rominato
Posts: 258
Joined: Sat Nov 27, 1999 12:18 pm

Starting A New Airline?

Fri Mar 16, 2001 11:09 am

So, generally speaking, what does it take, besides a lot of capital, to start a new airline? There are some potential routes that I would fly on a semi regular basis, but nobody operates them. Well, not directly anyway. I always wonder what it would be like to just start on a route and see what happens. Could it happen that another airline could be built up again the way Southwest originally was built? Might something like that happen in today's environment? Where would one start? Is there any recommended reading?
 
Guest

RE: Starting A New Airline?

Fri Mar 16, 2001 11:17 am

There are so many books to read, ranging from MicroEconomics, Principles of Marketing, Law, FAR, and so on! You so far have indentified a market, you have to do some consumer research, market research, economical research and so on to see if the market is b! Yig enough for your success. You will also need to create a business plan with all the information above, Business Plans for Dummies is actually quite a nice book! A company like Southwest could start again, however Southwest indentifies a consumer need (low prices), and built on that, although you might think that the consumer need is to get from point A to point B, that will limit your size, and will not allow you to be competitive with the larger carriers.
I hope that help a bit, any more questions feel free to ask!
Ian
 
JETPILOT
Posts: 3094
Joined: Tue May 18, 1999 6:40 am

RE: Starting A New Airline?

Fri Mar 16, 2001 11:36 am

The first and only place to start is at your local FSDO (Flight Standards District Office).

You will need to draw up company operation specifications, and a general operating manual all to be approved by your FSDO to issue an operating certificate.

You will have a POI assigned (Principle Operating Inspector) who will be your liason with the FAA.

Once you have your operating ceretificate you need to aquire an airplane and a crew. Train them in an approved training course as specified in the, you guest it, company GOM.

Pay the crew, they fly the plane, plane makes money.

Now factor in fuel burn, load factors, route structures, slot purcahses, bases of operation, labor disputes, fuel prices, economics, aircraft maintenance, accidents and incidents, FAA random inspections, Airworthiness directives, and you have yourself an airline.

If no one operates a certain route that should tell you something. Airlines are looking to make money if there is no money to be made in a certain market then there won't be service.

A good example is the new Pan Am. In Ten years they will be exactly as big as they are now. The market they are serving is just short of non existant.

There's so little money to be made that no competition has even stepped up to bat as cometition.

JET
 
Guest

RE: Starting A New Airline?

Fri Mar 16, 2001 11:49 am

>>The first and only place to start is at your local FSDO (Flight Standards District Office)<<

Not at all, firstly you need to indentify a market, and research it to see if it will be profitable (as I wrote above). If it is not there is no point going to the FAA, and start that work! After you do that, and you have a plan of action, that looks like it will work on paper, you have to start getting the team together, these people will range from people who know how to get teh certificate, to people with great marketing experience, a lawyer would also be a good person, ect. Once you have all of that you can start thinking about going to the FAA, looking for a plane, getting in teh media spot light and so on!
Iain
 
deltaflyertoo
Posts: 1479
Joined: Tue Nov 14, 2000 3:18 pm

RE: Starting A New Airline?

Fri Mar 16, 2001 3:19 pm

It all sounds easy, but the reality is you need a minimum of 25 million U.S. dollars in capital to be looked at by the FAA, furthermore the FAA is pending hundreds of applications for startups as we speak, we all know the answer of how many actually get the approval and take flight.

 
airtoday
Posts: 32
Joined: Thu Nov 30, 2000 10:19 pm

RE: Starting A New Airline?

Fri Mar 16, 2001 6:31 pm

I know it's not quite on topic but it reminds me of an anecdote from Richard Branson.

He was once asked by a young enthusiast how best to become a Millionaire?

He replied "Become a Billionaire and then start up an International Airline".
 
Guest

RE: Starting A New Airline?

Fri Mar 16, 2001 10:10 pm

Airtoday:
>>He replied "Become a Billionaire and then start up an International Airline"<<
That sounds like Richard Branson, nothing about hardwork or doing homework, like most people would include. It is all me me me when Richard is talking!
Iain
 
deltairlines
Posts: 6877
Joined: Mon May 24, 1999 4:47 am

RE: Starting A New Airline?

Sat Mar 17, 2001 12:08 am

Branson is just pure genius. The more money you have for an airline, the better. Neeleman at JetBlue started his airline with $180 million in capital, which was a record. If you are looking to start an airline, you first have to look at his track record.

Jeff
 
stephen007
Posts: 150
Joined: Tue Mar 28, 2000 1:21 am

RE: Starting A New Airline?

Sat Mar 17, 2001 2:09 am

i am greatly appalled by Iainhol's remarks on Sir Richard Branson. Of what grounds do you justify that Branson being "nothing about hardwork or doing homework, like most people would include." and "It is all me me me when Richard is talking!"??

Branson's entry into the airline business in 1984 was in fact after studying the market conditions for trans-atlantic travel. At that time, no one could fly across the pond for their money's worth. BA (most significantly) , AA and UA during the early eighties had a virtual monopoly on the LHR - JFK and LHR - Newark routes. Does anyone remember the demise of Sir Freddie Laker's Laker Airways? Before 1977, the cheapest transatlantic fare was 196 pounds. then enter Laker who offered a mere 59 pounds for a ticket. Soon after with much "dirty tricks" and "goverment policies" between Thatcher and Reagan Administration to protect their national carriers, Laker was liquidated.

thanks to Branson and his dare-devil wits to enter the transatlantic routes to compete with the giants. who would EVER thought of doing just that, to the faint-hearted, it is suicidal. Branson's Virgin Atlantic introduced innovative firsts in British aviaition history. While BA claims they are the "World's Favourite Airline" based on passenger loads, Branson went on to build the "World's Best Airline" based on the passengers' choice and service. And that was against all odds set up by the giants.

