Start-Up Airline

ACMAir · 08-12-2008, 08:49 PM

Hello Forum,

This is my first post here. It seems odd that someone would be interested in having a start-up airline in today's airline industry, but the rules of capitalism apply to all industries. The weaker companies go belly-up for new ones to come in.

How does one go off creating an airline?

chrispalko · 08-12-2008, 08:59 PM

Of course you would need a business plan to present to investors. To be honest, I really don't know how an airline company would be started, but I know you would need money, so that's why I made the suggestion I did.

Regardless, welcome to the forum and good luck with your venture.

ACMAir · 08-12-2008, 09:11 PM

Quote:

Originally Posted by chrispalko

Of course you would need a business plan to present to investors. To be honest, I really don't know how an airline company would be started, but I know you would need money, so that's why I made the suggestion I did.

Regardless, welcome to the forum and good luck with your venture.

Thanks Chris.

If I was to purchase a 1985 Jetstream aircraft, for 500K, and use a collateral to get the loan, but can't pay the loan, after they take my house, would I have the plane?

I know this isn't how airlines are started, most of the initial capital is by investors and fundraising, but nonetheless, just a general finances question.

Best Regards,
Andrew

chrispalko · 08-12-2008, 09:18 PM

I'm pretty sure they will take everything. If you buy a car on a loan and can't pay it, they take the car, you know? So with collateral, I would assume they would take the plane, and whatever assets you had tied into the loan.

I was thinking, and if you were to start an airline company, you would really need to make it stand out from the other ones, because yes, some are going "belly-up", but others are still holding strong, so you need to figure out how to compete with them.

And one more thing, I don't think it's too good to be thinking about failure and your house being taken before you even get started. Stay positive!

ACMAir · 08-12-2008, 09:25 PM

Quote:

Originally Posted by chrispalko

I was thinking, and if you were to start an airline company, you would really need to make it stand out from the other ones, because yes, some are going "belly-up", but others are still holding strong, so you need to figure out how to compete with them.

And one more thing, I don't think it's too good to be thinking about failure and your house being taken before you even get started. Stay positive!

That's true, I'm pretty positive about the idea. In terms of staying in the industry and breaking the well situated airlines, that's all figuring out what the client wants. Sadly its (service and a great bargain) The only airline operating with any considerable profit within the US is Southwest. Mainly due to their fleet commonality, fuel hedging, and fast turn around time. In addition they provide US travellers with service and treatment unseen in the past decade.

The only other airline succeeding in this marketplace is Allegiant Airlines based in Las Vegas, which operates regional flights to areas not served, with old aircraft. Their aircraft are nontheless very well maintained.

pboychuk · 08-12-2008, 09:31 PM

Quote:

Originally Posted by ACMAir

Thanks Chris.

If I was to purchase a 1985 Jetstream aircraft, for 500K, and use a collateral to get the loan, but can't pay the loan, after they take my house, would I have the plane?

I know this isn't how airlines are started, most of the initial capital is by investors and fundraising, but nonetheless, just a general finances question.

Best Regards,
Andrew

Hmm if you use the plane as collateral why wouldnt they take it? I thought thats the point of collateral, correct me if im wrong

ACMAir · 08-12-2008, 09:41 PM

Yes, but I'm not using the plane for the collateral, I'm using the house to buy the plane. Therefore I'm giving the bank the option of taking my house if I do not complete the payment. (I might be confusing what a collateral is, please correct me if i'm wrong)

pboychuk · 08-12-2008, 09:43 PM

Quote:

Originally Posted by ACMAir

Yes, but I'm not using the plane for the collateral, I'm using the house to buy the plane. Therefore I'm giving the bank the option of taking my house if I do not complete the payment. (I might be confusing what a collateral is, please correct me if i'm wrong)

Oh haha, i must have misread what you posted. Anyways, just wondering, are you a pilot?

ACMAir · 08-12-2008, 09:45 PM

Quote:

Originally Posted by pboychuk

Oh haha, i must have misread what you posted. Anyways, just wondering, are you a pilot?

