn't seem to be profitable, this is why no airline aquires long range plane.
 
Guest

RE: Cheapest Way To Start An Airline

Thu Apr 18, 2002 8:02 am

Hate to be a naysayer...but that $2M will likely be gone before you sign your first gate lease or hired your first employee.  Sad
 
ThirtyEcho
Posts: 1409
Joined: Tue Jan 01, 2002 1:21 am

RE: Cheapest Way To Start An Airline

Thu Apr 18, 2002 8:06 am

Easy; here is how its done:

1. Wait for a major World War to end.
2. Buy military surplus transport aircraft, cheap.
3. Refit them for civilian use.
4. Hire ex-military pilots, again cheap.
5. Bribe politicians to get slots.
6. Undersell any competition until they go broke.
7. Raise fares when competitors die off.

This is a proven plan. Enjoy!
 
CVG777
Posts: 1211
Joined: Tue May 02, 2000 6:42 am

RE: Cheapest Way To Start An Airline

Thu Apr 18, 2002 12:33 pm

Or you could do like Dogbert did in a recent Dlibert cartoon strip....

Start an airline with no airplanes, sell 'non refundable, passenger has absolutely no rights to anything if anything happens because of anything' tickets, and when the people show up say that there is no plane because of mechanical difficulties and it is somewhere far away in maintenence. Then send them home...  Big thumbs up

It might work.
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 12:58 am

With numerous aircraft parked in the desert right now, a good leasing deal could be had. Lease a few DC-9s or MD-80s and start a charter service. If things go well, you lease more planes to meet the demand, then eventually, when the time is right, turn your more profitable charter routes into scheduled passenger runs.
 
Guest

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 1:06 am

Well,

I'd get a tin of paint and slap some lettering on the side of my laundry cart. Then I would start charging my pets money transporting them around the yard...knowing my skills I would fold in a day. Wondering where the $2m went? Well the tin of paint I bought would be an "unconditional" tin of paint...no conditions to the use of the paint.

SixStarAnsett  Big thumbs up
 
Guest

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 1:07 am

Lease a few DC9s or MD80s with 2 Million ?? How long ? For 2 hours ??

@Sonic : You could route them to Egypt or Kenya in winter.
 
Konstantinos
Posts: 364
Joined: Mon Jun 25, 2001 5:29 am

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 2:18 am

You can start off an airline with less than $2 million!

It all depends on where you want to start it, where you want to fly, what plane or planes you want to use and the number of them, if you will lease the or buy them etc etc etc.

If you are intrested in starting an airline and you have the $2 million dollars then please do contact me. I will be very intrested in starting one up with you. You will not even need to use your 2 mill. All you need is $100,000 and I'll put in my $100,000 and go 50/50!
So, what do you say ? Waiting for your e-mail.
 
Guest

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 2:43 am

Let's see how that first $2M will be spent...

Lawyers/Contracts/Mumbo Jumbo $1,999,999
Aircraft/Leases/Salaries/Advertising/Etc. $1

Heck, it took $6M to build the "Steve Austin - The Six Million Dollar Man" and that was 1977.  Smile
 
767-322ETOPS
Posts: 319
Joined: Wed May 30, 2001 9:06 am

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 2:56 am

I think JetBlue has shown the way, and among other things they teach us to:

- Use a lot of other people's money. Airlines are very capital intensive, so you need some deep pockets backing you up. If you know what you're doing and know the right people, then like David Neeleman you can get a hedge fund manager to invest some cash for equity in your airline.

- Forget the jalopies sitting in the desset (DC9, 727, etc.) and play A v. B for all its worth for new, fuel efficient a/c. JetBlue's original plan was to fly the 737, until Airbus made them an offer they couldn't refuse.
 
DELTA777
Posts: 637
Joined: Tue Mar 07, 2000 6:34 am

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 4:48 am

I want to get a Cessna Caravan and fly non stop flights between Youngstown and Atlantic City. You would not believe how many people gamble here In the Y-town. we have MD-11 flights to Las Vegas every year. and Sun Country 737-800s to Atlantic City, so there would be enough people.

D E L T A 7 7 7
 
caravelle
Posts: 656
Joined: Thu Aug 10, 2000 4:33 am

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 4:56 am

Myself,l I`d spend the money on a two-seat WW2 type Messerschmitt, and just roar... Too little money, too great an ambition. A great pity, now, initt...

