Posts: 222
Joined: Tue Dec 21, 1999 11:03 am

Operating Costs For A Beech, Saab, Dash...

Thu May 25, 2000 4:25 am

Hi everybody,

I already told you my friend and I want to start a new regional airline in Canada.

We are writting to business plan. But we need two things.

First, we don't really know where we can get the operating costs for planes like Saab 340, Beech 1900, Dash-8 100 or a jetstream 31.

Second, do you know who lease this kind of planes and the price?


Posts: 3940
Joined: Mon Aug 23, 1999 5:35 am

RE: Operating Costs For A Beech, Saab, Dash...

Thu May 25, 2000 4:58 am

I would recommand to take a look on BAe System´s homepage http://www.bae.regional.co.uk and choose the topic BAe asset management. I think they can tell you some things about the J31 at least. I know that Fairchild has an assets section, too, take a look on their homepage, http://www.faidor.com. Hope it helps a bit.

http://fly.to/rorders The regional plane orders page
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RE: Operating Costs For A Beech, Saab, Dash...

Thu May 25, 2000 10:41 am

Aad665, I'm afraid I can't tell you specific costs for any of the aircraft, but I do have some comments, a few on aircraft but also several of them about the proposed airline. First of all, I want to mention a few things. First of all, keep in mind that airlines are very very risky businesses, so make sure your plan is good and that you have adaquete capital. Also, don't just take my word for what I'm going to say next, get a lot of opinions on what you're doing and make sure you are confident in what you're doing, and that you are well prepared. Also, I'll just warn you this could get a little long, and also these are kind of random thoughts I'm throwing at you...but I'm sure you won't mind reading for a bit if you'd seriously writing a business plan.

Anyways, first of all, I'm assuming you're going to be using St. Hubert airport, wasn't that it? Remember that at this point neither WestJet nor CanJet have yet chosen the airport they will fly to at Montreal. If either of them choose St. Hubert it could create problems with your proposed airline, unless you went into an alliance with them to feed them. Competing head on with 737's would be difficult.

Also, keep in mind that you won't get people connecting to other carriers at YHU, so you can't use commercial agreements with foreign airlines to help the carrier. I don't see this as a problem, but keep it in mind.

Also, keep in mind that convenience is a selling factor for your airline. You probably will only be able to match other airlines prices, at best, but you want to make people fly with you simply because YHU is closer to where they are. This means your target market will be the South Shore of Montreal, which if I remember correctly from when I was last in Montreal, it had a fair number of english speaking residents. Other than that, YHU would also siphon some traffic away from downtown Montreal, but probably wouldn't get traffic from Laval.

Now, a note about the airports you will choose. From YHU I would look at flying to Toronto City Centre (YTZ) as you would attract business travellers reasonably well, I would hope. Keep in mind, however, that YTZ is not allowed to have RJ's yet, but that could change, and that would be a risk for your company that AC would put RJ's to there. As for other airport choices, I would look to Quebec City, Ottawa, and Windsor as having some potential, but be careful in case WestJet or CanJet or the charters look at moving in on your markets. When choosing which airports to fly from, and whether to use the main terminal or board from FBO's, keep in mind a few points. One thing is that using the main terminal is less confusing to most passengers, but if you can effectively communicate with the passengers exactly WHERE they are supposed to go then FBO's or separate terminals could be acceptable. When choosing where to fly make sure you choose airports people will want to use, ones that competitors won't kill you at, ones that are convenient, easy to find, and keep costs under control.

Also, about routes. If you want to serve routes from, say, Quebec City to Toronto, it would probably be acceptable to fly YQB-YHU-YTZ, just make sure the stop is short and convenient. Keep in mind that using one-stops are better than connections, and that one-stops flights can be very useful in offering a route that is impractical/impossible to fly non-stop, just keep the stops short so that the inconvenience is minimized.

Now quickly a word about marketing. I understand that AirMontreal has failed, and depending on the way you look at it that may either be a market waiting to be grabbed, or a sign of problems. Keep in mind that the seat-mile costs are higher with smaller aircraft, so it's tough to really operate a low fare airline with small aircraft, you'll have to get a mix of middle-fares as well. I would suggest one way of reducing the risk of your venture would be to find a company that would regularly book seats on the airline. For example, I believe Pratt and Whitney Canada operates a shuttle between Montreal and Toronto for its corporate use, perhaps your airline could step in and replace that, and the revenues generated by having P&W book, say, 10 seats every day would be a great start. Or for example Telus has a small charter fly Calgary-Edmonton on which it books seats, and then this small airline sells the excess seats (Corporate Express, if you want to look up their website). I would suggest finding an strong customer like that to buy blocks of seats, that would take a lot of the risk out of the undertaking and guarantee you a minimum amount of revenue. Also, be sure to get travel agents on side and get them to book your flights as their first choice, perhaps sell them the tickets at a reasonable fixed cost and allow them to set their own commissions, but also be sure that you do NOT undercut them with your own direct ticketing office or internet presence, they will support you better if they don't feel that you're trying to do away with them. Also, exploit the pro-competition sentiment people have, try to get them to book with your airline as a statement that they like to maintain competiton.

Another thing. About in-flight service. As a regional carrier you won't offer meal service or anything, but I think beverages (not alcohol though, too expensive) and light snacks in flight would be a good touch, as well as newspapers. You won't have time for much more on short flights, but certainly little things do make a difference to your passengers. As a small carrier you can afford to do a few small extras, like fresh cookies or something, and serve drinks in actual glasses, not plastic, the big carriers like to cut corners slightly with this and it irritates passengers although for those megacarriers putting one less peanut in the package can save them millions of dollars a year...

Now, about names. In that market be sure to choose a bilingual name, and try to make it sound like a traditional carrier- you want a name that inspires confidence and not something that sounds like a low-fare carrier, either.

Now, on to the aircraft question more directly. J31's are OK for short hops, in my view, and I don't mind flying them, but they're not great for flights of over 30-40 minutes unless the price is right. Beech1900's are fairly nice, and because they only have 19 passengers you wouldn't need to have flight attendants, but they're smaller, and may or may not have reasonable costs for your type of operation, you'll have to find that out. Saab340's aren't very popular in Canada, but I think they have a lot of potential as the Saab name has some appeal, they may have reasonable comfort (never flown one, but they look OK to me) and depending on the economics of the aircraft it could be good. The Dash8 has the advantage of being biggest, is reliable and durable, good comfort, overhead bins, overall good airplane but it's exactly what AirNova and AirOntario fly (maybe being different would be good) and you should study it's economics.

When selecting an aircraft also check on the weights. I believe YHU has a maximum weight on some taxiways so that could also be a factor.

Sorry it was so long and somewhat off topic from what you were interested in, but I had some ideas I thought might be of interest. Most you are probably aware of, but I don't think it hurts to mention this stuff. Regards,

Posts: 222
Joined: Tue Dec 21, 1999 11:03 am

RE: Operating Costs For A Beech, Saab, Dash...

Thu May 25, 2000 11:02 am


It was very useful comments.

Matt, you give me interesting point specially for the routes...YQB-YHU-YTZ. If your are interested, we can keep in touch for the next developpement.

I forwarded your comments to my partner.

'Never let Ac alone'


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