Wot's the latest with Gold Airways?

[buzzz.lightyear]

Haven't heard much about Gold Airways of late.
Are they still a goer?

[Apophis]

God not this crap again it was never and is never going to happen they don,t even own a friggin plane.:ok:
Are they still a goer? NO !:eek:

[Escape_Slide]

I haven't heard much either but I understand TPG might be involved. I guess after Ozjet spat the dummy, they'd be more than cautious. Can't blame them really.

Who's that other lot that want to operate MD83s? They are looking for a Chief Pilot. B727s, gas gusslers in Jan 07 !!! Not recommended. :=

[Escape_Slide]

Just cruising through their website, but the site is not coming up anymore :\ Sh**t i hope they haven't pulled the plug.

[Fountain Pen]

No guys....the fact that OzJet gave it away has not detered Gold Airways....the business plan is complete and as you might have seen on the web site before it went of the air...majority of tasks have been completed....

Its a great business plan....Gold is aiming to be a Low Cost Premium Carrier to operate a fleet of A-320 family of aircraft...and is now in the process of attracting an investor...once that is done, attaining aircraft, hiring of staff and of course the AOC will come very quickly...

It was decided to close the web site due to poor patronage....the cost of keeping it open to how many looked at the web site was deemed uneconomical...

Personaly I liked it open, but the powers at be decided otherwise....I'm sure once the green light is received the site will be bigger and better...at the moment all the departments in Gold Airways are undergoing due diligence...

I wish Gold the very best...it will be no easy task to start up in Oz...QF & VB will pull every dirty trick in the book and then some...but that does not mean that there is no room for a potential airline like Gold Airways...:)

[Woomera]

Just don't bite people.

[Wizofoz]

and is now in the process of attracting an investor

So, just the minor matter of finding the MONEY then....

It's all so easy

(Sorry Woomera, I'm only human!!)

[gas-chamber]

If they can't afford a website, how in Hades will they ever scratch up enough for wages, let alone the rest of the million or two just to get the AOC ? Total tossers.

[Escape_Slide]

Look, if they are being frugal, what's wrong with that? To stay competitve you have to watch every penny (cent). They had that website for a while, they obviously want to update it to a slicker site with more capabilities, I guess. At least it's dynamic, not like the defunct Ozjet one.

Hey, if they have an interest from an investor, sh**t man, they are a lot further ahead than some of you "lard-heads" and, besides, I need a career too - so I reckon they are doing alright mate.

Listen, they have a public company registered. Its clearly more serious than some of you guys are making out. I don't know the guy who started this but if he has already got this far he must be a bloody genius, I reckon.

F**ck, join the band wagon I say, this is going to be a winner. :D

[Fountain Pen]

One thing I have noticed over the years on this website is that there a lot of c**k-heads that make stupid moronic comments...

There is a reorganization of the Gold Airways website in progress....it involves of changing things technically to utilize high speed communications, and for world wide web support...

It doesn't matter if cynics think Gold will never get up....what's it to them anyway...but if Gold does get up then there will be opportunities for those that are being denied one now...:)

[Apophis]

Whta a load of CRAP.:=

[jack red]

Some people can't help themselves. This is a HUGE wind up but the fish continue to bite.:ugh:

[Apophis]

HOW TRUE...............

[Wizofoz]

Escape and Fountain,

I've made this offer before-
$50 (Each)!!

Nominated a date by which you believe Gold Air will be up and running. Aircraft in the air gets you $50. Dreamers playing with websites- I'll await you cheque....

[morning mungrel]

I ain't takin' that bet..

[Escape_Slide]

Fountain Pen, you would be involved with them would you? Come on mate, spill the beans. Who is the investor??? OK well maybe you better not but they must be paying the recruitment agency that interviewed me so they must have money right?:cool:

[Fountain Pen]

As I said before...the website is being updated...if you go there now you will see an explanation for the change...

Gold Airways has not engaged a recruiting agency...although they have received lots of applictions due to advertising that was on that previous web site...once investors are on board...recruitment will start...

For those of you that don't want to see Gold Airways fly...what's it to you anyway, its none of your business...you are obviously happy with your lot in life and don't want to see others have an opportunity to have a career in an airline...:)

[Apophis]

As I said before...the website is being updated...if you go there now you will see an explanation for the change...
Gold Airways has not engaged a recruiting agency...although they have received lots of applictions due to advertising that was on that previous web site...once investors are on board...recruitment will start...
For those of you that don't want to see Gold Airways fly...what's it to you anyway, its none of your business...you are obviously happy with your lot in life and don't want to see others have an opportunity to have a career in an airline...:)
Gold Airways has not engaged a recruiting agency because THEY HAVE NO JOBS NO PLANES NO EQUIPMENT NO HANGARS ETC ETC ETC.
IT WILL NEVER HAPPEN !

[Fountain Pen]

And if it does Mr Apophis...won't you look like prized pratt...like I said before...what's it to you anyway, if it does or doesn't make it...really not any of your business....:)

[Apophis]

utter crap !

[Wizofoz]

Fountain,

If it's some private matter, and thus "None of our business", why are YOU posting here?

You have come on and painted a rosy (tinted?) picture of the potential of Gold Airways, then got rather prissy when challenged over it.

Those of us who have been around this industry for a while (26 years!! God I'm old!!) have seen numerous dreamers/wannabees/two bit entrepreneurs come on the scene with grand schemes to be the next RMA or Hudson Fysh. Just a few, usually those that have found an unexploited niche and astutely filled it, have gone on to start viable businesses. Even fewer have become wealthy as a result.

