sunking737
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California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 2:36 pm

I read on another web site that California Pacific has closed down before their first flight as they ran out of money.

Could their AOC be sold to Peoplexpress if they have shut down??
Just an MSPAVGEEK
 
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Polot
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 2:58 pm

Quoting sunking737 (Thread starter):
Could their AOC be sold to Peoplexpress if they have shut down??

They don't have a operating certificate as far as I am aware. They have until Feb. 25th to start operations or else their DOT authority is revoked-considering the DOT has already given them an extension to start I don't think they will allow any further extensions, so CP being dead would be no surprise.

[Edited 2013-02-01 06:59:46]
 
bohica
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 3:00 pm

Quoting sunking737 (Thread starter):
Could their AOC be sold to Peoplexpress if they have shut down??

I don't think so. PEX is looking for an AOC with the 737 in the operations specifications. It would not be worth it for PEX to buy CPA's AOC and then spend the money to get the 737 added to it.

BTW did CPA even have their AOC? I thought there was something that was holding up the AOC or am I thinking of something else? I know there has been several delays in CPA's startup.

Edit: It looks like polot answered my question while I was typing this.  

[Edited 2013-02-01 07:02:14]

[Edited 2013-02-01 07:02:51]
 
sunking737
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 3:02 pm

Quoting bohica (Reply 2):
BTW did CPA even have their AOC? I thought there was something that was holding up the AOC or am I thinking of something else? I know there has been several delays in CPA's startup.

I believe that they had the DOT blessing, but the FAA was the hold up in getting ops going.
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LAXintl
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 4:37 pm

For years now they have been talking about launching private prospectus to generate the needed funding prior to start up. Looking back at old threads they even once hoped to have $32mil in place by October 2010 !
As of September 2012 they still seem to have been at square one, just having retained another NYC firm to walk around with the tin can trying to sell shares.

So besides Ted Vallas hawking his condo as collateral, and some locals throwing some trust fund money in, without the real dough in the bank there is no chance of flying.

In the mean time they took delivery on one E170 for PR sake that is burning a ~$175,000 monthly hole to cover lease rates and insurance.
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catiii
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 6:49 pm

I've heard the same information as the above, and in addition I've heard that their operations team bailed out over the summer.
 
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hOMSaR
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 7:22 pm

A photo of everyone who is surprised that this airline isn't going to fly:

The plural of Airbus is Airbuses. Airbii is not a word, and doesn't even make sense.
 
PSAjet17
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 7:58 pm

Quoting sunking737 (Thread starter):
I read on another web site that California Pacific has closed down before their first flight as they ran out of money.

Can you provide a link to this story you read on another website?
 
RDUCO
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 8:20 pm

how much $$ should someone have to start an airline (regional). I remember someone about 10yrs ago that tried to start a regional carrier out or SRQ (think it was called FLair). they did start flying for a short time but I believe the carrier ran out of $$. Just curious, how much one should have to go from nothing to flying?
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beeweel15
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 8:52 pm

Just looked at their website it is still up and running.

Quoting rduco (Reply 8):
Just curious, how much one should have to go from nothing to flying

I would say $5 to $10 million minimum but I might be wrong
 
71Zulu
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 8:56 pm

No matter what kind of business you are thinking of starting up, you need cash and lots of it, lack of startup money is gotta be the number one cause of failure for any new business.

How much cash did B6 have when they started? It was quite a bit if I remember right.
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dxBrian
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 9:18 pm

There are so many variables that it is hard to give a good answer. A large part of the costs is having enough money on hand to operate your proposed schedule for 90 days without any revenue. Shorter routes will have less fuel cost for a given airplane. Smaller airplanes use less fuel for a given route and the landing fees are also less. A low number of flights means you burn less fuel. Then you need to consider the monthly cost of the airplane? Some aircraft may have low acquisition cost but the parts may be expensive. How much flying are you going to do? More flights means more crews means higher costs. Are you going to do power by the hour? Are you going to operate under supplemental rules or domestic rules? Are you going to have your own maintenance or contract maintenance? Where is your headquarters- that will affect costs.

