Airly tries to disrupt aviation
Thread Starter
Airly tries to disrupt aviation
Good idea and I have often wondered why REX or QLink never tried it.
However the phrase 'borrowed AOC' has always ended in tears with CASA. I can think of a few operations where CASA has shutdown Ops of people trying exactly what these guys are trying to do over this issue. Not to mention the whole Skytrans fiasco.
I can only guess Airly are going to try and say they are a 'charter broker' and that the flights are not available to the public generally.
The other issue is fog. Given that SYD and MEL support low viz ops, how happy is the customer going to be sitting on the ground in Bansktown watching all the jets on flightaware doing autolands and getting on with business.
http://www.smh.com.au/business/aviat...08-gm1q38.html
Frequent travellers between Sydney and Melbourne face several frustrations: traffic to and from the airport, long security lines, regular ground delays and often the need to circle the congested air space before landing. It can turn what should be a one-hour flight into more than four hours door to door.
Enter the disruptors, Luke Hampshire, 28, and Alexander Robinson, 32. The young pair, both of whom have aviation experience, are looking to take a business model proven by the successful start-up Surf Air in California and transplant it to Australia, albeit with a few modifications.
The idea is as follows. Several hundred members will pay a $1000 joining fee and a $2550 monthly fee for effectively unlimited flights between Sydney (Bankstown Airport), Melbourne (Essendon Airport) and Canberra on an eight-seater King Air 350 turboprop. The company, Airly, will offer an initial 54 flights a week between those centres, with plans to expand to Adelaide and Brisbane at a later date.
The several hundred we are looking for are keen as mustard to save time," Hampshire says. "It is going to save them about two hours per round trip. We are working off a membership number. We have a lot of people showing significant interest in it now. Once we reach that break-even number we launch."
Airly is just beginning its marketing campaign, but the idea has been in the works for more than six months, with Surf Air founder Wade Eyerly involved in one of the earlier guises. Robinson, a former Royal Australian Air Force pilot who will serve as Airly's chief executive, left a job at Caterpillar to focus on the new aviation start-up.
"I'm on full-time and Luke is on it as well," Robinson says. "Between us we are putting in some of our capital. It shows we are serious about this."
Sales and experience service'
The majority of the start-up funds will be raised from the $1000 joining fees, with the remainder coming from the founders and potential "angel" sources. Airly, which won't own the aircraft, calls itself a "sales and experience service" rather than an airline.
The first of three King Air 350s has already been ordered from the US through an aircraft management company. They will be added to the air operator's certificate (AOC) of an Australian company licensed for regular public transport (RPT) and then dry leased.
"The company in question will have no issue adding these aircraft to the AOC," Hampshire says, adding it already flies other King Air models.
The name of the AOC holder remains confidential, but Hampshire says Airly chose an operator with an RPT licence rather than just a charter licence to ensure it could remain flying even if regulations on charter aircraft are tightened.
Essendon Airport is closer to the Melbourne central business district than the Tullamarine facility used by the commercial carriers, but in Sydney, Bankstown Airport is farther from the CBD than Kingsford-Smith.
Robinson says he doesn't believe the use of Bankstown will be a deterrent in attracting travellers to Airly because many potential members live outside the eastern suburbs of Sydney, and even those who don't will appreciate that less air congestion will help lower the flying time.
"There is really no holding at Essendon or Bankstown," he says, adding that members can check in just 15 minutes before departure.
More limited schedule
Canberra was added to the initial destination list after the Airly founders discovered how expensive last-minute flights were from those markets, as well as the more limited schedule of the commercial airlines.
Challenges for luring frequent travellers to Airly will include their attachment to the lounges and other perks offered by Qantas and Virgin Australia, as well as the high frequency of commercial flights between Sydney and Melbourne.
Robinson says Airly will be complementary to Qantas and Virgin rather than a true competitor. "We still see or expect [members] to be using commercial travel for the majority of their flights," he says. "Frequent travellers will still fly commercial for their status and frequent flyer points."