The problem with the vast majority that either never get airborne,or, worse still, do so briefly, is that it doesn't happen in a vacuum, and naive people (as, I'm afraid, you present yourself to be) get caught up in the maelstrom.

Remember AAA airways (I suspect not!!). They were going to set the world on fire using clapped out DC 9s- Oh, and money invested by wannabees such as yourself. When reality finally kicked in money "Held in trust" had vanished into a convenient black hole and, far from "Having an opportunity for a career in an airline" people where left with their life savings gone.

Remember Monarch and Seaview? I knew the pilot of the Seaview Commander personally. He was a young, enthusiastic guy who wanted nothing more than to fly for a living. Because operators like those two drove down the costs by ignoring safety standards, pilots were denied the opportunity for a career in decent operations, and three who chose to work for them (and many Innocent passengers) had their dreams end in a smoking hole in the NSW country side and a watery grave.

The Australian domestic airline market is mature and growing incrementally. No new operator is going to significantly grow the market and produce lots of new jobs. The best they could hope (wish!) for is to take market share from the incumbents, reducing opportunities at the existing carriers.

If you are so keen for an airline career, why aren't you working for one of the existing airlines? Not that easy I know, but you have to realize that any chance given through the extremely remote chance of Gold getting up would come at the expense of someone else.

It's "Our business" because we've seen it all before and it's worth informing people of the history of the industry so they can make informed choices.

Oh..and don't come on Ppune without being willing to have your ideas robustly challenged!

[Ian Cognito]

Seems to me that with all the planning that has and is going with this I reckon it will be a goer.
Certainly will be attractive for all those who have been ripped off and treated with contempt by the other two.
I know I'll support it big time.:ok:

[Wizofoz]

Seems to me that with all the planning that has and is going

Has it occured to you that they wouldn't have done so much "Planning" if the had the money to start?:rolleyes: :rolleyes:

[Doctor Smith]

Wasn't that the one RON BARTSCH was involved with?:} :} :D

I know a few blokes that got ripped off by AAA:yuk: :yuk:

[Fountain Pen]

Well....its supposed to be a deregulated market....if Gold Airways has a better product then the current 2 or 3 really then it is entitled to find its own market...that is customers will fly with the airline they like best...that's called competition...

I suspect if it gets up, it will employ lots of ex Ansett people that who saw their careers ruined and have been denied opportunity to join the other airlines that were there....watching as new recruits were being employed and they were being left aside...

Branson didn't care that he was going to take market share from the incumbents when he brought Virgin here...neither did QF and VB care when Ansett folded...it was what's in it for them at the expence of the Ansett folk...I think Gold Airways has every right to start up if it wishes....:)

[Escape_Slide]

It seems to me that these people are doing what the other airlines didn't, planning ahead and being wise.

If what I read is true, its going to be a very passionate airline to work for and if it's true about the bloke behind it, I'd work for him any day. He seems to have what it takes to lead an airline through these challenging times. I am told he was one of TAA's top apprentices in the early 70s!!!! With that sort of background I feel completely safe in his hands as he'll get the job done properly. A mate of mine who works in SE Asia said this bloke recently solved an flight control problem over the phone to get a grounded A320 out of Sichuan Provence - apparently the airline was deeply indebted. Talk about talent!

With so much work already done in the planning, I would say an investor who doesn't treat this as the opportunity of a lifetime, has missed the boat.

[Apophis]

You forgot he has no money.:D

[Fountain Pen]

Well I can tell you that an enormous amount of work has been done...and the business plan is really something...however, it still doesn't mean that investors will just blindly rush in for the piece of the action...

That's why Dixon got Jet* going....to spoil the appetite for would be start ups and to get Qantas' costs down...so we may see 747's in QF colours and the rest in Jet*...because Jet* then can compete with VB and the other LCC's in Asia...

Be that as it may....Gold Airways will have to carve out a niche of its own...with the proper investment it will find its own market and not go for a land grab...passion there will be with the ex Ansett people, after all Ansett was the best product in its day and that will flow through in Gold Airways.....

If the bloke is the same as the one that solved the A320 problem in Sichuan I don't know and not sure if he worked for TAA...but he is a driving force with inputs from overseas for advice as well.....anyway we shall see....:)

[Escape_Slide]

Why is it that people are bagging this guy if he has all this support from overseas?? Are the lard heads on pprune jealous that he is popular amongst the peers???? I take my cap off to him.

Anyway, just reading the press reports about QF, it sounds like QF are in deep sh**t. The time would be right for Gold Airways to get into the market and if they had any brains link up with one of the Singaporian LCCs for immediate new markets.

Is Gold airways behind the Bankstown move?

[Fountain Pen]

No...the pprune lard heads don't want their apple cart upset...they are content, and want it that way...

The Bankstown move...never heard of it...Links with other arlines from overseas...is a must....and the old addage...never say never, expect the un expected....great lesson learnt by ex Ansett people....

Nothing is forever...and Life is what happens when you are busy making plans... some good quotes....idiots that say.... that they have no money, aircraft, etc...are just that...idiots....

If Gold Airway gets up...it will be a bottler...a great airline with a great product...it will be its people that will make that way...there are no guarantees...but we are all hoping.....as we know that the product will be fantastic.......:)

[chimbu warrior]

Fountain Pen I don't have any inside knowledge of Gold Air, but wish them well.

Your posts suggest that QF and VB were lacking in sympathy for Ansett; well I am afraid that is just the cut and thrust of business, and as I recall Ansett themselves weren't too sympathetic when both Compass carriers failed. A lot of people had dreams and plans destoyed by those failures too.