Morris Air was a pretty unique operation. Sierra Pacific and Ryan International operated the airplanes on routes chosen by Morris. Morris also provided the airplanes. The crews were hired with the understanding that if the venture worked they would ultimately work for Morris. So when they started to pursue their certificate, they already had all the manuals and procedures laid out. They had proven revenue. I think we got certified with only two or three airplanes, and then added crew and planes as quickly as we could get the crews trained as "Morris Air Service" crews instead of Ryan or Sierra Pacific crews.
 
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 9:18 pm

Listed on the FAA Air Carrier Operational Certificates

http://www.dot.gov/sites/dot.dev/files/docs/Cert_Carrier_List_0912.pdf


CARRIER TYPE OPERATING
Carlsbad-Palomar Airlines, Inc. DS NO/NE
(DS Domestic/Scheduled)
(Operating-NO / NE Not Yet Effective)

In the list of applicants Carlsbad-Palomar Airlines, Inc. is listed with Theodore Vallas as President. (Last updated 08/2010).
The list of Certified Air Carriers also lists Carlsbad Palomar Airlines but with Lawrence Sittig as President (Last updated 09/2012).
 
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 9:35 pm

Quoting beeweel15 (Reply 9):

Quoting rduco (Reply 8):
Just curious, how much one should have to go from nothing to flying

I would say $5 to $10 million minimum but I might be wrong

I seem to remember JetBlue reaching about $130mil in backing and $30mil cash on hand before beginning ops on Feb 11, 2000 (I only remember the date because it's my birthday!). B6 people may know the numbers better than I do, but they did a sh*tload of fundraising before they got going. Granted they were taking delivery of brand new airplanes out of JFK and wanted to make a real go of it, but $30mil in 2013 dollars is close to $40mil.

If I were starting a small airline with E170s, I wouldn't even look at leasing an airplane until I had about $15mil cash. Anything less and it's destined for failure, because most start-ups won't become profitable until 1-2 years after launch...that is, if they become profitable at all. Airlines need enough cash and backing to survive the first two years because they have to assume they'll be loss-making.
 
LAXintl
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 9:41 pm

At the time (August 2011) the DOT financial fitness test determined they would $11.9 million free and clear in the bank prior to launching service in addition to about $7.4 million in pre-operating expenses they would need prior to commencing revenue operations. It was estimated they would incur $28.0mil in expenses within the first 12-months.

For this as I posted in Reply 4, they had indicated they were trying to drum up $32mil in equity.
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BMI727
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 9:50 pm

Quoting rduco (Reply 8):
how much $$ should someone have to start an airline (regional).

As much as possible. You can't buy success, only more time of being unsuccessful before becoming a failure. As far as airlines go, you cannot have too much capital, but no number can guarantee success.

Quoting 71Zulu (Reply 10):
How much cash did B6 have when they started? It was quite a bit if I remember right.

I want to say somewhere in the $60 million range. It helped that they knew what they were doing, which had a lot to do with how they were able to find that kind of capital in the first place.
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LAXintl
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 9:57 pm

Reference JetBlue, it was at the time the best capitalized start up in history.

David Neeleman managed to raise $130.2 million start-up capital much of it from venture capital or equity firms.

Chase Capital Partners $20 million
Multiple George Soros funds $40 million combined
Western Presidio - $30mil
Banc Boston Ventures - $10mil
Massachusetts Mutual Life - $10mil
Nationsbank Montgomery Securities -$10mil
David Neeleman invested $10.2 million.
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connies4ever
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RE: California Pacific Closed Before Start UP (Rumor)

Fri Feb 01, 2013 9:58 pm

Quoting 71Zulu (Reply 10):
No matter what kind of business you are thinking of starting up, you need cash and lots of it, lack of startup money is gotta be the number one cause of failure for any new business.
Quoting dxBrian (Reply 11):
There are so many variables that it is hard to give a good answer. A large part of the costs is having enough money on hand to operate your proposed schedule for 90 days without any revenue.

