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lesfalls
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Posts: 3342
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How to start an airline?

Sun May 17, 2020 11:44 pm

I am a university student with plans to start an regional airline. I was thinking of starting with props operating from a 1st tier city to 2nd/3rd tier cities that are not served in Europe. The only thing is I don't know where to start as a university student. I've looked hard and have found nothing. Does anyone have any tips or any set of instructions to follow (to give at least an idea of where to start)? In addition how would I be able to start it as a student? Would anyone actually take me seriously? How could I get people to take me seriously? Thank you for all your help.

Cheers,
Lesfalls
Lufthansa: Einfach ein bisschen besser.
 
LimaFoxTango
Posts: 953
Joined: Wed Jun 16, 2004 11:33 pm

Re: How to start an airline?

Sun May 17, 2020 11:48 pm

This is going to be interesting
You are said to be a good pilot when your take-off's equal your landings.
 
Ishrion
Posts: 2554
Joined: Mon Feb 04, 2019 6:17 am

Re: How to start an airline?

Sun May 17, 2020 11:51 pm

lesfalls wrote:
Would anyone actually take me seriously? How could I get people to take me seriously? Thank you for all your help.


Sign a letter of intent for 30 Boeing 747-8s with 500+ seats. Also apply for the CARES Act bailout because your airline definitely exists.

But seriously, best of luck. This will be interesting.
 
AA747123
Posts: 281
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Re: How to start an airline?

Sun May 17, 2020 11:54 pm

So your career goals are to be flat broke, constantly struggling to survive, dealing with hot headed unions, having a high level of stress, a moderate alcoholic and heavy smoker?
 
Nicknuzzii
Posts: 988
Joined: Sat Sep 15, 2018 5:57 pm

Re: How to start an airline?

Sun May 17, 2020 11:56 pm

Would you have any ideas for city pairs? I am certainly intrigued. Right now is the time to buy low. Do you have any funding?
 
JoseSalazar
Posts: 172
Joined: Mon Oct 14, 2019 3:18 am

Re: How to start an airline?

Mon May 18, 2020 12:01 am

To start any business you need funding. To start an airline you need a lot of funding. And industry knowledge. If you’re a student, you likely have neither. If you are asking the Internet how to start an airline and have so far found nothing, well, good luck. Also remember the old saying: Know how to become a millionaire in the airline industry? Start as a billionaire.
 
dcajet
Posts: 4623
Joined: Sun Aug 01, 2004 9:31 am

Re: How to start an airline?

Mon May 18, 2020 12:06 am

AA747123 wrote:
So your career goals are to be flat broke, constantly struggling to survive, dealing with hot headed unions, having a high level of stress, a moderate alcoholic and heavy smoker?


All I can think of is "Bless his heart".
Keep calm and wash your hands.
 
KarlB737
Posts: 2828
Joined: Sat Mar 20, 2004 9:51 pm

Re: How to start an airline?

Mon May 18, 2020 12:21 am

lesfalls wrote:
I am a university student with plans to start an regional airline. I was thinking of starting with props operating from a 1st tier city to 2nd/3rd tier cities that are not served in Europe. The only thing is I don't know where to start as a university student. I've looked hard and have found nothing. Does anyone have any tips or any set of instructions to follow (to give at least an idea of where to start)? In addition how would I be able to start it as a student? Would anyone actually take me seriously? How could I get people to take me seriously? Thank you for all your help. Cheers, Lesfalls


I remember when JetBlue started. Specifically they had more than a ton of money. It seems that without it you won't be taken seriously. So if you don't have it you'll have to line up a ton of investors. But who knows while the major airlines are cutting everything right now the time may be ripe for a new entrant to scoop up an abandoned route or two and it looks like there is going to be a lot of used aircraft on the market. Contact David Neeleman and you will learn more from him than anyone. Maybe because of your interest as a student he may hire you with his new start-up. In this way you could learn airline creation right from the start from an expert.

JetBlue Founder Launches New Airline Breeze Airways
https://nypost.com/2020/02/07/jetblue-founder-launches-new-airline-breeze-airways/

With His Fifth Airline, David Neeleman Is Trying A New Sales Gimmick: Being Nice To Travelers
https://www.forbes.com/sites/danielreed/2020/02/10/with-the-coming-launch-of-his-fifth--new-airline-david-neeleman-is-trying-a-new-sales-gimmick-being-nice-to-travelers/#23b5ab6e7472
 
mattyfitzg
Posts: 254
Joined: Sun Sep 04, 2016 4:50 pm

Re: How to start an airline?