I'm pro competition, provided the playing field is level and fair. I also think it is now fairly well accepted that the Australian market cannot support umpteen carriers all competing for the same (comparatively) few punters. I wish all current and intending carriers well, but suspect that in 5 years from now the airline landscape in Australia will have changed very little.

[Fountain Pen]

Yes well I understand....it was the same when Ansett, Australian, and Qantas was there...but it didn't stop Impulse and Virgin getting up....they didn't care....

If Dixon had his way there would only be Qantas...after all he keeps up about Lufthansa and Germany and really only one airline...but it isn't...as Germany is part of the EU which has a family of half a billion....

Should there only be Holden and Ford...they sure would be profitable then....I'm afraid you like competition...but also want a level playing field...what level playing field did Ansett have...when the Australian government conspired with the New Zealand governemnt in favour of Qantas and Air New Zealand...

What level playing field do the ex Ansett staff get....discrimination was rife, with also the help of that famous list from a pilots union of yester-year...there are still lots of guys out of work and can't get a look in.....

The aviation business is not geared to absorb 16,000 employees from a failed airline...yes I like level playing fields if it plays for my benefit as well....but its hard to swallow to see others benefiting because your company was desptroyed...its grossly unfair....

Gold Airways will go some way to give again opportunity to some excellent ex Ansett people that would give their right arm to be in an airline inviorment again which is being denied them now....:)

[BHMvictim]

As I said before...the website is being updated...if you go there now you will see an explanation for the change...


From the website

We're making these changes because we think that our corporate internet and intranet website requirements are different to our promotional and booking engine websites.

heehee Booking engine?

Bit fanciful to have a booking engine when they do not even have a single jet engine!

[Fountain Pen]

Oh my goodness..with a comment like that...you show me what an intelectual giant you are..ah duh!!...yep...no jet engine!!...so do you feel better now?.....:)

[BHMvictim]

And the point of your comment was what Fountain Pen?

I feel indifferent. Was just pointing out the fact that it is a little fanciful to have a website with online booking facilities, well before you even have a single aircraft to fulfill the bookings!

I first saw it almost a year ago. Still no aircraft!!

Kind of seems like a virtual reality airline game! Should keep some of the spotters amused! :ok:

[BHMvictim]

On another note, some seem to think there are people posting here that WANT to see Gold Airways fail. I think the point has been missed. Nobody wants to see RMA GA fail.

They are simply pointing out that it's a tough market, plenty have come, tried and failed. Those that tried, came with wads of money. This guy has none. I work with several people that have worked with the guy behind RMA GA.... and they laugh everytime this subject is brought up.

Apophis... you are an Avalon guy aren't you? I am sure you would have crossed paths with mr Buche?

http://www.smh.com.au/news/business/gold-air-has-vision-but-not-the-planes/2005/09/20/1126982061125.html?from=moreStories

[Apophis]

Not sure there are so many want to be,s at avalon i may have known him as something else the term Tosser comes to mind over 3 shifts and 4 hangars gold has as much hope of getting up as AVV has of ever doing 3rd party work.:ugh:

[Fountain Pen]

My comment is this...that it is stupid to talk about that they have no jet engine and they talk about a booking engine....you know...I have a search engine but I don't have a jet engine....so what does a comment like that prove...

Yes....there is miriad of people out there in pprune land that don't want Gold Airways get up....they just want it all to themselves and don't want any other competition...this world is full of synics...and don't like to see others have a go and maybe succeed....

Just having a wad of money does not guarantee success....and you must think that people behind Gold Airways are total idiots that are going to throw money away on pipe dreams....I don't think so....

The article you attched is full of misleading information....its writen to make out that the guy behind Gold Airways is an accentric fool...its not the case...its no use saying any more.....its all a waste of time...

Just that if Gold Airways gets up or not then we will all know about it...and some will have smiles on their faces and others egg on theirs....:)

[Fountain Pen]

Well rmm..you could be right...yep he is from Ansett and yep he is driving a omni-bus at the moment...I don't know if he is a lazy eccentric fool though....it doesn't appear so...

He would be reticent to answer hard qustions especially on this forum...so would any person that is a bit on the in-knowledge....there is a stack that is confidential...so a lot of them can't say much except the obvious....

Of course we all have people we don't like etc...team tossers and other adjectives...well does it matter....there is no doubt that this is a very difficult project...its chances of getting up I would not like to put odds on....but you can never dismiss something like this...

So all I keep saying is we just have to wait and see...although I feel it has been taking a long time...in fact far to long...but these kind of projects can not just materialize so quickly unless you are Dixon and the resources of Qantas behind you to start Jet*....

VB owes its success to the failure of Ansett....it could not help but prosper...it was all there for the asking...it would have been a different story had SIA had control of Ansett...and that was Dixons only concern, that it did not happen....:)

[Escape_Slide]

Listen if the Guy is doing a business plan and is in front of an invester does that make him an eccentric fool? He seems to be doing something right and from what I see on this thread, more than some of you jokers are able to muster support for. Well maybe you need to be eccentric in life to succeed where others have failed. What about all those eccentric fools who every year chuck in their pilots jobs to move on because the industry is full of Dickheads ???
:ugh: :ugh: :ugh: :ugh: :ugh: :rolleyes:

[Jens_Buche]

Dear Colleagues,

I have been watching with interest the dialogue surrounding the Gold Airways venture on pprune and would like to clarify some misconceptions that you may have. I do not think it is productive for you to continue to speculate on what might be happening.

A number of things we do have to be done under Non Disclosure Agreements (NDAs) For this reason, the facts are not always apparent and this can lead to misconceptions. Some NDAs strictly prohibit disclosure even of the NDA, so you cannot even suggest a relationship exists with that party.