Agreed, usually referred to in management as overcoming "barriers to entry". You need lots of $$$ to cover all your startup costs such as regulatory and so forth, your marketing, which needs to separate your product from the pack, and then as dxBrian says, operate for some period as though you are taking in no $$$. Anything brought in is gravy.

I was president of a golf course 97-01, and when we budgeted, we planned on zero April and October revenue,and put forth a budget to the membership on that basis that was in balance (this is Western Canada, where winter can last long and come early). Any April or October revenue was gravy. 1999, very favourable weather, we opened April 9, and our club pro put out a very nice incentive rate which brought in about $30k (this is a small club but challenging course). October was good as well. At the spring meeting the next year with an audited statement we were able to show not 'in balance", but a net of $200k, which went down very well with the members. Thank you, weather gods.

Seems like CalPac didn't factor this in.
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F9Animal
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 1:52 am

There was a CP exec that came here often. I have not heard from him since? Sunking, can you share which site you saw this at?
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cschleic
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 2:26 am

Quoting BMI727 (Reply 15):
It helped that they knew what they were doing, which had a lot to do with how they were able to find that kind of capital in the first place.

Yes, Neeleman had proven history at Southwest, Morris and WestJet. Plus unused capacity at JFK and a huge population base made for a good business case.
 
BMI727
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 3:15 am

Quoting cschleic (Reply 19):
Yes, Neeleman had proven history at Southwest, Morris and WestJet. Plus unused capacity at JFK and a huge population base made for a good business case.

Having groundwork laid during the height of venture capital didn't hurt either. Of course now people know better, especially when it comes to airlines.
Why do Aerospace Engineering students have to turn things in on time?
 
sunking737
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 3:31 am

Quoting F9animal (Reply 18):
Sunking, can you share which site you saw this at?

A friend of mine who writes manuals for airlines. Very trusted person. (Through Facebook)
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atcsundevil
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 11:04 am

Quoting sunking737 (Reply 21):
A friend of mine who writes manuals for airlines. Very trusted person. (Through Facebook)

Hopefully your friend isn't named Lennay Kekua..   
 
PSAjet17
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 2:54 pm

Quoting sunking737 (Thread starter):
I read on another web site that California Pacific has closed down before their first flight as they ran out of money.
Quoting sunking737 (Reply 21):
A friend of mine who writes manuals for airlines. Very trusted person.

Sunking737: I'm confused now. Did you see this story on another website as you stated in the first post or did you hear it from your friend who writes airline manuals?
 
sunking737
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 3:17 pm

Quoting PSAJet17 (Reply 23):
Quoting sunking737 (Thread starter):
I read on another web site that California Pacific has closed down before their first flight as they ran out of money.
Quoting sunking737 (Reply 21):
A friend of mine who writes manuals for airlines. Very trusted person.

Sunking737: I'm confused now. Did you see this story on another website as you stated in the first post or did you hear it from your friend who writes airline manuals?

There is no link as I was PM on my Facebook page by her. She is a very trusted source of information. She has to sign NDA with clients. She couldn't say anything unless they closed.
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PSAjet17
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 6:40 pm

Quoting sunking737 (Reply 24):
There is no link as I was PM on my Facebook page by her. She is a very trusted source of information. She has to sign NDA with clients. She couldn't say anything unless they closed.

Thanks, Sunking737.

The last thing I saw about CPAir was a small piece in some smaller newspapers (Encinitas for one) that spoke about the plan to be operational early in 2013. Their website has no new information. I also saw somebody trying to contact their Corporate Communications Director asking him for a current email address (guess he is not answering his @flyCPAir.com address).

In March 2011, Lawrence Sittig (Western/Delta Airlines and also worked on startup of Skybus Airlines) was named as President and COO of CPAir, but is not listed on the FlyCPAir.com website in the management team section.
 
EMBQA
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 6:46 pm

I don't think their aircraft ever flew after the delivery flight
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commavia
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 7:13 pm

Quoting hOmsAR (Reply 6):
A photo of everyone who is surprised that this airline isn't going to fly:

Exactly. I realize there were a few people invested in this venture, but it was honestly a ridiculous concept from the start, and it's hardly unique (I'm looking at you, PeopleExpress). When are people going to learn that starting an airline isn't like starting a restaurant or shop?