Does anyone remembers BA's dirty tricks like poaching of Virgin's passengers? it was to the extent that BA staff impersonated Virgin staff to encourage VS pax to switch to BA on a free upgrade, con VS pax on wrong information, and an all-out campaign to smear VS's reputation and credibility among the general public and its shareholders and access secret files about VS operations at airports......all this are masterminded by BA's HIGH LEVEL staff.

And the rest is history, why did you think Lord King resigned from BA as Cheif executive in 1993? remember all the anti-trust law-suits, the compensation for losing the case?

Richard Branson's Virgin Atlantic was valued at over 1.2 billion pounds when he sold a 49% stake to SIA in 1999. This was an extra-ordinary achievement for an airline that began life in 1984 with ONE rented B747-200. Virgin Atlantic became one of the world's top airlines only after surviving an incredible dirty tricks campaign by British Airways.

So Iainhol and all the VS skeptics, i think Branson deserves more than being slammed an "outrageous madman with a fetish for ballooning" and "business genius out of pure luck".

Look how he transformed air travel. If not, i think you would be paying millions over a transatlantic fare on some sucky national carrier that has monopolised the entire market at the expense of the general public. Without him, i don't ever think there would ever be affordable prices. Without him, i doubt there would be any competition in Britsh avaition.


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stephen
Singapore

 
Guest

RE: Starting A New Airline?

Sat Mar 17, 2001 4:03 am

Stephen you obviously have no clue about the start of Virgin Atlantic!
Virgin Atlantic was not Richard Brasons idea at all, I gentleman by the name of Field's was in the planning stage of an airline called 'British Atlantic'. He noticed a the whole in the market, while trying to book a ticket on PeoplExpress, and was unable to get through for hours.
He created the plans and got thing going. He contact Richard Branson about funding the project. Well the ball got rolling, and Richard put in a bit of money, for a stake in the airline, and the more and more work Fields did, the larger stake Richard would demand or he threatend he would pull out! If I remember right when VS got flying Richard owned 70% of it. That seems pretty pretty unfriendly on Richard behalf to me!
Richard also demanded that Virgin was in the name!
So basically he did not start Virgin Atlantic he stole it!
BA dirty tricks helped Branson out in the long run more then you will ever believe! It got Virgin more minutes of free prime airtime on the television and radio then they would have ever been able to afford!
Branson is far from a genius, he used to be beat atleast once a week by his teachers for be dumb. He got expelled from one school for getting with the headmasters daughter! However the next day after threatening suicide the let him back in.
When he went to Stowe, he had a girlfriend (who used to smoke pot the whole time) who lived in the woods, and while he went there he only did one 'A' level in History!
An airline was not the only thing he stole, he also had a bad acid trip when he was living with his girlfriend in her houseboat, he had pictures of her as the little red devil. We the next day she was no longer staying in her house boat.
He got done for tax frawd when Virgin record stores just opened. He used to smoke pot with bands when they where digned up for Virgin records. He cheated on his first wife, with his current one!
But the best Richard story is the first time he got with a girl, he thought he was doing great, however she was having an Asthma attack!
Virgin and Richard Branson got off on a lucky foot, to allow him the ablility to hire to people who know what they are doing and make good decisions, Richard basically does PR work which he is quite good at however I think people are getting sick of him, and the Virgin enterprise. Virgin does not stand for what it used to, right now it is nothing special.
Have you ever read an unauthorised book about him, it paints a very different pitcure. Richard Branson is one man I would never want to do business with!
Iain
 
Guest

RE: Starting A New Airline?

Sat Mar 17, 2001 4:59 am

>>but the reality is you need a minimum of 25 million U.S. dollars in capital<<
2 things.
If you have a good idea 25 million is easy to find.
Second not every airline my old boss had a FAR 135 certificate for his corporate aircraft, and it did take some work to get, but not too much!
Iain
 
AeroGlobeAir7
Posts: 569
Joined: Wed Jan 24, 2001 12:09 pm

RE: Starting A New Airline?

Sat Mar 17, 2001 7:52 am

Really what you have to do is much the same as Virgin Atlantic's way of doing things. I believe this is how most startups do things. First you have to pick the most popular destinations from your headquarters. For instance from Kansas City. Some popular Kansas City routes are to......

LAX
LAS (the most popular WN route out of MCI)
ATL
JFK
ORD
DFW
MCO
MSP etc.

You then try to nail those routes. Taking them one at a time, then, as you earn more money and get larger your options for routes open up more. I'm just a pilot to be, but this is how it seems like they do it. Virgin Atlantic recently completed their goal of flying routes to the top 20 destinations out of London Heathrow. The final route they began offering is LHR-YYZ.

 
DELTA777
Posts: 637
Joined: Tue Mar 07, 2000 6:34 am

RE: Starting A New Airline?

Mon Mar 19, 2001 4:39 am

Anyways... back on to the subject, is the process and certificates different for a small commuter airline or Cargo only airline?

D e l t a 7 7 7
 
Guest

RE: Starting A New Airline?

Mon Mar 19, 2001 4:47 am

The difference lies if you operate under FAR 135 which is charter or FAR 121 which is scheduled.
Iain
 
Guest

RE: Starting A New Airline?

Mon Mar 19, 2001 4:49 am

Hmmm...

Interesting proposition... I'll start an airline with you, it could be called Dominatrix Airlines, where the F/A's are all hot women wearing tight leather and chains and whips. The pilots would have to... oops... did I type that?  Smokin cool

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