The development of Gold Airways, whilst seeded on the passion of former Ansett staff to found a replacement for Ansett, was to set out to challenge the basic neo-classical micro-economic theory that the Australian aviation market was not contestable. Gold Airways needed to be modelled differently to ensure that it would survive in a ruthless and challenging market. That meant a solid business plan had to be developed with all the hallmarks of a low cost carrier but with a presence giving passengers a clear choice in the markets it would operate.

The business plan has taken nearly 3 years to complete although it is still very much a dynamic state of affairs. One of the big problems with doing something as huge as this is making sure you have guidance from your peers and, I am thrilled to be able to say that some of the best aviation strategy and marketing experts have had a major input to the Gold Airways proposal. Even so, we continually revise data and strategies based on the dynamics of the industry. I am very fortunate to have a select group of business associates who have put their support behind the venture to develop the necessary documentation and presentations for investors. It goes without saying that the venture consultants I have at my disposal are a top bunch of people, no doubt like yourselves.

Part of developing the business plan has been to present Gold Airways as a complete airline management package out of a box. To this end we have been developing a 5 year business plan with all the costings and revenue models, establishing the policies and procedures and establishing the labour and aircraft requirements. It's quite a challenge to do everything in a plan for the things most of us take for granted in the every day life of an airline. For example, the Gold airways business plan has a daily cashflow forecast for every day in that 5 year period, so you can make sure there is always cash in the bank to meet daily expenses and abnormals. We've even run competition scenarios to ensure the airline can sustain competition for a very long time. Of course, to do this sort of work you need to put in a lot of manhours.

One of the big problems you have with presenting an airline plan to any investor group is that you need to build credibility and confidence, not to mention you have to be able to identify the Who's Who of the airline investor population. Having listened to many of my peers on the subject, I find it more of an exercise in pessimism and cynicism, for even those who think the model is sound appear to have lost their confidence in the industry. It's hard to tell them that this is going to work when most new start ups in Australia have failed. It's important, therefore that we not only develop a good plan but also have the driver for it. It's a chicken and egg problem. I can confirm we are looking for a person of good repute and notoriety to lead the venture through this phase and although declining, have been honoured by a few who have encouraged us to go on and challenge the status quo.

I can confirm an airline and a venture capital partner have taken an interest in the business plan and due diligence preparation is underway but it is very much at an early stage and I would not like to speculate where it may lead. I will, however, say that a view has been expressed that the model may satisfy the Australian Government preference for a home grown carrier to meet new bilateral arrangements. It should be pointed out that increased competition is a stimulator for reduced inflation.

The Gold Airways model requires a solid investment of cash and although the ability to acquire aircraft remains fluid, we have chosen not to start the AOC process until the venture is fully funded since this would put us and our investors in the lowest risk position. Of course, it goes without saying that, without an investor, the process cannot start.

A lot of people are supportive of what we are doing; some say you cannot succeed in this world without money. Others say if you are not willing to have a go, nothing will happen and I think every entrepreneur has their own story to tell on that score. If money and planes are all that separate us from a fabulous opportunity, I think you do what you have to do. For me personally, I have found it a stimulating exercise of smashing the inner boundaries of risk and failure that invariably causes many of us to go from invincibility at the age of 19 to non-risk takers at age 55. I, like probably many of you am not a rich person, and yes there maybe many of you whom I know personally that may think I am eccentric or sometimes, from our associations in the past, not to your liking or a bit odd. But then that's me and my idiosyncratic nature may put me in a different category. I think challenging the status quo is the natural thing to do if you want to challenge the so called uncontestable market.

If you have any specific questions you want me to answer about Gold Airways I will be happy to do this provided they are sensible. I won't respond to personal attacks on me and may ask the moderator to delete such posts. In this way I hope to put some truth into this thread.

Thanks

Regards

Jens Buche

[Ian Cognito]

Thanks for the insight. I wish you all the best of encouragement for the success of the venture.

Ian

[Jens_Buche]

Thank you Ian.

Regards

Jens

[Apophis]

cobblers !

[Escape_Slide]

Hello Jens Buche,

I don't think too many people would have had the strength of character to put their name on pprune. Good on you mate. I challenge the rest of you to do the same. :ouch:

Can I ask, Jens, how does Gold Airways propose to tackle rising fuel costs?

[Jens_Buche]

Hi Escape_Slide,

The problem with rising fuel costs for a start up operator is that the operator can either purchase fuel at the spot price, which is typically around AUD 1.30 for a litre of Jet A-1 kerosene at present, much as you and I do when we buy petrol for our cars, or buy a fuel contract in advance and get the benefit of a bulk discount from the day to day variation in the spot price for taking up an expected consumption. Almost invariably, the operator has not hedged the first batch of fuel needed to start up. Hedging doesn't work well if the price of the commodity is consistently at one level and doesn't work well if the price is falling. If a start up is to engage in hedging, it is best done as soon as it knows it will receive its AOC. The start up then has to actively trade in hedging contracts. This costs money to do.

We've looked at hedging in a variety of ways and settled on a dynamic hedge method that involves layering the crude and refined commodity of a short and long period using derivatives. What this enables us to to is to take a long and short position thereby minimising the impact of sustained rises. It largely works on the basis that we buy and sell the contracts very rapidly and are satisfied with only making small gains with each trade. We've been looking at a 95% hedge based on future risks. We are prepared to look at a high percentage when the market is very volatile.

