Air Line Set up

[delay]

Ive always wanted to start my own airline and have been researching the thought for the last few weeks, so far ive decided to keep toronto as my hub and to fly to other regional airports such lake simcoe (wasagha beach) and montreal.

The Idea was to lease a 20 seater turbo prop and keep flights at $75-$200. It would take quite a while to break even but the concept was to concentrate on volume while flights are efficient getting customers from point A to B.

My first question was besides the air taxi operators certificate, a chief pilot, an operations manager, maintenece, landing and fuel costs what are the key concers when starting up (assuming my finances are in order)?

My second question the number of turbine airplanes to choose from is huge! would anybody suggest a fuel efficient/maintainable and commercialy feasable aircraft for this kind of operation?

[niknak]

There's an old addage in the airline industry: If you want to make a small profit in aviation, start off with a big one.

Your start up costs are going to be huge, assuming you find an aircraft to lease and can pay the deposit, you have to recruit pilots, engineers, management, office staff, someone to do marketing and run the reservations - all these people have to be in place a long time before the first departure and all will want to paid the going rate.

Whatever your routes are going to be and assuming you fill every seat on every route, at $75 per seat you'd make $1500, at $200 you'd make $4000, and that's before you pay any of the above bills.

If that wasn't enough, there couldn't be a worse time to start up a new airline venture.

If you really want to see what it's all about, go and get 10 years or so experience in aviation or another major industry then see if you're ideas are still feasible.

[dada]

youre dream will become your biggest nightmare. thats aviation for you

[delay]

Start up Costs:

Leasing an aircraft for 6 months at $30,000 a month?

Biggest problem would be staff, cant afford aanything more than a chief pilot, a maintence manager and an operations manager.

Landing charges? Aircraft isnt going to be that heavy and the aim is to turn around as quick as possible

Marketing costs? I would like to think I have economies of scale from my other business ventures in the past

Worst time to start up an airline?

Economy is in a mess, peoples disposable incomes are falling, oil prices on the rice....all true EXCEPT:

Aviation industry still predicted to be on the rise in Canada for the next 5 years, it would still be preffered and cheaper to fly than to drive to montreal on the 401!
Oil Prices?: On the rise but aviation fuel isnt rising as quickly while hedging and other block discounts that are flexible with air BP.

While the big carriers have ecnomies of scale on other items we can cut down costs on several elements of our operation such as landing charges, smaller hubs, passenger meals, smaller marketing costs and taxes


Im not saying by ANY MEANS this is going to be easy, or this is going to get off the ground. Wer'e still in the planning stages, we want to offer something different to customers

[MUFC_fan]

Have a look at Manx2 (a regional airline in the UK) - website name is obvious.

They operate 19 seater a/c which they wet least, operating multi-daily flights to most destinations and have seen off two sepeerate airlines on their two strongest routes with 24 months.

They operated the Let410 when they began (still do) which is slower than the Metros etc. but over a couple of hundred mile distances doesn't make a difference. They are extremely cheap to lease as they are quite old and they sip juice slower than the Pope does alchohol!

They are doing very well and look to carry on doing so as they offer more flights and cheaper fares all the time. There cheapest fare is £15 single inc. all t&cs! Probably (after FR) the cheapest in Europe!

The best way is to start with another airlines AOC and lease in a/c so you can concentrate on building up a reputation and dealing with all other problems that come along. Once the people start to come back again and again you may then have time to start to look at the operational side and work on your own licenses and dealing with your own crews etc.

Good look!

[dada]

come on MUFC, how woud you know?::confused:

[MUFC_fan]

What do you mean?

Surely the best way to go in by out sourcing as much as possible. It is pretty obvious that it is hard to get and business going and reputation is everything. If he were to launch and airline he would need to make sure his can build a good reputation ASAP less nobody will fly with them. Airlines was passengers to return - the main way of doing that is to make sure they like the product which needs a lot of concentration to perfect.

Look at Manx2, they have sourced out as much as possible so that they can concentrate on other things, also it saves a lot on setup costs and dealing with the CAA. They can now build an AOC in their own time and when the time comes for them to utilise it, they will already have a respected, well run, lean airline which they can grow at their own pace.

