I remember several years ago a startup called "MAXjet." They operated Transcon and TATL, all business class (which seems like a bad idea in itself) with a fleet of 767-200s.

They were dead within 4 years after filing for Ch.11.

That got me to thinking. There are always new airlines starting up with 737s or A320s. Is it unwise to startup with widebodied jets, like the 787, A330 or 777?

Oasis Hong Kong didn't last long either.

Quoting Boeing778X (Thread starter): Is it unwise

It's not unwise, you just need a big money buffer to begin with. According to AirAsia it takes about 12 months to break even on operating costs with a brand new A330 jet. So you're going to start with a big loss.

Yes because You can go Anyplace in the USA even hawaii with a 737 so why mess with anything else

Quoting Rara (Reply 1): Oasis Hong Kong didn't last long either.

I think initial low fares are one of the things that killed Oasis.

Quoting Boeing778X (Thread starter): That got me to thinking. There are always new airlines starting up with 737s or A320s. Is it unwise to startup with widebodied jets, like the 787, A330 or 777?

It's unwise to make generalizations like that. Virgin Atlantic Airways was a start-up using widebody jets. So were the ME3.

Quoting Boeing778X (Thread starter): I remember several years ago a startup called "MAXjet." They operated Transcon and TATL, all business class (which seems like a bad idea in itself) with a fleet of 767-200s.

Well all business class doesn't always work. BA works well from LCY and I can't comment on Openskies.

Quoting Boeing778X (Thread starter): That got me to thinking. There are always new airlines starting up with 737s or A320s. Is it unwise to startup with widebodied jets, like the 787, A330 or 777?

Scoot started with a 777 and they appear to be doing well.

Quoting drgmobile (Reply 5): Virgin Atlantic Airways was a start-up using widebody jets. So were the ME3.

Hm. That's very true.

Quoting Cipango (Reply 6): Scoot started with a 777 and they appear to be doing well.

Wasn't it SQ who made Scoot?

A start up where ?? EK did well in DXB as a start up . It's like asking what car to buy are you a Shiek or a Billionare or a college student with no job makes a difference.

Quoting drgmobile (Reply 5): So were the ME3.

EK started with an A300 and B737 at the same time and were Government backed - they weren't going to run out of cash, or be allowed to fail! QR and EY were also backed by giant amount of money.

Quoting Boeing778X (Reply 7): Wasn't it SQ who made Scoot?

Yes, Scoot are SQ

Quoting Boeing778X (Thread starter): That got me to thinking. There are always new airlines starting up with 737s or A320s. Is it unwise to startup with widebodied jets, like the 787, A330 or 777?

For most new airlines, cash is finite. With limited funds, you're going to buy a cheap aircraft. What's cheap? Something in large supply, so probably an A32S or B737. You need to build up experience, a network, and a brand. Jumping straight in with a large aircraft is a massivr risk, compared to the big risk with a smaller plane.

Almost every business is hostage to outside events. Oasis may have succeeded if it started up during an economic boom rather than right at the cliff of the crisis. '07 was a bad year for everyone.

Quoting gabrielchew (Reply 9): EK started with an A300 and B737 at the same time and were Government backed - they weren't going to run out of cash, or be allowed to fail! QR and EY were also backed by giant amount of money.

The question was whether or not it is unwise to start up with widebodies. It is unwise to make generalizations like that. There are many factors at play in determining success or failure of a prospective carrier, including financial backing.

[Edited 2015-03-06 12:18:27]

You start with whats available, does the job, is cost-effective to buy and operate, and can be funded.

In the 60's and 70's, international freight airlines started with the DC8 and 707. Today they would start with a used wide body.

A new passenger start-up will find it easier to source finance for narrow rather than wide body aircraft, unless they have shareholders wit deep pockets.

Boeing was previously more risk averse, so had less than it's market share of start-ups, but now uses it's own finance operation where the market fears to tread.

The biggest cause of start-up failure used to be blamed on over optimistic predictions, when in reality, it's anti-competitive behaviour by competitors.

Quoting Boeing778X (Reply 7): Hm. That's very true.

I'm pretty sure that EK started up using a leased 727...