When airlines make good profits, they will usually try to hedge their fuel position. If they do not hedge and the price of oil goes up, they will spend a high percentage of their income on paying for the volatility in the spot price.

Hedging fuel through derivative options doesn't solve the issue of how to stay competitive in a market that has rising fuel costs where the big players get better bulk discounts or have well established hedges. You can simply raise airfares, but who will be the first to do that and not dampen demand? You could even pool your fuel orders with a similar sized player or an industry partner to get better rates. In Gold Airways situation, the latter is a real possibility. VirginBlue and Qantas should do it because the economies of scale make for a very positive outlook for such a consortium.
The reality is you have to raise airfares to remain profitable. By how much is more to do with the level of hedging you have and to what degree your competition may follow your lead. It makes for an interesting challenge.

[gas-chamber]

"a complete airline management out of a box" Now I've heard lots of yuck-speak in my time, but this really raises the bar. What does it mean? Tarts jumping out of cakes?

[Apophis]

the guys been using microsoft flight sim way to much.:=

[Fountain Pen]

Well the last two replieas just goes to show the intelect of the readership on this website.....Mr Buche has given us a fantastic insight in where Gold Airways might be at this stage...

A question was asked about the rising fuel prices as well...and that could not be understood by the intelectual giants that know nothing else but to denegrade anything they don't understand...or want to understand....its so typical...

Its obvious to me that the negative replies are from those that are in an airline and do not want any other competition, so their positions will not be threatened.....:hmm:

[gas-chamber]

Au contraire, Fountain Pen, I no longer work for an airline and am semi retired, so could not feel threatened by anything Gold Airways did. But when I see all these fancy words about five year cash flow projections, hedging, derivatives etc I sense that Mr Buche is baffling us with a lot of theory. I wonder what Geoff Dixon or Richard Branson would make of all this.
My advice to investors is if you like high stakes and shiny new jet planes get you all hard, go for it. My advice to wannabe employees is don't give up a cent of your money or an hour of your time until they put the deposit into CASA for the AOC. Then maybe donate some time if you can afford it, but not money unless you too are a high roller. I am not saying it won't get up. I am just sceptical because I don't think Australian investors will come to the party and can't see that Asian investors would bother when they could pick up Skywest, Rex or Alliance with an AOC and a known market and re-equip them if they thought the growth was there. And I stand by the 'out of a box' comment -what a total tosser usage of the English language.

[Jens_Buche]

If any one would like to ask more questions about Gold Airways, please do so.

Gas-Chamber, for your information, Gold Airways projections are based on generally accepted accounting principles. It is necessary to run the projections in order to establish the financial ratios, for instance, that indicate whether the business is likely to exhibit a good probabilitiy of survival. The projections are used to establish trends and when marked up against market (airline industry) behaviour, can establish benchmarks on which to make decisions. It's our duty of care to present an investor who is financially astute and savvy with an understanding of how the model will behave in certain market conditions. If we thought the model wouldn't stand up to scrutiny, I would be the first to say don't present it to investors. As an airline establishes itself, the accounting can become more complex, of course. Off Balance Sheet Defeasance is common in the industry, and the recent debacle in the press about VirginBlue and the GST on new aircraft, just highlights what can be done. What one hopes to achieve with this is to place the model into a strong competitive position and mitigating the risks. That is what lands you a good credit rating. On one hand you have your financial risks and on the other your business risks. We've addressed all these things and cash flow adequacy, hedging, derivatives and five year cashflow projections are part of that stream.

In respect of your further comments, Gas-Chamber, you do place too much emphasis on the AOC. It's far more important for CASA to issue an AOC to organisations that fully understand their responsibilities under an AOC. The fee to CASA for assessing an AOC application is a mere drop in the ocean compared to the investment required to fly. So it's not something I would dwell on. Having said that, it is true that if you purchase an airline with its AOC you do have a starting point. However, because the Gold Airways model is so vastly different from existing airlines, there is no real tangible benefit in acquiring someone else's AOC.

I will point out that your last comment is fairly true also but only in the sense that investors have had no confidence in this Australian market. Gold Airways is about to change that as a lot of work has gone into analysing the idiosyncratic behaviour of the Australian markets and the markets of Australia's Asia-Pacific neighbours. We think that our model is precisely what the new investor will want but then, we need a credible business plan to back that up and we do need to get them to look at it, of course.

You sound like you are starting to think about the issues fairly carefully Gas_Chamber, so if you want to put some sensible questions up to clear the air, I will be happy to answer them.


Regards

Jens

[Air Ace]

Down to the hard questions:

1. What minimum (non debt) share holder's equity do you consider is required as a pre operating necessity for Gold Airways?

2. Do you have, or have guaranteed access to the share holders equity Gold Airwways requires?

3. Considering your projected off balance sheet liabilities for the aircraft you proposed to operate, what is the maximum debt to equity ratio you consider viable for an Australian start up airline like Gold Airways?

[Apophis]

Its all CRAP will never happen.

[Richard Kranium]

Ahhh Apophis, seen all your replies on this site and have come to the conclusion that if you had another brain it would be lonely :ok:

[Apophis]

Ahhh Apophis, seen all your replies on this site and have come to the conclusion that if you had another brain it would be lonely :ok:
At least i know this is all bull#^it People from ansett should just wake up its long over and never going to be back under what ever name is made up:ok:

[Chocks Away]

At least he's got off his ass and done something Apophis!
Better than what you have to "put up" or offer to make the world a better place...:hmm:
When was the last time you flared your nostrels, breathed in deep the fresh air and kept the dream alive? Make things happen, help, or get out of the way, I believe the saying is.
(...and I've nothing to do with Ansett too.)
Sadly:ugh: , this Pprune site and especially the Downunder section, has denigrated into a pityfull mess of negativity, backstabbing and sniping.