I would not believe for one second that Manx2 would be in the position they are now if the set up by dry leasing/buying aircraft and hiring pilots etc. as they simply wouldn't be able to afford it! Look what they have done now - supplied tens of jobs on the island to people who lost theirs in the BACON sell out to BE! Without oursourcing their operations they would not have been able to afford it!

Pretty simple really!;)

But as they say (inc. fellow PPRuNers):

"The way to become a millionaire in the airline industry is to start off as a billionaire."

[ATPMBA]

Having ops manuals written $
Obtaining commuter aircraft $$
Startup operation costs $$$

Commencing operations and proving all the naysayers here wrong – PRICELESS

[delay]

ATPMBA :

for all the naysayers, putting them off:pricesless

haha for everything else ill be using MASTERCARD...

[Notoc]

Oil Prices?: On the rise but aviation fuel isnt rising as quickly while hedging and other block discounts that are flexible with air BP.

Qustion for Delay : how do you hedge oil prices with Air BP ?

Please explain

[boredcounter]

Manx2

Toronto as a hub? Hungarian Let 410's? Canada ain't (EU) Europe.

[MUFC_fan]

If you read his spec. he says that he wants a 20 seater a/c - 19 is near enough.

All I said was look at the Manx2 way of launching - lease in the service which saves a lot of money!

[LGS6753]

Not much talk on this thread about marketing. A major and ongoing cost. Look at advertising by the likes of EasyJet and Ryanair (in the UK). Still advertising heavily even though their brand awareness is extremely high.
Marketing costs will also include a website including booking engine. It must work and work well from the date you announce firm details, so lots of early preparation work.
And how have you determined your routes? Done any research? Asked any potential SLF? Looked at competitors? Determined pricing strategy?

Lots to do....:eek:

[AvEnthusiast]

I wanted to know if there is a standard format for setting price strategy, I know they take many factors such as, fuel consumption, airways charges, crew wage per hour, attendants wage per hour, but is can someone provide me some tips how to really calculate a route price?

[The SSK]

Work out how much you think it will cost, then double it.
Spend half the extra money on researching what the market wants
Spend the other half on delivering it.

Make 100% sure things go right from day 1.
Get your passengers saying ‘what a great little airline!’
Make sure you don’t lose that as you grow

[The Real Slim Shady]

Why have a 19 seater rather than a 30 / 50 / 80 / 100 seater? The basic difference is the different AOC ( in the UK at least), increased lease, insurance, maintenance and slight fuel costs but increased revenue.

Up to 1 hour a turboprop is fine: after that you need to be looking at a jet. A 30 seat TP will set you back $30K a month in lease, about $350 in burdened maintenance per flight hour but will sip fuel. Handling costs are up for negotiation, then you have nav and landing charges. Typically you can break even with about 22 pax at $50 per seat one way.

[ATPMBA]

Delay,

Congratulations on your interest to start a commuter airline. It is a worthy and noble project to be involved in. Only a select few have started airlines and even fewer have kept their businesses going for a number of years.

Airlines are a complicated business. This endeavor will probable the most complicated thing you will ever do and it will be the most personally rewarding.

Airline startups need capital, human capital, aircraft, routes, patience, and belief in yourself that you will succeed.


Please check your Private Messages.

Ken

[boredcounter]

You are right mate, just (if anything) a bad example, EU flooded with cheap aircraft compared to National prices. Wasn't having a pop.

In fact, if memory serves, your 19 seats is near enough, is a very true and good point to be made, +19 fitted seats being a trigger for many different regs.

[delay]

notoc:

i didnt mean to imply that I hedge the price of crude oil with air BP! I meant to say that Im sure I would be able to get block rates that are negotiable over time.

I was considering Torontos Buttonville as my hub, Any thoughts on that?, I plan to present a complete business plan by the fall.

[boredcounter]

What have you planed for Jet A1, burn per hour and cost price?

[PhilM]

Whats your plan for aircraft spares?

Don't know your involvement in aviation at the moment but aircraft go tech, lots!

Can't just assume you'll source/buy the spares as and when the aircraft breaks as you'll be forever grounded. Plus you'll need more than just a maintenance manager!