Mon May 18, 2020 12:35 am

Easy. How to start an airline in 3 simple steps:
1. Dont do it.
2. Don’t do it.
3. Ask yourself if you really want to do it, and come to the conclusion that you don’t.
 
AA94
Posts: 744
Joined: Fri Aug 19, 2011 1:37 am

Re: How to start an airline?

Mon May 18, 2020 1:02 am

In the words of the immutable Bob Crandall: "A lot of people came into the airline business. Most of them promptly exited, minus their money."
 
KlimaBXsst
Posts: 808
Joined: Wed Jan 23, 2019 4:14 pm

Re: How to start an airline?

Mon May 18, 2020 1:04 am

Start with a large fortune, if you want to make a small fortune in the airlines.
Aesthetically the A 340 got it right!
 
cschleic
Posts: 1791
Joined: Sat Feb 16, 2002 10:47 pm

Re: How to start an airline?

Mon May 18, 2020 1:07 am

Given the state of the airline world right now, this probably isn't the best time to start a new one. In any case, as with any industry, work in it for at least a decade, then get a ton of funding.
 
marosbts
Posts: 128
Joined: Fri Nov 05, 2010 12:56 pm

Re: How to start an airline?

Mon May 18, 2020 1:07 am

Ok, I will try to give you some serious insight.

First of all, you need to look at viability of your airline. So start working on a business plan, see what are all the costs you will have, not only direct operating but all the others. Its far more than airplane, fuel, pilots and some charges at the airport. You should first of all get that right and see what is the cost per seat on the routes you are thinking of at a 65% load factor. This should be a fairly easy exercise and should tell you relatively quickly if the cost per ticket would be acceptable by the customer. For most regional type operations they will be very high. As a shortcut - don´t try to work with any aircraft which is below 70 seat. That has proven to be unrealistic business model in Europe.

Then get the model complex, count in all possible cost, progressive revenue growth (your planes will not be full by far in the first years), yield growth etc and see if you get to profitability within 5 years from start. If you come up with a conclusion that you will be, then your underlying assumptions for cost and/or revenue are wrong.

Then, once your business plan seems realistic and you know how much money you need, start looking for investors.

Spoiler: Don´t expect anyone with money who is not an aviation fool to invest a cent into an airline startup in the next 5 years.
 
rfields5421
Posts: 6261
Joined: Thu Jul 19, 2007 12:45 am

Re: How to start an airline?

Mon May 18, 2020 1:11 am

As a university student, focus on finance and economics. Running an airline is not about flying airplanes.

Like any business, your key to creating your dream will be to find a market which is not served. Search and find why no one else is serving that market. What will be the 'unique' aspects of the product you plan to bring to market.

As mentioned above, learn how to manage money, to attract investors and find economical ways to conduct the business you hope to start. In the end, a unique, strong vision doesn't matter if you cannot handle the money end of the operation. Frankly, i'd say major in international business and finance.

Experts in any field can be hired for details.
Not all who wander are lost.
 
9Patch
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Re: How to start an airline?

Mon May 18, 2020 1:28 am

Search YouTube for 'How To' videos.
 
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gunsontheroof
Posts: 3634
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Re: How to start an airline?

Mon May 18, 2020 1:38 am

AA747123 wrote:
So your career goals are to be flat broke, constantly struggling to survive, dealing with hot headed unions, having a high level of stress, a moderate alcoholic and heavy smoker?


Wait...was I was supposed to be running an airline this whole time?!? :shock:
Picked a hell of a week to quit sniffing glue.
 
Fuling
Posts: 272
Joined: Sun Apr 10, 2011 4:41 am

Re: How to start an airline?

Mon May 18, 2020 1:59 am

lesfalls wrote:
I am a university student with plans to start an regional airline. I was thinking of starting with props operating from a 1st tier city to 2nd/3rd tier cities that are not served in Europe. The only thing is I don't know where to start as a university student. I've looked hard and have found nothing. Does anyone have any tips or any set of instructions to follow (to give at least an idea of where to start)? In addition how would I be able to start it as a student? Would anyone actually take me seriously? How could I get people to take me seriously? Thank you for all your help.

Cheers,
Lesfalls


One thing to learn is to get used to criticism, a lot of which can be received here. If you have a dream, who cares if anyone takes you seriously. It'll be investors/shareholders that you have to impress. Although I don't have much insight either, I recommend taking a few courses (I recommend IATA) and get a diploma or masters in aviation. Try and get an aviation-related job (admin preferably) for the experience. Jumping into the stock market and making a few investments (and profits) will help to demonstrate you're good at managing money too.