Hampshire says the feedback from corporate travel agents is that there will be a place for Airly as a supplement to the larger carriers. Corporate memberships, good for flights for more than one member, will be available, perhaps used to reward highly valued executives.
"There is no price surging or last-minute change fee or baggage fee," Hampshire says of the service. "We fly whether there is one person or eight people on the plane. If we have one person on the plane it is not that we are losing money. We have that base membership."
Hampshire, who once worked at Regional Express, says he knows it can be inconvenient for business passengers with meetings scheduled when a half-empty flight is cancelled and combined with another one to cut costs.
He says there will also be advantages in having a bespoke service where the concierge on the ground knows the passenger's name and favourite drink and snack orders
Club atmosphere
In the air, the hope is there will be a club atmosphere where like-minded executives are able to chat.
"We are looking at an office in the sky, networking benefits for members," Robinson says. "We are trying to build a community of like-minded CEOs and entrepreneurs. Down the track we will look at Wi-Fi."
Another team member, Ivan Vysotskiy, has a technology background and is developing an easy-booking platform and mobile application to make the service even more convenient.
In California, Surf Air, which launched in early 2013 has more than 1000 members, has raised a $US65 million ($93.5 million) credit facility and expanded its list of destinations now its business model has been proven. Eyerly has since moved to the east coast of the US to found a new company called Beacon to offer unlimited flights between New York and Boston.
Airly has modified the Surf Air model by choosing not to own its own aircraft, in part to lower the capital intensity. And while Hampshire is well aware the business model is unproven in the Australian market, the young entrepreneur is confident it can be successful.
"It is still something we have to explain to people," he says. "They can't believe it is that monthly fee and you can get as much access to the planes as you need. We are so excited to get planes in the air in the second quarter."
However the phrase 'borrowed AOC' has always ended in tears with CASA. I can think of a few operations where CASA has shutdown Ops of people trying exactly what these guys are trying to do over this issue. Not to mention the whole Skytrans fiasco.
I can only guess Airly are going to try and say they are a 'charter broker' and that the flights are not available to the public generally.
The other issue is fog. Given that SYD and MEL support low viz ops, how happy is the customer going to be sitting on the ground in Bansktown watching all the jets on flightaware doing autolands and getting on with business.
http://www.smh.com.au/business/aviat...08-gm1q38.html
Frequent travellers between Sydney and Melbourne face several frustrations: traffic to and from the airport, long security lines, regular ground delays and often the need to circle the congested air space before landing. It can turn what should be a one-hour flight into more than four hours door to door.
Enter the disruptors, Luke Hampshire, 28, and Alexander Robinson, 32. The young pair, both of whom have aviation experience, are looking to take a business model proven by the successful start-up Surf Air in California and transplant it to Australia, albeit with a few modifications.
The idea is as follows. Several hundred members will pay a $1000 joining fee and a $2550 monthly fee for effectively unlimited flights between Sydney (Bankstown Airport), Melbourne (Essendon Airport) and Canberra on an eight-seater King Air 350 turboprop. The company, Airly, will offer an initial 54 flights a week between those centres, with plans to expand to Adelaide and Brisbane at a later date.
The several hundred we are looking for are keen as mustard to save time," Hampshire says. "It is going to save them about two hours per round trip. We are working off a membership number. We have a lot of people showing significant interest in it now. Once we reach that break-even number we launch."
Airly is just beginning its marketing campaign, but the idea has been in the works for more than six months, with Surf Air founder Wade Eyerly involved in one of the earlier guises. Robinson, a former Royal Australian Air Force pilot who will serve as Airly's chief executive, left a job at Caterpillar to focus on the new aviation start-up.
"I'm on full-time and Luke is on it as well," Robinson says. "Between us we are putting in some of our capital. It shows we are serious about this."
Sales and experience service'
The majority of the start-up funds will be raised from the $1000 joining fees, with the remainder coming from the founders and potential "angel" sources. Airly, which won't own the aircraft, calls itself a "sales and experience service" rather than an airline.
The first of three King Air 350s has already been ordered from the US through an aircraft management company. They will be added to the air operator's certificate (AOC) of an Australian company licensed for regular public transport (RPT) and then dry leased.
