Hello,

I'm considering to start an airline. I'm a typical 20 year old middle class American with a dream.

How do I go about starting a successful and profitable airline? What are some resources I can use to learn more? I know StartupBoeing is one resource.

Can someone give me advice on how to do it and where to start? Is there more down to beginners resouces I can use to learn?

Thanks

Zacb

Oh boy. Are you related to David Neeleman? Do you have access to a large pile of money?

I'd start by looking at what happened to all these guys: http://en.wikipedia.org/wiki/List_of_defunct_airlines_of_the_United_States.

Lucky for you, it's impossible to distinguish between insane people and cooky entrepreneurs who start succesful airlines. In other words, if you still want to start an airline after reading that, you're insane, but that doesn't mean you won't necessarily be succesful. (You probably won't be, though.)

Other than that, airlines aren't really different than any other business. Revenues in, expenses out, assets (and tons of liabilities) on the balance sheet. Demanding customers and stiff competition. A business education and respect for the nature of the marketplace is probably the most valuable thing.

1.) Be a billionaire.
2.) Be a millionaire with billionaire friends that want to invest in your venture.
3.) Turn 21. Hard to stock an aircraft with booze if the CEO can't buy alcohol.
4.) Don't. Just turn around and walk away. Go into business or computers of some sort. Airlines aren't like they used to be. They're commodities and are treated as such.

Best of luck!

1. Get some seed money to get the initial formalities ironed out. In India that means around 10-20 crores [2-3 millions $].
2. First you need to get a Scheduled/Non-Scheduled AOC - Air operators Certificate from the Govt of your country. Without an AOC you cannot lease/buy planes or transact any business.
3. Once the AOC is in hand, you can start recruiting staff, leasing/buying planes for which again you need money. I would say minimum fleet size is around 5 - anything less than that you are going to loose money.
4. Finance for each aircraft is arranged separately - so having a competent Finance wizard with a grasp on financing markets is most important.
5. For the startup funds and for individual aircraft, various creative means are available. Private individuals will come onboard to finance single/multiple aircraft in return for fixed payment every year or a deferred payment model. Things can get complicated - hence having a competent individual to handle your Finance Department is very crucial.
6. Cash Flow from the base 5 aircraft fleet can then keep operations going & after a runin period of a year or so fund expansion as well.

Good luck!

And as usual, starting up something means you should have a great idea about the niche you're starting to address, the business idea on how you'll make money compared to others who aren't making much, and excellent skills in hiring people and making contracts with various other players that you'll need to work with.

You need lots of money, and a willingness to lose it all.

A small operation with some sort of GA aircraft (such as a Cessna 172 or 182 floatplane taxi-service to some sort of popular holiday island without other easy ways of access) is probably the most realistic way.

If you need an EASA CPL(A) licensed pilot to fly your planes, then I am ready

So folks, are you guys saying I shouldn't start one since I'm a middle class American? I want it to be clear.

What everyone is saying is you either need a lot of capital or access to a lot of capital to start anything in aviation. Even a modest air taxi service would be millions. It is an incredibly expensive business will high start up costs.

What ever drugs you are on you need to stop before you proceed any further:)

Sir, I'm not on any drugs. Why am I being accused of that?

And okay, I might back out of the idea. Thanks everyone for your help. Good luck everyone on their professions in the airline industry.

zasmith25 wrote:

Sir, I'm not on any drugs. Why am I being accused of that?

Because for every jetBlue, there are THOUSANDS of airlines that don't even make it to the first flight, and HUNDREDS of airlines that don't last 12 months. It is not a business for the faint of heart.

But ... if you have an idea for an airline. One that has never been thought of before. (Good luck with that, btw). Then you will find investors. But that's the rub ... how does one come up with a plan not yet envisioned?

And ... you have to think like an accountant, not like an aviation enthusiast. So an all DC-7C airline won't cut it. Same think with all First Class at lowest fare bucket fares. etc etc etc

Is there resources I can follow that will guide me through becoming successful? I'm not an aviation ensusiatic. I have an IT background so I am well aware of numbers and thinking.

zasmith25 wrote:

So folks, are you guys saying I shouldn't start one since I'm a middle class American? I want it to be clear.