Did Laker start up with DC-10s or did they start out with 707s? I can't remember. But they did ok, for a while.

I remember seeing Presidential A300s in ATL and I don't recall them lasting very long.

Quoting Boeing778X (Thread starter): I remember several years ago a startup called "MAXjet." They operated Transcon and TATL, all business class (which seems like a bad idea in itself) with a fleet of 767-200s. They were dead within 4 years after filing for Ch.11.

The 767-200 was the minimum frame that could reasonably perform the mission they wanted (especially on TATL). That they choose to compete on some of the most-contested premium cabin markets on the planet likely did far more to send them into bankruptcy then the equipment they employed.

Lion Air subsidiary Batik Air was initially planned to start with 787-8s and LionAir subsequently ordered the A330-300 for the role (the subsidiary actually started operations with the A320 and 737NG).

Quoting AA777223 (Reply 13):

The ex-PIA A300 and 737 came first, closely followed by two used 727s

Quoting Cipango (Reply 6): Scoot started with a 777 and they appear to be doing well.

Not quite, they made losses in the first 2 years of operation.

http://business.asiaone.com/news/sco...s-25m-two-years-amid-crowded-skies

Quoting Boeing778X (Thread starter): I remember several years ago a startup called "MAXjet." They operated Transcon and TATL, all business class (which seems like a bad idea in itself) with a fleet of 767-200s.

Maxjet failed for a number of reason, the type of aircraft used wasn't one of them, though the actual aircraft had a part in it, they managed to source some of the most unreliable 762's out there.

Flying JFK-STN was the main thing.

Maxjet marketed themselves as a business class airline, when in fact they were a very good premium economy airline, everyone and their brother knew this, so, those that flew business class were trapped by company contracts and FF loyalty. Flying into an airport that really only worked for those in the area of STN. Some argued that the train service mitigated that fact, it didn't, it sucked making the haul across London, the fact that they were never able to charge a real business class fare should have told them that, I was paying around $800 round trip all in, honestly, I would have payed double that, I miss Maxjet.

Also of course, picking a route (JFK-LON) where you have 3 airlines (AA,BA and VS) who will fight you tooth and nail for every business passenger and they couldn't figure out they couldn't compete.

If they had flown into LGW and marketed themselves as a Premium Economy airline they would have done well, also, considering they jumped on the LAS-STN route when their only competition was VS, they would have done well just on that route.

Anyways, yes you can start an airline with only wide bodies, you would have to identify routes that are underserved, the majors will not fight you on and you earn a decent yield.

Quoting SYDSpotter (Reply 17): Not quite, they made losses in the first 2 years of operation. http://business.asiaone.com/news/sco...s-25m-two-years-amid-crowded-skies

Don't airlines take a few years to break even?

Quoting DDR (Reply 14): Did Laker start up with DC-10s or did they start out with 707s?

Neither. GK started with Bristol Britannia, later replaced by BAC One-Eleven. Still later, the B707 came online.

Quoting DDR (Reply 14): I remember seeing Presidential A300s in ATL and I don't recall them lasting very long.

They didn't last long.

http://www.planespotters.net/Airline/Presidential-Air

Quoting jetwet1 (Reply 18): they managed to source some of the most unreliable 762's out there.

Does the 762 cost more to operate than the 763? Might be cheaper to acquire, but with fuel costs similar to the -300 but less seats, that could not help their business model. I did not know about mx issues with their fleet, that did not help.

Who misses Tower Air? They lasted about 17 years flying 747's from JFK to MIA, LAX, SFO, SJU, ATH, TLV, and DOD charters.

View Large View Medium Photo © Javier Rodriguez - AirlinersGallery

View Large View Medium Photo © Harald Müller

Quoting B747400ERF (Reply 21): Does the 762 cost more to operate than the 763?

Trip costs are probably close to a wash between them.

Quoting Boeing778X (Thread starter): Startups With Widebodied Jets: A Bad Idea?

Compass Airlines ( 1) in Australia after the 2 Airline policy changes started up with A300-600R and A310´s. they didnt last Long though! rare & beautiful colour scheme

Quoting Stitch (Reply 23): Who misses Tower Air? They lasted about 17 years flying 747's from JFK to MIA, LAX, SFO, SJU, ATH, TLV, and DOD charters.