"...out of a box" , as in "no further work required", product complete on purchase... a complete package.

On a better note. Jens: You're spot on with the fuel and hedging, as I helped sway my last company across to "piggyback" off a major players' fuel account ... saving AUD$200/hour operating cost.

Best of luck:ok:

[Escape_Slide]

I must confess it sounds complicated, but I've read on the web how all those airlines are doing something with hedging now realising they didn't do enough before, so I think this subject is pretty serious. I take my hat off to you, you seem to speak at a very advanced level and when I read stuff from the investment world and compare, you don't appear to show any lack of understanding - so I am with you mate, all the way.

[Truth Seekers Int'nl]

......methinks Air Ace has got missuer jens buche by the aggetts!

[Jens_Buche]

Thanks Air Ace,

Answering these candidly,

1. What minimum (non debt) share holder's equity do you consider is required as a pre operating necessity for Gold Airways?


When we set out to do the business plan, we put in a number of constraints which were based on start up behaviour of the entrepreneurial airline ventures around the world. We examined very closely how they were doing business, how they were managing competion, and who had backed them, looking very closely at the backers' behaviours. Typically, the start up investment was in the order of USD80M-110M for a similar operation to ours.

This presented quite a problem for us as DOTARS (Australia) data only supported a long term average load factor of 65% and that in a LCC environment the break-even load factors were up around 80%-85% which basically meant that we had to look very closely at our start up and other future costs to pull down the break-even point since, on a point to point network in Australia, we had reached saturation level. We conducted a lot of research into the behaviour of competition, in particular we noted the some seat sales did not produce the load factors need to break even. Melbourne_Launceston is a very marginal market for instance. This port can barely support one airline let alone two or three running high frequencies with large jet aircraft.

We went over our figures quite a bit, looking at where we could trim costs, looking at how we could operate more efficiently. Fuel was a big headache and we put a team together to work on that issue alone.

We finally arrived at a figure of AUD70M, however, if we were to be able to engage in fuel hedging and protect our competitive position for a long time, we needed a financial hedge of about AUD30M.

2. Do you have, or have guaranteed access to the share holders equity Gold Airwways requires?


I think this is to early to predict, we had one prospective investor who had indicated they needed to start by October 2006, but they have since reserved their position, because of the aeropolitical climate. This international operator was the reason we looked at the A350 and A380 maintenance in Melbourne and part of the plan was to purchase the Ansett Maintenance base. Those talks have been put on hold indefinitely.

So in a nutshell, no, we don't. There are a few more steps before we could make some sort of official announcement anyway and that is based on getting the investor mix right. I had communicated with the heads of some other prospective start ups and exsiting operators and although the talks were fruitful, the baggage they are carrying would not advance Gold Airways purpose. We are not banking on support from the State Governments as we believe we need to stand on our own two feet first but, without sounding naive, investors usually expect State Governments to kick in.

I can tell you that we are currently looking at a ring-spoke system which will connect Australia through Asia, China, Europe, USA and the Pacific with the prospective investor eager to expand globally with the Gold Airways domestic network at the core. It's very much an emerging market strategy. I can't be more specific but the investors have a vested interest in the hub and spoke partners which makes this possible. It would allow Gold Airways to fly internationally globally. Early days for that plan to fly though and may require extra cash to hatch.

3. Considering your projected off balance sheet liabilities for the aircraft you proposed to operate, what is the maximum debt to equity ratio you consider viable for an Australian start up airline like Gold Airways?

Without pre-empting what Gold Airways may do in its accounts that it is allowed to do to legally minimise tax, and the business plan having been based on generally accepted account principles and Australian Tax Law/International Tax Law, as appropriate, its average debt to equity ratio is figured to be around 0.25 over the five year period. If you include the outstanding aircraft lease liabilities (i.e. the contract terminal value) you would get a higher figure. We would then be looking at between 0.5 and 1.5 as a typical range. We need to keep the debt to equity ratio low for competitiveness but not so low as not to take up new opportunities.

Accounting for debt is a complex subject. For instance, some airlines make provisions for their employee entitlements as just a book entry. Gold Airways banks its employee entitlements and holds the money in trust. Some might argue, the money should be used to help the airline grow and buy assets against which it can borrow to make entitlement payments. These complex decisions expose the airline and its directors to risks. We've tried to mitigate the risks in order to attract a strong credit rating to survive unexpected competition or catastrophic events like a price war, another start up or the bird flue pandemic.

We've looked very closely at the financial reports of many of start up carriers around the world, plotted their financial progress and trended their behaviour against the various markets. We've looked at their strengths and weaknesses and how decisions impacted their progress. We found a good deal of cognitive bias played a role in the failure for some.

I think we've achieved some good financial ratios and they stack up fairly well against VirginBlue Airlines and JetBlue Airways, which are regarded as fairly successful. However, we have achieved a cost per available seat kilometre comparable with the LCCs and a Price to Earnings ratio on plan of half that of VirginBlue.

Regards

Jens

[Air Ace]

Interesting and candid response indeed. It's not for me to comment on your equity projections, suffice to say from memory Bryan Grey had similar equity and similar new aircraft when he started Compass so many years ago - when fuel was cheap.

When the inevitable price war commenced, Bryan told me his flights were over 90% load factor - but break even load factor was 114%!

I would think 80% to 85% break even average load factors would be fraught with danger in the Australian domestic market. Subject to route mix, one would think 70% average load factor would be a far safer bet.