"The company in question will have no issue adding these aircraft to the AOC," Hampshire says, adding it already flies other King Air models.
The name of the AOC holder remains confidential, but Hampshire says Airly chose an operator with an RPT licence rather than just a charter licence to ensure it could remain flying even if regulations on charter aircraft are tightened.
Essendon Airport is closer to the Melbourne central business district than the Tullamarine facility used by the commercial carriers, but in Sydney, Bankstown Airport is farther from the CBD than Kingsford-Smith.
Robinson says he doesn't believe the use of Bankstown will be a deterrent in attracting travellers to Airly because many potential members live outside the eastern suburbs of Sydney, and even those who don't will appreciate that less air congestion will help lower the flying time.
"There is really no holding at Essendon or Bankstown," he says, adding that members can check in just 15 minutes before departure.
More limited schedule
Canberra was added to the initial destination list after the Airly founders discovered how expensive last-minute flights were from those markets, as well as the more limited schedule of the commercial airlines.
Challenges for luring frequent travellers to Airly will include their attachment to the lounges and other perks offered by Qantas and Virgin Australia, as well as the high frequency of commercial flights between Sydney and Melbourne.
Robinson says Airly will be complementary to Qantas and Virgin rather than a true competitor. "We still see or expect [members] to be using commercial travel for the majority of their flights," he says. "Frequent travellers will still fly commercial for their status and frequent flyer points."
Hampshire says the feedback from corporate travel agents is that there will be a place for Airly as a supplement to the larger carriers. Corporate memberships, good for flights for more than one member, will be available, perhaps used to reward highly valued executives.
"There is no price surging or last-minute change fee or baggage fee," Hampshire says of the service. "We fly whether there is one person or eight people on the plane. If we have one person on the plane it is not that we are losing money. We have that base membership."
Hampshire, who once worked at Regional Express, says he knows it can be inconvenient for business passengers with meetings scheduled when a half-empty flight is cancelled and combined with another one to cut costs.
He says there will also be advantages in having a bespoke service where the concierge on the ground knows the passenger's name and favourite drink and snack orders
Club atmosphere
In the air, the hope is there will be a club atmosphere where like-minded executives are able to chat.
"We are looking at an office in the sky, networking benefits for members," Robinson says. "We are trying to build a community of like-minded CEOs and entrepreneurs. Down the track we will look at Wi-Fi."
Another team member, Ivan Vysotskiy, has a technology background and is developing an easy-booking platform and mobile application to make the service even more convenient.
In California, Surf Air, which launched in early 2013 has more than 1000 members, has raised a $US65 million ($93.5 million) credit facility and expanded its list of destinations now its business model has been proven. Eyerly has since moved to the east coast of the US to found a new company called Beacon to offer unlimited flights between New York and Boston.
Airly has modified the Surf Air model by choosing not to own its own aircraft, in part to lower the capital intensity. And while Hampshire is well aware the business model is unproven in the Australian market, the young entrepreneur is confident it can be successful.
"It is still something we have to explain to people," he says. "They can't believe it is that monthly fee and you can get as much access to the planes as you need. We are so excited to get planes in the air in the second quarter."
Doesn't really add up to me. This guy's doing the same or similar.
www.flyelevate.com.au
(link may not work)
Long term, experienced industry people with a track record of success in aviation may be able to develop a model such as this but I just don't get that gut feeling these guys can deliver.
Seems like a shoe-string start up pitching to the big end of town. I think a lot of seasoned business people may just look at the marketing and the substance of the message and question whether to tust the reliability of the service and the service provider.
www.flyelevate.com.au
(link may not work)
Long term, experienced industry people with a track record of success in aviation may be able to develop a model such as this but I just don't get that gut feeling these guys can deliver.
Seems like a shoe-string start up pitching to the big end of town. I think a lot of seasoned business people may just look at the marketing and the substance of the message and question whether to tust the reliability of the service and the service provider.
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Autolands on cat 1 approach ? Mmmmm if the fog is that bad then there will be no auto lands from a CAT 1 approach. That is a manually controlled approach below 200'. Seems they will all be sitting on the ground as there is no 3A or 3B approach in oz.