Quoting rduco (Reply 8):
how much $$ should someone have to start an airline (regional).
Quoting 71Zulu (Reply 10):
No matter what kind of business you are thinking of starting up, you need cash and lots of it, lack of startup money is gotta be the number one cause of failure for any new business.

It's not just about having enough money. It's also about having a viable concept to begin with. There are surely plenty of ideas on earth that would go somewhere but for a lack of money, because they're just that good of ideas. And there are ideas, like this or PeopleExpress, where no amount of money thrown at it is going to compensate for outright stupidity. Flying large RJs configured in a low-density seating layout from a small regional airport is unlikely to be a long-term viable business. It doesn't take a rocket scientist to figure that out.
 
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mariner
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 7:23 pm

Quoting commavia (Reply 27):
I realize there were a few people invested in this venture, but it was honestly a ridiculous concept from the start, and it's hardly unique (I'm looking at you, PeopleExpress).

You may be right, but if they can find the money for it, go for it. Isn't that a function of capitalism?

Few people gave tuppence for Allegiant's chances when Maurice Gallagher first took it over, now everyone is wise - after the event.

I think California Pacific has a hard row to hoe, but I've been wrong before. In my (capital intensive) butts-on-seats business the rule of thumb is nine failures for every one success.

After all, American Airlines is only still flying by the grace of its creditors.

mariner
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Polot
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 7:29 pm

Quoting commavia (Reply 27):
Exactly. I realize there were a few people invested in this venture, but it was honestly a ridiculous concept from the start, and it's hardly unique (I'm looking at you, PeopleExpress). When are people going to learn that starting an airline isn't like starting a restaurant or shop?

I think PeopleExpress could succeed if they are careful and play their cards rights, but over all I agree with you. I had no faith in this project or its management the moment they initially announced they were going to equip their E jets with a 3(!) class cabin.
 
XEspecialist
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 7:30 pm

Bret Ebaugh and his wife Lisa Ebaugh were previously listed as Chief Pilot and Manager of Inflight Training respectively.

Information on both of them has been removed from the California Pacific website, yet Bret still lists his job as Chief Pilot on several networking sites as 'presently'.

They both worked for EOS at one point, and Bret also worked at Bombardier previously as the primary CRJ900NG liaison with Pluna and we know how that ended.

I do hope this airline succeeds though even if only to beat the odds and because I like their paint scheme. They have an uphill battle though.
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commavia
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 7:34 pm

Quoting mariner (Reply 28):
You may be right, but if they can find the money for it, go for it. Isn't that a function of capitalism?

The function of a capitalist market is to maximize capital. I'm all for people taking risks - it is inherently necessary in a capitalist system - but they need to be realistic risks. This was a stupid thing to risk capital on. This project has eaten up at least a few million dollars that could have been allocated more efficiently in the economy to something actually worth investing in.

[Edited 2013-02-02 11:39:36]
 
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mariner
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 7:39 pm

Quoting commavia (Reply 31):
The function of a capitalist market is to maximize capital. I'm all for people taking risks - it is inherently necessary in a capitalist system - but they need to be realistic risks.

I bought into Apple Computers when the shares were $12 each - and (everyone thought) headed for oblivion. I knew the ricks - and look at 'em now.

Quoting commavia (Reply 31):
This was a stupid thing to risk capital all, as this whole project has eaten up at least a few million dollars that could have been allocated more efficiently in the economy to something actually worth investing in.

That money goes into the economy anyway. It may or may not provide a return to the investors, but isn't that their business?

mariner

[Edited 2013-02-02 11:41:10]
aeternum nauta
 
commavia
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 7:46 pm

Quoting mariner (Reply 32):
I bought into Apple Computers when the shares were $12 each - and (everyone thought) headed for oblivion. And look at 'em now.

With respect, this idea bears no resemblance to Apple at any point in that company's history. Your investment in Apple was far better than any investment that was ever made in this venture.

Quoting mariner (Reply 32):
That money goes into the economy anyway.

The money ultimately goes into the economy, but it produces less return on its way through, and that is what is why this is suboptimal allocation of resources.