In summary, you've done the home work and don't yet have the equity. Good luck - I think you'll need it.

[Apophis]

At least he's got off his ass and done something Apophis!
Better than what you have to "put up" or offer to make the world a better place...:hmm:
When was the last time you flared your nostrels, breathed in deep the fresh air and kept the dream alive? Make things happen, help, or get out of the way, I believe the saying is.
(...and I've nothing to do with Ansett too.)
Sadly:ugh: , this Pprune site and especially the Downunder section, has denigrated into a pityfull mess of negativity, backstabbing and sniping.
"...out of a box" , as in "no further work required", product complete on purchase... a complete package.
On a better note. Jens: You're spot on with the fuel and hedging, as I helped sway my last company across to "piggyback" off a major players' fuel account ... saving AUD$200/hour operating cost.
Best of luck:ok:
This guy had the nerve to advertise jobs about 1 year ago on the australian job search site get friggin real he had no positions then or now or ever he is just a dreamer with no money and dodgy internet site that means nothing wake up to yourself.

[Hugh Jarse]

Jeez, the record's scratched:ugh:

I recommend a course of Tryptanol or Prozac.:sad: :oh:

[Jens_Buche]

Thanks for the heads up on Compass Air Ace.

You are not far off the mark actually. Load factors do need to take into acount the type of aircraft you operate. If load factors are consistently at 70% on average, you could extrapolate this to choosing a different aircraft type providing it didn't impact on your peak loading times, subject to route by route market forces, of course. The Gold Airways model can accommodate any of the A320 family aircraft, but to make a mixed fleet of the same family work you need to juggle your sectors so that a replacement aircraft is available on the tarmac that can handle the boardings. This can be at odds with delivering the service with a competitive edge. Thus if you operated an A320 and an A321 side by side, there would come a time when you could not accommodate all the passengers in a one way swap to the A320 because there aren't enough seats. Going for a smaller aircraft then has its own problems as you may need more of them to improve your service delivery at peak times. And at peak times, airport slots are limited, as you know. The Airbus A320 family concept is workable provided you stick to doing it the way Airbus suggest and that then yields good results. Compass I sold seats below cost, it would appear, and that does bring break even load factors beyond the nose of the aircraft and multiple collapses are not impossible to visualise in those circumstances.

In respect of the comment about equity, that is fundamental. Of course the drivers in the product development can be manipulated so that if an investor wanted to, we could bring the Gold airways staged development forward. That would mean that we could compete with a high value product and service delivery very quickly. That means extra cash. This is the case with Virgin America. However, it is not an efficient use of investor's money unless you can see direct tangible benefits. Hence you tend to find airlines starting on a shoe-string budget then, when they've learned to walk, exploiting their industry debut with vigor - usually with huge marketing budgets and securing future aircraft orders.


Regards

Jens

[Jens_Buche]

I can confirm we advertised for expressions of interest for positions with Gold Airways. We've identified many good people with excellent credentials. In time, we'll contact these applicants and invite them to interviews. However, all applicants were made aware of our position so there was nothing unethical or sinister about what we were doing.

Part of a business plan is to identify the resources available to run the airline. Whilst the pace with which we have been moving along has been a little slow, we've called for those expressions in line with the anitcipated start date. The start date keeps moving ahead of us because we have largely been altering the model to keep pace with the dynamics of the industry. You cannot ignore the fact the JetStar is now out there and that Ozjet is still there, albeit doing charter. So we have to take that into account.

If you have any more issues on your mind about Gold Airways, I would appreciate being allowed to comment on them.

Thanks

Jens

[Parrhresiastes]

Yeah well I've got a very deep drawer full of "out of the box" even "turnkey" business plans for aviation enterprises, some of them bankable.

All need various "market forces" to become aligned, realigned, appear, disappear and so on, but they also need real equity. The intelectual property may notionally be worth squillions but an investor would be betting on its ultimate worth.

As Air Ace avers the magic break even number is 70% (to be more accurate 68% is the number given that the travelers by type and time over a sufficiently large population and size of aircraft, are essentially random) assuming the average per seat cost is recovered within that parameter.

In very simple terms the first step is to research the "number" of travellers available, apply the aircraft "size" (seating capacity) and calculate he number of flights needed to produce a 68% seat load factor, then calculate the fare required to break even on the utilisation produced.
Of course peak schedule times, aircraft size and type and other factors are brought to bear but that is the simplicity of it.
Coupled with an underlying axiom, frequency frequency, frequency forcing the choice of type to smaller, more efficient or bigger conundrum which brings you up against the cost per seat mile equation.:{ Never told you it was easy.
Second step is to research the "affordability" of the fare in the market researched and adjust the above numbers and aircraft type until it comes in to or stays out of focus.

You then, either have a business plan or you do not.

However in the broadest sense

All other things being equal the number of seats that you can expect to fill under normal conditions is relatively independant of the fare as that relies on largely random events in so far as when a passenger needs/can afford to fly and why in relation to each ones personal life events current at the time..

It means if you heavily discount some seats against the average seat cost at the 68% break even number, then you need to get an equivalent premium fare to offset it. Or if you go up the market and sell premium class seats at economy fares, the calculations get a bit more complicated but the basic underlying premise remains.
IMHO the single logical failure of the Ozjet plan was that it was in effect trying to sell economy fares with a premium class seat the filling of which was required to break even. All the toss about cheap airframes compensating for extra fuel flow and maintenance was just that, it's all about seat mile costs.
Bryan was down the other end of the spectrum needing 114% to break eve.