Good Ol' Tower Air.

Someone like them will be the type to pick up used A380s in the future and put them to work. I don't know how well they'll do, but someone will try.

Many details are at www.maxjet.org, particularly that MAXjet was not conceived as an all business class airline. It was going to be a transatlantic LCC that connected networks, hence Stansted and BWI as the first routes. The business model was changed to all business class (though as many note, an older seat product) in early 2005 for several reasons, including what investors wanted to fund and market conditions that had opened a huge gap in pricing between economy and traditional business class.

Quoting planesmart (Reply 12): You start with whats available, does the job, is cost-effective to buy and operate, and can be funded.

Which was precisely the case with MAXjet. A major NY investment bank purchased a set of B767-200ERs off Qantas after 9/11. They were looking for a home for the planes. That was the catalyst that brought the funding together.

Quoting Stitch (Reply 15): The 767-200 was the minimum frame that could reasonably perform the mission they wanted (especially on TATL).

As above, to a major extent the mission was built around the airframe, not the other way around. If that investment bank had been pitching 757s then MAXjet would likely have stuck to shorter-haul routes like Eos. But the B767-200ER did work well in specialty long-haul VIP routes like London-Las Vegas where it had the legs and the seat economics.

Quoting jetwet1 (Reply 18): Flying JFK-STN was the main thing.

By September 2007, JFK represented only 1/3 of MAXjet's total departures from London. MY never went daily on JFK versus Silverjet and Eos which were multi-daily. Capacity was spread across JFK, IAD, LAS and LAX, plus a healthy number of VIP charters. At that level of capacity, JFK held its own in terms of revenue. What NYC did provide was a highly fragmented market that allowed MAXjet (and Eos) to get established without attack from the incumbents. No one carrier at that time controlled NYC-LON to the extent that they could drive market pricing (this was before AA/BA had immunity remember). Service restrictions at LHR and LGW meant incumbents couldn't dump capacity. Every startup needs a market it can call its own, or a market so fragmented that no one carrier can put it out of business. JFK was that first market for MAXjet.

Quoting jetwet1 (Reply 18): the fact that they were never able to charge a real business class fare should have told them that, I was paying around $800 round trip all in, honestly, I would have payed double that, I miss Maxjet.

Most people did, at least. The average fare on MY in 4Q 2007 was about $2,000 round-trip. So your fare was not representative of the average. That said $2,000 round-trip wasn't close to what was needed to survive in the $3.00/gal+ environment evident by YE 2007. Long-haul economics that looked sustainable in early 2007 at $1.60 per gallon blew up by year's end.

Quoting jetwet1 (Reply 18): If they had flown into LGW and marketed themselves as a Premium Economy airline they would have done well, also, considering they jumped on the LAS-STN route when their only competition was VS, they would have done well just on that route.

LGW wasn't a (realistic) option in 2007 as this was before Open Skies. LGW and LHR were subject to restrictions. LGW could be done with the investment of time and money (as most US carriers did) but MAXjet would have been competing head-on, subject to bilateral constraints and dealing with the high cost environment at LGW. Essex/Cambridge had a unique catchment area - certainly not as compelling as Heathrow or central London, but not trivial either. But remember that STN was chosen because of the original business model connecting LCCs on both sides of the Atlantic. Even after the switch to all business class, 25% of MAXjet passengers connected on one end or the other to different airlines. MY coordinated with Air Berlin, JetBlue, and El Al and cross-linked websites with Southwest. So there was more to the choice of STN than just LHR/LGW being restricted.

Quoting Boeing778X (Thread starter): That got me to thinking. There are always new airlines starting up with 737s or A320s. Is it unwise to startup with widebodied jets, like the 787, A330 or 777?

Back to the question - it's all about what you can get funded to get off the ground. If there's a glut of A330s sitting around with owners that will put up equity to get the planes back in the air, you can build a business model around that. Is it easier to start with narrowbody aircraft? Of course. Starting MAXjet with B767s was expensive and complex, but then the airline chose to deal with ETOPS, GDSs, multi-currency transactions, cargo and other business model complexities that today's startups eschew.