Quoting mariner (Reply 32):
It may or may not provide a return to the investors, but isn't that their business?

Well of course it's their business. Anybody is free to invest in whatever stupid idea they want. All I'm saying is that the net result of this particular stupid investment is that several million dollars was wasted when it could have been allocated elsewhere in the economy and ultimately produced greater returns overall.
 
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mariner
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 7:59 pm

Quoting commavia (Reply 33):
With respect, this idea bears no resemblance to Apple at any point in that company's history. Your investment in Apple was far better than any investment that was ever made in this venture.

No one else thought so then. Although many are wise after the event now, of course.

Quoting commavia (Reply 33):
The money ultimately goes into the economy, but it produces less return on its way through, and that is what is why this is suboptimal allocation of resources.

Anyone could have said the same about Allegiant - and many did. Five years ago, Spirit was being damned on a.net.

Quoting commavia (Reply 33):
All I'm saying is that the net result of this particular stupid investment is that several million dollars was wasted when it could have been allocated elsewhere in the economy and ultimately produced greater returns overall.

And some of the more interesting companies would never have been able to raise money.

mariner
aeternum nauta
 
XEspecialist
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RE: California Pacific Closed Before Start UP (Rumor)

Sat Feb 02, 2013 8:25 pm

Quoting commavia (Reply 31):
This was a stupid thing to risk capital on. This project has eaten up at least a few million dollars that could have been allocated more efficiently in the economy to something actually worth investing in.
Hold that thought...
Quoting mariner (Reply 34):
No one else thought so then. Although many are wise after the event now, of course.

I'm with Mariner on this one.

Commavia, using your values as to what constitutes an 'efficient' investment in the economy, FedEx shouldn't exist. Even at the time of its conception Fred Smith faced naysayers. In fact he received a 'C' on his paper outlining his concept from his professor at Yale. Little Rock Airport Authority thought he was nuts too, as he originally wanted to headquarters in Little Rock. This didn't stop him, and on April 17th, 1973, FedEx started operations. That first night, the fleet of 14 Dassault Falcon 20s carried the mind boggling load of 18 packages TOTAL!! Fred Smith could have thrown in the towel then but he didn't. Federal Express was losing a million dollars a month. It wasn't until 1976, 3 full years later that the new endeavor became profitable. With experts such as yourself calling the shots, Federal Express wouldn't have become the multimillion dollar powerhouse it is today.


Sure, the airline industry is a risky investment. So is the restaurant business. Thousands of restaurants close each year in the United States alone, yet that doesn't stop investors from opening new ones.

The bigger the risk, the greater the reward.

[Edited 2013-02-02 12:26:25]

-XEspecialist


[Edited 2013-02-02 12:27:14]
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F9Animal
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RE: California Pacific Closed Before Start UP (Rumor)

Sun Feb 03, 2013 5:17 am

I was hopeful this airline would make it, and still hopeful at this point. I trust you Sunking! I just hate to see Vallas dream not come true.  
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sccutler
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RE: California Pacific Closed Before Start UP (Rumor)

Sun Feb 03, 2013 11:12 am

Quoting mariner (Reply 28):
After all, American Airlines is only still flying by the grace of its creditors.

As are Delta, United, USAirways, Frontier, etc., each having benefited from the cleansing touch of the bankruptcy judge's decrees.

...

I still entertained the notion (apparently, delusional, it appears) that the venture could succeed; the staggering burden of traffic in the area seemed like a good motivator, but the capital markets seem not so interested.
...three miles from BRONS, clear for the ILS one five approach...
 
SocalApproach
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 1:15 pm

Not to highjack the thread but I was also looking forward to this startup. It reminded me of LV Air also. What has happened to them?
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rampart
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 1:53 pm

Quoting mariner (Reply 28):
Quoting commavia (Reply 27):
I realize there were a few people invested in this venture, but it was honestly a ridiculous concept from the start, and it's hardly unique (I'm looking at you, PeopleExpress).

