777way
Topic Author
Posts: 6470
Joined: Mon Dec 05, 2005 1:38 am

Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 10:03 am

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.
 
IndianicWorld
Posts: 2806
Joined: Mon Jun 04, 2001 11:32 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 10:07 am

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.
 
777way
Topic Author
Posts: 6470
Joined: Mon Dec 05, 2005 1:38 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 10:14 am

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?
 
IndianicWorld
Posts: 2806
Joined: Mon Jun 04, 2001 11:32 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 10:19 am

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.
 
777way
Topic Author
Posts: 6470
Joined: Mon Dec 05, 2005 1:38 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 10:32 am

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.
 
Bongodog1964
Posts: 3095
Joined: Wed Oct 18, 2006 6:29 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 10:37 am

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.
 
777way
Topic Author
Posts: 6470
Joined: Mon Dec 05, 2005 1:38 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 10:52 am

Do EY and QR fit the same as EK?
 
justinlee
Posts: 323
Joined: Wed Aug 29, 2012 3:08 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 11:41 am

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]
 
JoKeR
Posts: 1759
Joined: Sat Nov 13, 2004 12:34 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 12:23 pm

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?
 
stylo777
Posts: 2000
Joined: Mon Feb 13, 2006 7:32 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 12:51 pm

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?
 
SpaceshipDC10
Posts: 4463
Joined: Tue Jan 01, 2013 11:44 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 1:16 pm

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.
 
User avatar
3rdGen
Posts: 282
Joined: Wed Jul 13, 2011 7:19 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 1:44 pm

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.
لا اله الا الله محمد رسول الله
 
777way
Topic Author
Posts: 6470
Joined: Mon Dec 05, 2005 1:38 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Sun Mar 03, 2013 3:34 pm

Quoting JoKeR (Reply 8):

But arent there many who started off with new fleets and are still around and doing good too.
 
strandedinbgm
Posts: 250
Joined: Wed Jul 11, 2007 2:58 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 12:16 am

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 avatar
lightsaber
Crew
Posts: 11864
Joined: Wed Jan 19, 2005 10:55 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 3:37 am

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
"They did not know it was impossible, so they did it!" - Mark Twain
 
User avatar
Fly-K
Posts: 2994
Joined: Thu May 04, 2000 4:26 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 8:40 am

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...
 
Bongodog1964
Posts: 3095
Joined: Wed Oct 18, 2006 6:29 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 9:44 am

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.
 
leftyboarder
Posts: 744
Joined: Sun Apr 13, 2008 3:38 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 10:39 am

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.
 
ASA
Posts: 1006
Joined: Thu Dec 02, 2010 5:12 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 6:18 pm

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 avatar
lightsaber
Crew
Posts: 11864
Joined: Wed Jan 19, 2005 10:55 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 6:34 pm

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
"They did not know it was impossible, so they did it!" - Mark Twain
 
ytz
Posts: 3036
Joined: Thu Jun 25, 2009 12:31 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 7:55 pm

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.
 
winginit
Posts: 583
Joined: Sat Feb 23, 2013 9:23 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 9:31 pm

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.
 
anstar
Posts: 2870
Joined: Sun Nov 23, 2003 3:49 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 9:39 pm

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 avatar
airzim
Posts: 1216
Joined: Wed Jun 20, 2001 7:40 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 9:49 pm

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.
 
Viscount724
Posts: 19046
Joined: Thu Oct 12, 2006 7:32 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 9:52 pm

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.
 
777way
Topic Author
Posts: 6470
Joined: Mon Dec 05, 2005 1:38 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Mon Mar 04, 2013 9:55 pm

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 beginnings considering the ego driven region they belong to, one would have imagined nothing less than the newest and in a large number would do.

[Edited 2013-03-04 14:18:02]
 
ASA
Posts: 1006
Joined: Thu Dec 02, 2010 5:12 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Tue Mar 05, 2013 1:40 am

Quoting 777way (Reply 25):

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 beginnings considering the ego driven region they belong to, one would have imagined nothing less than the newest and in a large number would do.

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 ... DAC now has 21w (TRIPLE DAILY) 77W service ... just unbelievable!
 
RyanairGuru
Posts: 6554
Joined: Wed Nov 01, 2006 3:59 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Tue Mar 05, 2013 1:46 am

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

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 the only one.
Worked Hard, Flew Right
 
Viscount724
Posts: 19046
Joined: Thu Oct 12, 2006 7:32 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Tue Mar 05, 2013 1:51 am

Quoting RyanairGuru (Reply 27):
Quoting 777way (Reply 12):
But arent there many who started off with new fleets and are still around and doing good too.

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 the only one.

I believe all except a few Virgin America A319/320s were new.
 
FlyingAY
Posts: 408
Joined: Thu Jun 21, 2007 2:26 pm

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Tue Mar 05, 2013 3:09 am

Quoting RyanairGuru (Reply 27):

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 the only one.

What kind of history does Air Asia or Tiger Airways have? They have hundreds of planes on order at the moment... What about Jetstar?
 
RyanairGuru
Posts: 6554
Joined: Wed Nov 01, 2006 3:59 am

RE: Why Did EK, EY, QR Start Small And With Used A/c?

Tue Mar 05, 2013 5:33 am

Quoting FlyingAY (Reply 29):
What kind of history does Air Asia or Tiger Airways have? They have hundreds of planes on order at the moment... What about Jetstar?

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 subsequently bought new ones.

Jetstar launched with second hand 717s, Air Asia with second hand 737-300s.

Tiger Airways along with Virgin America is, however, one I forgot.
Worked Hard, Flew Right