Zoom Airlines leased an A320 from ZB for a few months before going all widebody pretty quickly. The rest is history.

http://www.planespotters.net/Airline/Zoom-Airlines?sort=dd

Quoting spinkid (Reply 25): Good Ol' Tower Air.

  

Quoting N770WD (Reply 26): Most people did, at least. The average fare on MY in 4Q 2007 was about $2,000 round-trip

Darn it, I missed a 1, should have read $1800 not $800, good catch.

Quoting N770WD (Reply 26): What NYC did provide was a highly fragmented market that allowed MAXjet (and Eos) to get established without attack from the incumbents.

Except that AA turned around and started JFK-STN, pretty much killing MY out of there.

Quoting N770WD (Reply 26): LGW wasn't a (realistic) option in 2007 as this was before Open Skies.

LGW was an open airport in 2007, anyone could fly there, as long as you could get slots.

Quoting N770WD (Reply 26): But remember that STN was chosen because of the original business model connecting LCCs on both sides of the Atlantic.

Yeah, I get that, just to me, it seemed like a waste and a pain, but i was always heading to the South of London or West Sussex/Hampshire, so that really did put STN at a disadvantage for me, a personal thing for sure.

Anyways, it looks like we both had a love for MY, they could have done things a little differently and who knows, if they had made it through 2008/09 then they would probably be going strong.


www.maxjet.org Great site

Quoting sahsa (Reply 22): Who misses Tower Air? They lasted about 17 years flying 747's from JFK to MIA, LAX, SFO, SJU, ATH, TLV, and DOD charters.

I miss them, because they had that Pan Am TWA vibe.



Please remember, there was a Britsh music excutive in the mid 80's, who start an airline with one Beoing 747, and now it is Britains second largest airline. We know this airline as Vrigin Atlantic now, so a start up with a wide body, can work.

Two airlines in Japan started up with just a single 763 and for now they are still around: AirDo and Skymark Airlines.
I think it all depends on what kind of market the start-up airline is targeting.

Quoting Cipango (Reply 6): Scoot started with a 777 and they appear to be doing well.

Agreed.

Another point, if I remember correctly Scoot will be the world's only all 787 airline after they get some more 787s and retire the old Singapore 772s that they currently use.

I feel that Scoot is doing well and I hope they succeed.

Quoting 747400sp (Reply 29): now it is Britains second largest airline

VIR isn't that big, I think EZY are the 2nd biggest UK airline now. BEE and TOM are also bigger.

Quoting 747400sp (Reply 29): I miss them, because they had that Pan Am TWA vibe.

That wasn't a good thing in the 1980s.

Didn't Silverjet out of Luton compete directly with Maxjet on the London-New York route?

My memory is getting dazed I think, sorry.

Quoting Boeing778X (Reply 4): Quoting Rara (Reply 1): Oasis Hong Kong didn't last long either. I think initial low fares are one of the things that killed Oasis.

Far too many J class seats (around 75 if memory correct) was another Oasis problem. But their main problem is that their competitors matched their fares but offered better service and higher frequency. That's often the case when small startup airlines launch service on the bread-and-butter routes of much larger carriers..

Quoting SpaceshipDC10 (Reply 20): Quoting DDR (Reply 14): Did Laker start up with DC-10s or did they start out with 707s? Neither. GK started with Bristol Britannia, later replaced by BAC One-Eleven. Still later, the B707 came online.

However those were all on charter services. If memory correct, Laker had no scheduled services until their "Skytrain" service to the U.S. started using their DC-10s. And, once again, BA/TW/PA all matched or even undercut Laker's fares so their days were numbered from the start. (Several BA/TW/PA executives came close to going to prison for colluding to drive Laker out of business.)

Quoting Viscount724 (Reply 35): That's often the case when small startup airlines launch service on the bread-and-butter routes of much larger carriers.

I think new start-ups should be like what the new Eastern is doing. Start as a charter airline, then go into scheduled service. Fill in the gaps in the network, build your name and reputation, then go after some big airlines.

If WN, B6 and many others got away with it, know knows what else could pop up.

My first thought was Tower.

Great pics above. It was always cool to fly on a 747.

They had a run (that despite all odds) went on for a while!