New start-ups

[Cautious Optimist]

After reading the slating of Global Airlines a planned new start up, it occurred to me that most new start ups get slated on here and often with good reason, it is one of the only occasions where keyboard warriorship appears to be vindicated. "Fred, Bob and Karen" on an internet forum should not be able to see things that so-called smart intelligent directors can't, yet that appears to always be the case with these start-ups. What scares me the most is that the people behind these attempts make it as far through the process as they do.

Anyway, to get to the question, I'm curious - what does a "proper" start-up look like to you folk? I liked what bmi tried to do towards the end, sending A320/1s on mid-haul routes, reckon that could be a good shout. What about a third package holiday player to give TUI and Jet2 a run for their money (wasn't the airline division of Thomas Cook the only profitable element?) Then there is the many regional routes that can't quite make the jump to a 50-seater ATR now that the Saab 340, Jetstream, D228/328s are dead (unless General Atomics / Deutsche Aircraft can really get the NG versions up and running - which I have my doubts about).

[cavokblues]

It's a very good question. Where or what is the niche in the market these days?

I can't see where any profit would really come in a small regional player- perhaps there is a small margin on some of the old Flybe routes from Southampton to France and Exeter to the likes of Paris and Amsterdam?

I sometimes wonder if another airline along the Palmair style - but larger - from some of the more underserved airports might be able to carve a niche or would you be eaten alive by TUI and Jet2? But then, some of Palmair's USP was their small size. It's hard to ramp that up to scale.

I would rather keep my money in a bank and invest in something else 😉

[Richard Taylor]

What's that ag-ed-olde phrase - 'how do you make a million in aviation? Start with ten million'... or words to that effect. AKA - it'll never work, give it 6mths etc... :O

[Cautious Optimist]

So if new start-ups just aren't feasible full stop, are we just supposed to whittle down to maybe a flag carrier, a couple of low costs, and zero regional operators as recessions and global crisis' slowly confine airlines to the history books?

[cavokblues]

Someone will always have the foresight to see an opportunity no one else can coupled with the business acumen to execute it and make money from it.

[DC3 Dave]

Someone will always have the foresight to see an opportunity no one else can coupled with the business acumen to execute it and make money from it.

Absolutely correct. No one on this forum needs reminding of the history of easyjet or Ryanair. Right place right time. Challenge the status quo, change the model. Whatever you do never take on the established players by offering 10% cheaper fares and a free carry on. Unless your pockets are as deep as theirs, they will wipe you out.

[cavokblues]

Also, I guess we need to mention how the existing players aren't exactly stagnant and are always spotting opportunities to evolve - Ryanair were very much a full frills airline when they started before becoming what they are now.

Channel Express wanted Jet2 to be a low cost airline before they became bigger than their parent company and ultimately switched their focus to holidays.

[LGS6753]

Many new start-ups will need the cash (or backing) to "invest" in losses for some years before they reach critical mass, or establish themselves in their niche. In the tech sector, most of the big successes (Arsebook, Google, Twitter, Amazon) have lost shed loads of cash before turning the corner. US investors seem to have more of a risk appetite for such businesses, so they reap the eventual rewards.
For these reasons, and some others mentioned in previous posts, I can't see (m)any successful new start-ups in what has become a very mature market with huge barriers to entry.

[TartinTon]

Part of the problem for new start-ups nowadays is the accessibility of data.What used to quite opaque is now quite obvious and decent carriers will adapt to counter potential opportunities unless they are prohibitively costly. That's not to say that opportunities won't be out there but they are a lot harder to find in todays environment.

Given the amount of greenwashing going on in the airline industry, a truly green airline starting from scratch could get a jump start on traditional (in its widest sense) airlines if they could find a way to offer a hydrogen-based/electric hybrid option at scale. Other than that it's difficult to see what innovations are available for a new carrier to create a true USP given the amount of change over the last 25 years.

Having said that wasn't there some idiot back in the 1890's who said that "everything that is possible to invent has now been invented". There's always scope for a new way of looking at things.

[DP.]

So if new start-ups just aren't feasible full stop, are we just supposed to whittle down to maybe a flag carrier, a couple of low costs, and zero regional operators as recessions and global crisis' slowly confine airlines to the history books?

The issue is that much of the boom in aviation over the last 2 decades or so has been fuelled by cheap fares. That was the selling point for the likes of RYR and EZY over the legacy carriers. However cheap fares are now simply a standard expectation for a large portion of consumers. You only have to look at conversations on various airport threads on this forum to see examples of that.

The problem for start ups is that, unless they have extremely deep pockets, it's very difficult for them to compete on price with established carriers because they do have the pockets to engage in a price war - which they will almost certainly win. They have to find some other niche to compete on, but given consumer expectations on price, that's a serious ask. To take Global as an example, their USP appears to be offering superior service, which will presumably come at significantly higher price point. Yes, there will be some people who will pay for that, but an A380 is an awfully big aircraft to fill.

[inOban]

My only thought is that when s/h A220-100s become available there may be routes that might suit?