You may be right, but if they can find the money for it, go for it. Isn't that a function of capitalism?
Quoting commavia (Reply 31):
The function of a capitalist market is to maximize capital. I'm all for people taking risks - it is inherently necessary in a capitalist system - but they need to be realistic risks. This was a stupid thing to risk capital on. This project has eaten up at least a few million dollars that could have been allocated more efficiently in the economy to something actually worth investing in.

In your opinion, Commavia. A group of smart people -- we have no corner on the market here on A.net -- also thought it was not ridiculous, was possibly realistic, and worth taking. I grow very tired of the negative know-it-alls, who are no smarter than the rest of us but still find it necessary to point out they were right given the luxury of 20/20 hindsight. So? I'll hand you a gold star, plant it on your forehead, you'll stand out that way. If aviation remained as risk-averse as Commavia would prefer... well, we'd not be flying. Or we'd not be flying across an ocean. Or on a jet. Or connecting airports that never existed before. Or...

-Rampart
 
PSAjet17
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 3:17 pm

I sent an email to Tom Morrow asking him about rumors that the airline was shutting down. Here is his reply:

Tom Morrow [tmorrow@flycpair.com]
Sent: Sun 2/3/2013 22:09

Rumors are untrue. We're still working on certification. We'll have more news soon.
Thanks for your interest.

(From the FlyCPAir.com website: Tom Morrow, who was the daily feature columnist for the Blade-Citizen/North County Times for 20 years and author of several novels and non-fiction books, is a CP Air board member and Vice President of Communications.)
 
ScottB
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 3:24 pm

Quoting LAXintl (Reply 16):
Reference JetBlue, it was at the time the best capitalized start up in history.

David Neeleman

Neeleman's involvement was critical to getting funding in place for the venture, as he had been June Morris' right-hand man and a co-founder of WestJet afterward. If you've managed to start two successful airlines, the investors are going to want to be part of any similar future endeavors if the business plan seems credible.

Quoting LAXintl (Reply 4):
For years now they have been talking about launching private prospectus to generate the needed funding prior to start up. Looking back at old threads they even once hoped to have $32mil in place by October 2010 !
As of September 2012 they still seem to have been at square one, just having retained another NYC firm to walk around with the tin can trying to sell shares.

IMO the problem has always been a large presence of the 800-lb low-cost gorilla of the industry at an airport less than 45 minutes of driving away, with an existing schedule that would be superior to what CP could offer.

Don't get me wrong -- I think they identified an interesting niche at CRQ/CLD. There is some portion of the population for whom that airport is more convenient, and some of those folks have wealth. But I can't think of many examples of successful suburban alternate airports based on convenience rather than low fares -- HPN is the only one which comes to mind -- and you don't have to cross the Whitestone Bridge to get from North County to SAN. Perhaps SNA, but then it was really built up by OC which was a low-cost, low-fare operator.

Quoting rampart (Reply 39):
A group of smart people -- we have no corner on the market here on A.net -- also thought it was not ridiculous, was possibly realistic, and worth taking.

Except clearly they haven't found outside investors willing to venture enough capital to move the project forward. I'm not sure it was ever possible to make a business case for an outcome that was strong enough to justify the risk to the capital. Just "not losing money" isn't enough, and a business that realistically maxes out at a half-dozen planes to a similar number of destinations from CRQ/CLD isn't enough, either.
 
sunking737
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 3:40 pm

PSAJet thanks for the update. When pushed more my "friend" started to back peddle and said they laid off some folks.
I now feel that I was mislead by her statements about CPAir. I am truly sorry for misleading everyone. My source I see is now longer "trustworthy".

I am a firm believer in underdog airlines. I do wish CPAir all the luck in finally getting airborne, and would love to fly them at some point in time.
Just an MSPAVGEEK
 
slider
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 3:44 pm

Vallas is a good man, but let it go.

He's accomplished much, but enjoy retirement already! This is a cockamamie scheme anyhow.
 
SANFan
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 5:32 pm

Quoting PSAJet17 (Reply 40):
I sent an email to Tom Morrow asking him about rumors that the airline was shutting down. Here is his reply:

Thank you so much for doing that PSA'. It's nice to see something "real" expressed in a thread such as this rumor-based one full of lots of opinions.