- caravelle
Trains and boats and planes....
 
ArgInMIA
Posts: 475
Joined: Fri Nov 09, 2001 4:07 pm

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 11:26 am

How about just a charter company? any idea for how much you can lease or buy a Fokker f-28 or something similar?
Alto.. Mucho mas alto.. hasta la cumbre
 
desert_dweller
Posts: 89
Joined: Fri Apr 05, 2002 1:11 pm

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 12:34 pm

you can lease a few cessna caravans...





for a day or two.
 
cloudy
Posts: 1613
Joined: Sat Apr 06, 2002 3:23 pm

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 12:44 pm

There are no Russian aircraft that I know of that are currently certified for Airline operations in the United States, not even the modern Tu-204. Yes, they are allowed to LAND here if certified in their own countries, and they are sometimes used in the US for cargo charters, with foreign registration and certification.
And some individuals have registered MIG-15 and other Russian planes as experimental aircraft for personal use.
But none have been certified to be owned and operated by US carriers for passenger service . That kind of certification is very difficult and expensive to achieve. So forget the Yak-40.

There are, however, a bunch of cheap and very efficient used turboprops out on the market. They have been displaced by RJ's. I have thought that perhaps you could pick up a couple of these and start service between city pairs in the Northern Great Plains that have business connections. Fargo, Bismark, Boise, Cheyenne, etc. The operating cost of a 72-seet turboprop might be competitive even with driving if you did a good job in it (I have no expertise to back this statement up - it is a pure shot in the dark  Smile ). High frequencies, cheap prices, ya know - the Southwest model - regional style.
 
The Coachman
Posts: 1192
Joined: Sun Apr 29, 2001 9:57 pm

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 12:48 pm

The cheapest way to start an airline is in your own head. Don't touch real money, because it's a highly risky business and returns are not all that great, especially at this point in time with economic uncertainty.
M88, 722, 732, 733, 734, 73G, 73H, 742, 743, 744, 752, 762, 763, 772, 773, 77W, 320, 332, 333, 345, 388, DH8, SF3 - want
 
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STT757
Posts: 13174
Joined: Tue Mar 28, 2000 1:14 am

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 1:10 pm

Some kind of drug smuggling airline that operates between Miami and South America, lots of profits there.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
JETPILOT
Posts: 3094
Joined: Tue May 18, 1999 6:40 am

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 1:42 pm

Drug smuggling? It's too competitive... American Airlines has that covered.

JET
 
IndianGuy
Posts: 3126
Joined: Fri Jul 07, 2000 3:14 pm

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 2:44 pm

I would try leasing a fleet of 4-5 Cessna Caravans and start up a small feeder carrier? Fly commuter pax flights in Early mornings and Evenings, and rest of the day and night fly Cargo.

A C208 could carry 12 pax easy, or around 2000 kgs atleast.

What do u think?

Another Idea: Pick up some old DC3's . You could probably get them cheap. Some days back, i saw an ad in the local paper for semi-airworthy WW2 vintage DC3 Dakotas withough Engines and Avionics going for $2000-$3000 per airframe! Probably could do a lot of tourist flights and cargo as well, if you could find the engines!

What do u think?


- Roy
 
Guest

RE: Cheapest Way To Start An Airline

Fri Apr 19, 2002 4:40 pm

It's clear how many people here have business experience - none have mentioned the fact that if you have two million in equity, you can generally triple that amount with debt. That means you have six million dollars to play around with.

I'd stay out of the US regional business because that's the area which will be hardest hit by the increased security - no one is keen to spend as long (or longer) hanging around airports as they would have done driving from A to B.

Scheduled passenger operations consume megabucks, unless you can find a niche market and serve it well. Your US$6m isn't going to go very far on that at all.

Rather, I'd recommend either passenger charters - buy (rather than lease - there are amazing deals out there that won't be around much longer) Chapter 3 DC9s or B727s and then operate a low key service (don't grow too big or flashy, and don't get any grandiose ideas about operating schedules!) or alternatively cargo charters. This latter is my personal favourite at the moment since cargo picks up earlier than pax coming out of a recession.

Whatever you do, you're legally required to make sure you have sufficient cash to cover six months operating expenses with nil income - so bear that in mind!

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