Meanwhile, research every aspect of your market, run multiple cost/performance analysis', and raise a lot of capital.

Don't worry if you can't do it this year or next. It might take longer, but do it if you believe you can.
 
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lesfalls
Topic Author
Posts: 3342
Joined: Fri Dec 06, 2013 11:58 pm

Re: How to start an airline?

Mon May 18, 2020 2:01 am

marosbts wrote:
Ok, I will try to give you some serious insight.

First of all, you need to look at viability of your airline. So start working on a business plan, see what are all the costs you will have, not only direct operating but all the others. Its far more than airplane, fuel, pilots and some charges at the airport. You should first of all get that right and see what is the cost per seat on the routes you are thinking of at a 65% load factor. This should be a fairly easy exercise and should tell you relatively quickly if the cost per ticket would be acceptable by the customer. For most regional type operations they will be very high. As a shortcut - don´t try to work with any aircraft which is below 70 seat. That has proven to be unrealistic business model in Europe.

Then get the model complex, count in all possible cost, progressive revenue growth (your planes will not be full by far in the first years), yield growth etc and see if you get to profitability within 5 years from start. If you come up with a conclusion that you will be, then your underlying assumptions for cost and/or revenue are wrong.

Then, once your business plan seems realistic and you know how much money you need, start looking for investors.

Spoiler: Don´t expect anyone with money who is not an aviation fool to invest a cent into an airline startup in the next 5 years.


I've run into a problem then as the aircraft I was looking for was in the 10-50 seat count range. 70 seats I believe would be too much but as you say the airfare would be too high then making the route unprofitable. How come do you see it as an unrealistic model though may I ask? There are airlines such as Twin jet (19 seats), Logonair (8-42 seats) and Sun-air(32 seats, BA franchise) which aren't doing so badly. Before there was also Skywork which ended ops due to over-expanding. They seem to be able to have their own niches. That is the only obstacle for now as the rest of the steps seem completely feasible (as time-consuming they may be). Interlining and codesharing would play a big part with my plan too to make the flights works

Thank you for your help nonetheless though marosbts.

Cheers,
Lesfalls
Lufthansa: Einfach ein bisschen besser.
 
User avatar
lesfalls
Topic Author
Posts: 3342
Joined: Fri Dec 06, 2013 11:58 pm

Re: How to start an airline?

Mon May 18, 2020 2:04 am

Fuling wrote:
lesfalls wrote:
I am a university student with plans to start an regional airline. I was thinking of starting with props operating from a 1st tier city to 2nd/3rd tier cities that are not served in Europe. The only thing is I don't know where to start as a university student. I've looked hard and have found nothing. Does anyone have any tips or any set of instructions to follow (to give at least an idea of where to start)? In addition how would I be able to start it as a student? Would anyone actually take me seriously? How could I get people to take me seriously? Thank you for all your help.

Cheers,
Lesfalls


One thing to learn is to get used to criticism, a lot of which can be received here. If you have a dream, who cares if anyone takes you seriously. It'll be investors/shareholders that you have to impress. Although I don't have much insight either, I recommend taking a few courses (I recommend IATA) and get a diploma or masters in aviation. Try and get an aviation-related job (admin preferably) for the experience. Jumping into the stock market and making a few investments (and profits) will help to demonstrate you're good at managing money too.

Meanwhile, research every aspect of your market, run multiple cost/performance analysis', and raise a lot of capital.

Don't worry if you can't do it this year or next. It might take longer, but do it if you believe you can.


I've gotten used to it my whole life so finally I've taken the leap of faith to get started after years of reading a.net (which I would hope suffices as some realistic knowledge of the industry). Any particular IATA courses? In addition would an MBA/Masters in MGMT also not suffice or there are some particular details that I would be missing in doing so?

Thank you for all your help.

Cheers,
Lesfalls
Lufthansa: Einfach ein bisschen besser.
 
intelijet
Posts: 8
Joined: Fri Jun 05, 2015 9:19 pm

Re: How to start an airline?

Mon May 18, 2020 2:08 am

lesfalls wrote:
I am a university student with plans to start an regional airline. I was thinking of starting with props operating from a 1st tier city to 2nd/3rd tier cities that are not served in Europe. The only thing is I don't know where to start as a university student. I've looked hard and have found nothing. Does anyone have any tips or any set of instructions to follow (to give at least an idea of where to start)? In addition how would I be able to start it as a student? Would anyone actually take me seriously? How could I get people to take me seriously? Thank you for all your help.

Cheers,
Lesfalls


Not intending to be mean but to start, you should be able to do basic-under-60-seconds research on Google. Then ask specific questions or discuss issues that you think are relevant.