Quoting sunking737 (Reply 42):
PSAJet thanks for the update. When pushed more my "friend" started to back peddle and said they laid off some folks. I now feel that I was mislead by her statements about CPAir. I am truly sorry for misleading everyone. My source I see is now longer "trustworthy".

Hey sunking', don't beat yourself up. At least you identified this thread as a rumor -- which is more than a lot of threads here on A.net bother to do -- and the lack of any news from the company for a long time could certainly make people wonder... (To say nothing of a very fast-approaching deadline.)

Maybe this thread will "encourage" the company to release some sort of info to the press about what is going on. The public has a short memory and most will forget about this endeavor if CPAir doesn't bother to keep their name out there.

This start-up certainly remains an uphill battle and I continue to hope Ted and his team can make it happen! Best of luck to everyone involved.

  
bb
 
OB1504
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 6:48 pm

Quoting XEspecialist (Reply 35):
Commavia, using your values as to what constitutes an 'efficient' investment in the economy, FedEx shouldn't exist. Even at the time of its conception Fred Smith faced naysayers. In fact he received a 'C' on his paper outlining his concept from his professor at Yale. Little Rock Airport Authority thought he was nuts too, as he originally wanted to headquarters in Little Rock. This didn't stop him, and on April 17th, 1973, FedEx started operations. That first night, the fleet of 14 Dassault Falcon 20s carried the mind boggling load of 18 packages TOTAL!! Fred Smith could have thrown in the towel then but he didn't. Federal Express was losing a million dollars a month. It wasn't until 1976, 3 full years later that the new endeavor became profitable. With experts such as yourself calling the shots, Federal Express wouldn't have become the multimillion dollar powerhouse it is today.
Quoting rampart (Reply 39):
If aviation remained as risk-averse as Commavia would prefer... well, we'd not be flying. Or we'd not be flying across an ocean. Or on a jet. Or connecting airports that never existed before. Or...

The reason we remember cases like FedEx are because those are the very rare exceptions. Every day, similar business plans fail and we don't even discuss them because we know this the norm. Commavia is simply stating the truth that the odds are against this particular venture. If they manage to overcome them, great, but if they don't, it's no surprise.
 
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 7:03 pm

Quoting OB1504 (Reply 45):
Every day, similar business plans fail and we don't even discuss them because we know this the norm. Commavia is simply stating the truth that the odds are against this particular venture. If they manage to overcome them, great, but if they don't, it's no surprise.

It is the function of the FAA to decide if the intended business meets all the legal, operational, technical and financial requirements.

It is a not a function of the FAA to decide on the merits of a the business plan itself.

mariner
aeternum nauta
 
bennett123
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 9:13 pm

XEspecialist

"The bigger the risk, the greater the reward".

I fail to follow your logic.

AFAIK, there is no guarantee that if you take a crazy gamble, and it pays off then the rewards will be great.
 
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 10:12 pm

Quoting bennett123 (Reply 47):
AFAIK, there is no guarantee that if you take a crazy gamble, and it pays off then the rewards will be great.

There are no guarantees at all. Investing is a perpetual balance between risk and reward.

Cautious investors shun the big risks and thus miss out on the big rewards. BUT - they stand less chance of losing their money. The safest investments are called "widows and orphans" stocks - a good place to invest money for future protection of the capital, and thus the investor.

Daring investors (especially venture capitalists) will take enormous risks, knowing in advance that many of their bets will go down in flames.

But then, every so often, one risky investment takes off and gives them fabulous rewards.

mariner
aeternum nauta
 
LAXintl
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RE: California Pacific Closed Before Start UP (Rumor)

Mon Feb 04, 2013 11:32 pm

Quoting PSAJet17 (Reply 40):
Rumors are untrue. We're still working on certification. We'll have more news soon.

What we will need to hear soon, is another pleading to the DOT to extend their start-up authority timeframe.

They are already living on borrowed time and as the DOT previously stated they typically do grant further extensions unless they truly feel the applicant was making appropriate progress and things were indeed lining to launch service imminently.
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