Strange business model, which CEO wants to ride around in a Turboprop for 2 hours?
If the model was based on a jet it might just stand a chance.
But as people such as OZJET found out even a 737 with all luxury business seats was not a success.
So numbers to make you think based on a Citation 2 Sydney/Melbourne /Sydney
3.5 hours at $2500 per hour =. $8,750
16 pax @ $546 = $8750
In other words even with the lowest cost used jet at max capacity with 100% load factor still breaks even without any overheads covered. Not a good business model when for the same money you can get business class fares, lounges and the killer mileage points for the family holiday the CEO wants to take.
As I've said many times on this forum before, the only money to be made from RPT for small players is operating to remote or island destinations.
If the model was based on a jet it might just stand a chance.
But as people such as OZJET found out even a 737 with all luxury business seats was not a success.
So numbers to make you think based on a Citation 2 Sydney/Melbourne /Sydney
3.5 hours at $2500 per hour =. $8,750
16 pax @ $546 = $8750
In other words even with the lowest cost used jet at max capacity with 100% load factor still breaks even without any overheads covered. Not a good business model when for the same money you can get business class fares, lounges and the killer mileage points for the family holiday the CEO wants to take.
As I've said many times on this forum before, the only money to be made from RPT for small players is operating to remote or island destinations.
Well it works in Canada where the idea was poached from...
Thread Starter
It works in the USA too. Except they actually have more than one airport to fly to. Surf Air have probably more airport options to land at between LA and SFO than we have airports in the entire country. They offer real time savings as people can fly from their local airport. No such thing exists in Australia.
The biggest problem to growth of aviation in any form in this country is airports. The government thinks that you need to be at gridlock before talking about building a 2KM runway somewhere.
Imagine if they were offering flights out of Schofields/Camden/Bansktown/Hoxton park to Essenden/Morrabin/Geelong/Point Cook. I think then you will be talking about real time savings for people.
As it stands they are only saving time for those who live in Western Sydney and by landing at YMEN it really is no different to landing at YMML for those who live in Melbourne. Additionl to that you have the problem of fog.
So when you can drive the airport sit in the lounge jump on a flight get in 99 out of 100 how much time would you need to save to lose all that and for no inflight service on a B350?
That's the question for the customer.
The biggest problem to growth of aviation in any form in this country is airports. The government thinks that you need to be at gridlock before talking about building a 2KM runway somewhere.
Imagine if they were offering flights out of Schofields/Camden/Bansktown/Hoxton park to Essenden/Morrabin/Geelong/Point Cook. I think then you will be talking about real time savings for people.
As it stands they are only saving time for those who live in Western Sydney and by landing at YMEN it really is no different to landing at YMML for those who live in Melbourne. Additionl to that you have the problem of fog.
So when you can drive the airport sit in the lounge jump on a flight get in 99 out of 100 how much time would you need to save to lose all that and for no inflight service on a B350?
That's the question for the customer.
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Weather:
So the 'fogged in' that happens in Australian airports happens how many times a year? (With the exception of Canberra where it happens what? 7-8 times a year). Sounds diabolical
Customers:
It works in the US. So given that the Australian ANSP is soooo proud of the fact that SY-ML-SY is the 2nd busiest city pair in the world why couldn't this work between SY-ML-SY? Apart from the absolutely diabolical weather that Australia experiences of course.
So the 'fogged in' that happens in Australian airports happens how many times a year? (With the exception of Canberra where it happens what? 7-8 times a year). Sounds diabolical
Customers:
It works in the US. So given that the Australian ANSP is soooo proud of the fact that SY-ML-SY is the 2nd busiest city pair in the world
why couldn't this work between SY-ML-SY? Apart from the absolutely diabolical weather that Australia experiences of course.
I have found through regular and painful exerience that la-la high-end tossers only need to be inconvenienced once or twice by something completely beyond the operator's control (such as slots, wx or those $%%^&s in ML CEN) to dump the operator and go to someone else.
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