No. lol. I'm not a pilot, sadly. Why do you ask? Is it my posts relating to airlines? I'm actually a teenage boy who is intrigued by the airline industry.

MistaDobalina · 08-12-2008, 11:33 PM

I know a pilot for southwest...and I think a new affordable airline is a great idea. Especially if poor college students like myself could actually afford trips. Is it feasible? I only know basic economics and I don't really think so with the price of gas...but that would be friggin' wonderful. I don't really care about an extra pillows or if the airplane is top of the line...I just want to fly.

ACMAir · 08-13-2008, 12:44 AM

Interesting. It is definately feasible, but it would be stretching the no-frills model to the extreme. Skybus, based in Colombus, started with that idea in mind but filed for bankruptcy and ceased operations only 8 months into operation. Using the proper aircraft, on the proper routes, with friendly staff is the way to go. I once heard Jetblue former CEO and founder , David Neeleman, would give gifts to airport shuttle drivers. He knew they would be a great way to spread the word, and soon drivers began to tell their passengers about the gifts and created a great image for JetBlue.

Cheap flight is still plausible. But many operations have to be streamlined.

philuk · 08-15-2008, 08:15 AM

I doubt this is the best time to join the airline industry, profits are down and many big companies are being forced to join toghter to compete. There is so much cost involved in running a airline, firstly a plane/advertising/fuel/ staff/ safety/ legal issues and so on.

tempogen · 08-15-2008, 08:57 AM

Hey!
What kind of airline are you thinking of ? Is it cargo or passengers? you really must study your idea thoroughly. check out planes, local and worldwide, maybe you'll stumble upon a real beaut, especially with companies going belly up. Start infinitely small.. today's phrase is " baby steps" . Maybe you could start with a taxi working in the airport and work your way up from there :P .
Maybe you could apply to a piloting school, and start with a small airplane - sorry i'm not an aviation connoiseur - flying tourists and adventurers to difficult locations? you know like in the movies, then the tourists get torn to shreds by whatever is lurking in that jungle/ mountain. But that's really not your concern since you got paid.
You're young, DO NOT jump into dept so early. come to think of it, do not jump into dept at all if you're uncertain about the future of your project. crunch those numbers, think really well about what to do, and look for other plans for obtaining your plane(s).
Good luck, and sorry, I'm in a good mood for some reason....

cheers

ACMAir · 08-17-2008, 02:18 PM

Quote:

Originally Posted by tempogen

Hey!
What kind of airline are you thinking of ? Is it cargo or passengers? you really must study your idea thoroughly. check out planes, local and worldwide, maybe you'll stumble upon a real beaut, especially with companies going belly up. Start infinitely small.. today's phrase is " baby steps" . Maybe you could start with a taxi working in the airport and work your way up from there :P .
Maybe you could apply to a piloting school, and start with a small airplane - sorry i'm not an aviation connoiseur - flying tourists and adventurers to difficult locations? you know like in the movies, then the tourists get torn to shreds by whatever is lurking in that jungle/ mountain. But that's really not your concern since you got paid.
You're young, DO NOT jump into dept so early. come to think of it, do not jump into dept at all if you're uncertain about the future of your project. crunch those numbers, think really well about what to do, and look for other plans for obtaining your plane(s).
Good luck, and sorry, I'm in a good mood for some reason....

cheers

I was actually planning on starting a small regional carrier based in Ontario California. It would operate 2-3 Jetstream 31 propellar planes at first between Ontario and other airports with minimal service. This approach has become successful for Allegiant Air based in Vegas. I've been doing the math for a while. But, although you mention keeping a positive attitude, I have to be realistic to think if I am to think of the long term, buying a more efficient plane that costs 40 times more and carries 55 more passengers, or a small 19 passenger 1980s plane for half a million.

jon.deana · 06-21-2009, 08:59 PM

Has anyone found numbers associated with the cost of fuel/staff/maintenance/etc? I was having trouble finding exact numbers. I thought of starting an aviation company similar to NetJets - more like a Taxi service for the airline industry. However, I haven't really devoted a ton of time to the idea.