Just by typing a few words in Google got the information below, I hope it gives you some idea.
https://www.boeing.com/company/about-bc ... oeing.page

In such a tough and complex industry, you'll need knowledge and skills to succeed, you need to pass inspections done by regulators which require somewhat technical manuals and experienced officers. Even many established companies with experienced management fail to have an appropriate strategy so you better understand that too.

As for any startup, you will need enough money -and for an airline enough means a lot of money-, a lot of hard work, and the right strategy/value proposition.

Think questions such as: What would make your carrier different than any other? Why other carriers in the 1st tier city are not serving those cities you want to serve? Is the service necessary? In Europe you have reasonable substitutes for short distances such as trains, so don't look at city pairs not served by air only but also understand which substitutes compete against air travel.

To be an entrepreneur you need to think for your self, do your own research and don't expect a recipe from a forum. Think through your idea, build a plan, and seek advice from experienced people, someone knowledgeable with a name and not anonymous strangers online. LinkedIn would be more appropriate but if you are approaching someone make sure to have specific questions and ideas and not just a "Hello, I want to start an airline, tell me how".
 
strfyr51
Posts: 4844
Joined: Tue Apr 10, 2012 5:04 pm

Re: How to start an airline?

Mon May 18, 2020 5:19 am

rfields5421 wrote:
As a university student, focus on finance and economics. Running an airline is not about flying airplanes.

Like any business, your key to creating your dream will be to find a market which is not served. Search and find why no one else is serving that market. What will be the 'unique' aspects of the product you plan to bring to market.

As mentioned above, learn how to manage money, to attract investors and find economical ways to conduct the business you hope to start. In the end, a unique, strong vision doesn't matter if you cannot handle the money end of the operation. Frankly, i'd say major in international business and finance.

Experts in any field can be hired for details.

I might also say? Pick an airplane and research it. Find out what it can, and Can't do. map out your proposed city pairs and find out what the travel has been, also find out what the driving times and costs are to get there. without these? you can't even present a business PLAN when you go looking for money.
 
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TWA772LR
Posts: 7201
Joined: Thu Nov 17, 2011 6:12 am

Re: How to start an airline?

Mon May 18, 2020 5:30 am

You’d be better off buying a “cheap” airplane and starting out with contracting (read: whoring yourself out) and doing things like aerial sight-seeing, oil pipeline flying, sign towing, etc... and go from there. Colgan (not a good example) and Spirit (great example) had their roots as FBOs.

Eventually you’d be able to scrape enough money and attract good enough people with business talent to help up you go from there.

Then give me a 25% cut of the profits as an idea fee.
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
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PatrickZ80
Posts: 4199
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Re: How to start an airline?

Mon May 18, 2020 5:01 pm

lesfalls wrote:
I was thinking of starting with props operating from a 1st tier city to 2nd/3rd tier cities that are not served in Europe.


This could be difficult as many 1st tier airports in Europe are severely slot restricted. Chances are you just don't get permission to fly from the airport you had in mind.

Even if you can get slots, at 1st tier airports they certainly don't come cheap. Mostly the size of the aircraft doesn't matter, you pay just as much for a Twin Otter as for a 747. However with a Twin Otter you got far fewer seats to divide these costs over, so the costs per seat are significantly higher. Meaning other airlines with larger aircraft can easily crush you.

What are you going to do if you just invested a whole lot of money to start a certain route and then EasyJet or Ryanair comes busting in and starts the same route? They're offering far lower fares than you, meaning nobody will fly your airline. Unless you got a plan how to fend them off, you'd be out of business before you know it. That's the sad reality for many startup airlines in Europe.

If you want to start an airline, Europe might not be the continent to look at. It's already far too congested, there's far too much competition with far too low fares. You can't compete in that. On the other hand, South America for example doesn't face these problems. There's far less competition, far more untapped markets, fares are higher making it easier to compete, etc. So it might be far wiser to start an airline there instead of in Europe.
 
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lesfalls
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Re: How to start an airline?

Mon May 18, 2020 9:01 pm

PatrickZ80 wrote:
lesfalls wrote:
I was thinking of starting with props operating from a 1st tier city to 2nd/3rd tier cities that are not served in Europe.


This could be difficult as many 1st tier airports in Europe are severely slot restricted. Chances are you just don't get permission to fly from the airport you had in mind.

Even if you can get slots, at 1st tier airports they certainly don't come cheap. Mostly the size of the aircraft doesn't matter, you pay just as much for a Twin Otter as for a 747. However with a Twin Otter you got far fewer seats to divide these costs over, so the costs per seat are significantly higher. Meaning other airlines with larger aircraft can easily crush you.