Fuel hedging is a necessary instrument but if you are relying on your success in that to make a profit then you are not in the airline business you are in the hedge market. And if you are good at that you should just concentrate on the futures market, there is hugely less risk and you can close out and walk away if it gets to hard, which is a bit different from walking away from an airline.

The "profit" is in the single %age points you can get above the 68%.

That's the basic rationale behind the heavily discounted and conditioned apex fares, trying to run an operation on these fares as primary revenue is doomed to failure as is a full premium fare. We have seen examples of both recently.

The statistically iron bound laws of random behaviour are ignored at your financial peril. You can fiddle around the edges, even take the odd gamble to suss a market, but the house always wins.

If Gold are having trouble finding an equity partner, and they WILL get lots of tyre kickers because these guys have guys travelling the world, and I have flown a few of them of them around, whose FULL time job is hunting out "deals", its because Gold appear to be trying to find a partner who will allow Gold to bet with the partners money against the "house".

Now, if Gold were to stump up the "house margin" win lose or draw as collateral they might get a taker but he will want mostly all the chips. The long suffering individual consultants may or may not recoup their time and or get a job, but it is not the same as money in the bank.

[chockchucker]

Jens,

What's your guestimate on a start-up date? You've been at this thing for a long time now and, whilst aknowledging starting up an airline is no simple task, after a long enough period of time people will eventually suggest that you either "sh#t or get off the pot".


Due to your reputation in the maintenance side of the industry, you obviously have plenty of sceptics. Personally, I wish you all the luck in the world. I like to believe that your venture will succeed so as to perhaps provide more job security for those of us who continue our chosen careers at the whim of bean counters. History however, suggests that, unless you have a team of investors with mountains of money to throw away, gold airways will remain a pipe dream. Pure and simple.


Life post Ansett hasn't been kind to you Jens. In that I simpathise with you. However, you will not be held in very high regard if your venture is not a genuine one. So I would suggest that you consider your position carefully before giving people hope where none exist's.



All the best.

[Jens_Buche]

Your comments are well put and very valid Parrhresiastes. Gold Airways is not, however, having trouble finding an equity partner, in fact finding a suitable equity partner requires expressions of interest to be sought first and your'e only really in trouble if you consistently get a no once the plan has been hatched to them. Thus we are nowhere near having any sort of trouble - we just haven't really had the chance to expose our plan to those who may be interested.

Nevertheless, it is very much like playing roullette. At this stage we've been fairly selective whith whom we are dealing so let's just say its all happening in the high-rollers' private room rather than in the games room of the casino. Tyre kickers can expect some pretty complex background checks.

Much has been done to protect the venture consultants interests but it is a risk you take. We've avoided making it too difficult for for the investors to allow the consultants to take a slice of the action based on the vesting of founders shares and taking up key positions (for those who want them) for salary. An investor would want the founders to stay because they know the inner workings of the model. That's not to say other talent is not employed to make the plan work more efficiently once the airline is flying.

Good comments Parrhresiastes.

Regards

Jens

[Jens_Buche]

Hello Chockchucker,

OK, our basic constraint is with Melbourne Airport which requires us to give 6 months notice of start up. At this stage they have already constructed the new check in areas which VirginBlue will use for a short time until the construction is completed to expand T3 - that's behind schedule. (These are opposite Obriens Pub in the terminal). So whatever we do it will be at least 6 months before we fly and unless we can pull a rabbit out of a hat with the airport I cannot see that changing. They will certainly want to know when we are funded. We are not interested in flying earlier unless we have had time to roll out our 2-3 month marketing campaign. With it being June 2006 already I am not optimistic about starting in 2006. The problem with rolling on like that is that your business plan has to be continually updated and your market watch intensified.

Timing is very important, planning is also very important. Unless you are actually doing this sort of work you don't appreciate why it takes so long.
An airline can typically take 3-4 years to get off the ground, and then only with money.

Intrepreneurial stewardship of the most recent airline failures in Australia leads me to believe that it is time to change the way we are doing things. That's the difference. If you are prepared to think along the lines you suggest, no amount of money will save an airline in Australia. It's proven by history that you have to get out of neo classical thinking to make it work.


Regards

Jens

[Woomera]

The title of this thread is "Wot's the latest with Gold Airways?"

It is not an opportunity to attack individuals personally.

Please adhere to the thread topic.

Sunny Woomera

[Jens_Buche]

Thanks Woomera,

I just want to point out a couple of things.

Firstly, my comment referring to "airline out of a box" is probably more to do with selling the concept of a packaged airline product to an investor. That is complete with business plan, operating procedures and people that can run the airline. Acquisition of aircraft is simply part of the plan and it is hatched with the right amount of money. Investors appear to like this concept.

That is all good and well and it takes a heck of a long time to get that information together. We set about to keep our work original, revisiting industry regulations, getting the assistance of the aircraft manufacturer and suppliers. However, there is more to it than making sure the financials and technical issues work out to be competitive. This brings me to my second point.

Part of the big picture is asking yourself, why are you doing this? How is this model going to be placed geopolitically and aeropolitically? What is the centric market focus and how is that going to be achieved? How will the other airlines react? Does the public really want this or is it just that we think it wants this? It would have been very easy for us to follow in the shoes of Ansett Australia because we were passionate about finding a replacement for it and the public were clearly affected by its collapse but, had we done so, we'd be just another statistic in Australian airline failures. Wrong model and wrong model for the new marketplace. We had to challenge the whole concept of the way Australians believed airlines should operate in Australia. This meant also challenging our own reasons for deciding to do something in a particular way. I know we did on many occasions come to the conclusion that if the numbers didn't stack up we'd scrap the plan and start again.

Regards

Jens