What are you going to do if you just invested a whole lot of money to start a certain route and then EasyJet or Ryanair comes busting in and starts the same route? They're offering far lower fares than you, meaning nobody will fly your airline. Unless you got a plan how to fend them off, you'd be out of business before you know it. That's the sad reality for many startup airlines in Europe.

If you want to start an airline, Europe might not be the continent to look at. It's already far too congested, there's far too much competition with far too low fares. You can't compete in that. On the other hand, South America for example doesn't face these problems. There's far less competition, far more untapped markets, fares are higher making it easier to compete, etc. So it might be far wiser to start an airline there instead of in Europe.


Thank you Patrick. That sounds like a good idea, the only problem would be ownership rights as I would think that you cannot own an airline as a foreigner in any South American country?

Cheers,
Lesfalls
Lufthansa: Einfach ein bisschen besser.
 
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TWA772LR
Posts: 7201
Joined: Thu Nov 17, 2011 6:12 am

Re: How to start an airline?

Tue May 19, 2020 5:37 am

lesfalls wrote:
PatrickZ80 wrote:
lesfalls wrote:
I was thinking of starting with props operating from a 1st tier city to 2nd/3rd tier cities that are not served in Europe.


This could be difficult as many 1st tier airports in Europe are severely slot restricted. Chances are you just don't get permission to fly from the airport you had in mind.

Even if you can get slots, at 1st tier airports they certainly don't come cheap. Mostly the size of the aircraft doesn't matter, you pay just as much for a Twin Otter as for a 747. However with a Twin Otter you got far fewer seats to divide these costs over, so the costs per seat are significantly higher. Meaning other airlines with larger aircraft can easily crush you.

What are you going to do if you just invested a whole lot of money to start a certain route and then EasyJet or Ryanair comes busting in and starts the same route? They're offering far lower fares than you, meaning nobody will fly your airline. Unless you got a plan how to fend them off, you'd be out of business before you know it. That's the sad reality for many startup airlines in Europe.

If you want to start an airline, Europe might not be the continent to look at. It's already far too congested, there's far too much competition with far too low fares. You can't compete in that. On the other hand, South America for example doesn't face these problems. There's far less competition, far more untapped markets, fares are higher making it easier to compete, etc. So it might be far wiser to start an airline there instead of in Europe.


Thank you Patrick. That sounds like a good idea, the only problem would be ownership rights as I would think that you cannot own an airline as a foreigner in any South American country?

Cheers,
Lesfalls

I don’t think a foreigner can have total control of a company, a local has to be in on it too. Use DL and LA or AM, or CO and CM as an expample. Connecting hubs to beach towns in Central America would be a cold start similar to Tropic and Maya Island in Belize.
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
marosbts
Posts: 128
Joined: Fri Nov 05, 2010 12:56 pm

Re: How to start an airline?

Wed May 20, 2020 3:04 pm

lesfalls wrote:

I've run into a problem then as the aircraft I was looking for was in the 10-50 seat count range. 70 seats I believe would be too much but as you say the airfare would be too high then making the route unprofitable. How come do you see it as an unrealistic model though may I ask? There are airlines such as Twin jet (19 seats), Logonair (8-42 seats) and Sun-air(32 seats, BA franchise) which aren't doing so badly. Before there was also Skywork which ended ops due to over-expanding. They seem to be able to have their own niches. That is the only obstacle for now as the rest of the steps seem completely feasible (as time-consuming they may be). Interlining and codesharing would play a big part with my plan too to make the flights works


You would have to operate on a very niche route in order to succeed with a sub 50 seat plane. The cost per seat would be simply too high in order to convince people to fly and not rather use other means of transportation. Imagine a 1 hour flight costing 200 EUR oneway. People would simply not fly but rather drive or take rail if available. Another risk for the regionals is, that they spend years developing such markets, and by the time they finally make it work with their 50 seat props a larger player enters the market with 100+ seat aircraft, which has much lower cost per seat. This allows much lower fares so it will push the regional off market on such route. (see Intersky vs Germanwings)

Also, you can not consider any code-shares in your initial assumptions. There is very little chance that an established network airline would start to code-share with a newcomer airline just like that. That process would take eons to complete. It would be years before such an airline would even start talking to you. Any kind of code-shares, can be a bonus on top of your normal sustainable business model. A reason for that is also that the larger counterpart will squeeze every single cent possible out of such deal so you as an operating carrier will get far less than you expect.

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