No, we aren't. It's just very difficult. I suggest you study how airlines have succeeded (and how they have failed). For example, my nearest airport was home to Crossair.

They started on routes where there was little competition, for example these: http://www.gcmap.com/mapui?P=zrh-NUE;+zrh-KLU;+zrh-inn

Crossair was always willing to serve an extreme niche market. At one time, they offered flights from London to Southern France via Switzerland, catering to London-based businesspeople who had their weekend homes there.

It's a very good idea to research a market and think about possible customers. Don't do as the other airlines do - you have to find some routes that do not exist yet!

Good luck to you - it will be a great experience, one way or the other!


David

zasmith25 wrote:

Sir, I'm not on any drugs. Why am I being accused of that?

Obviously you don't have a sense of humor. One might help when you get around airplanes.

zasmith25 wrote:

So folks, are you guys saying I shouldn't start one since I'm a middle class American? I want it to be clear.

Please point out where anyone said or eluded to that statement. Based on the fact that you assume this is true, you're not fit to run a business, especially in the field of aviation. You need to check your entitlement and assumptions at the door when tackling a large enterprise such as running an airline. The fact that you ARE NOT an enthusiast, may hurt your chances of succeeding. If you're not in it for the money (management), you're in it for the environment (field). In my opinion, your maturity level needs to increase before attempting such an endeavor.

Best of luck in the future, wherever that may lead you.

zasmith25 wrote:

So folks, are you guys saying I shouldn't start one since I'm a middle class American? I want it to be clear.

Nobody's saying that. What people are saying, is that you need very good idea of what you want to do with that airline, and that it's going to cost you millions to get it started. Is 'middle class America' a good starting place for that? I don't know, you tell me.

Anyways:
1. Have a unique idea and a solid business plan
2. Have several millions available to start the company up. Unlike what a previous poster wrote, you need to hire at least 4-6 people in the organisation, 4 of which will be nominated post holders, in order to get an AOC. Each of those will expect a salary in the 100K range, and it will take them 6-12 months to obtain the AOC.
3. No AOC without aircraft; you need at least one type on your AOC, and that type must be in the inventory of your airline. In other words, apart from working on the AOC, the people mentioned above will also have to help you find and purchase/lease at least one aircraft of the same type you intend to operate
4. If you want to run an airline with jets or turboprops, you need at least 50M USD to get it off the ground

I have worked twice on a business plan for a new airline. Both times it was with people from the industry (one of them had actually helped founding an airline which is now one of the bigger ones in the world with more than 100 aircraft).

Both ideas were good. Both ideas did not get off the ground. That`s how things go. And that's why we tell you that it is not feasible for you "to just start an airline".

As the saying goes: If you want to become a millionaire, start as a billionaire and found an airline...

We have a saying here.
How to become a milionnaire ?

Be a billionaire and start investing in aviation.....

What type of airline are you talking about?

A small 135 charter company with an airplane or two?
A company to provide scenic flights around an area?
A cargo airline?
A full fledge passenger airline?

First, you need to know what you want to do first. If it a full 121 passenger carrying airline, you need tens of millions of dollars of investors money to even begin to scratch the surface of DOT and FAA approval, leasing aircraft, marketing, employees, etc..

If you want to one day start an airline, you need to work in the business first.

Sorry for the late response, I've been busy with some stuff. But I am back to discuss it further. Based flymia's statement on what my plan is. My plan is to start small, maybe do a charter service of one plane or 2 that holds 60 passengers on each flight, then have a growth plan eventually go for more of an enterprise of more destinations and lean away from the charter flight service. ptharris's statement, I do have a high enthusiastic level, I am full of ideas and I strive to make things better when things don't go exactly right.

zasmith25 wrote:

Sorry for the late response, I've been busy with some stuff. But I am back to discuss it further. Based flymia's statement on what my plan is. My plan is to start small, maybe do a charter service of one plane or 2 that holds 60 passengers on each flight, then have a growth plan eventually go for more of an enterprise of more destinations and lean away from the charter flight service. ptharris's statement, I do have a high enthusiastic level, I am full of ideas and I strive to make things better when things don't go exactly right.

I'm going to be blunt here; you will not make it. The statistics are simply not in your favour. Most people here are telling you not to do it, this is not some conspiracy against you. We're trying to get you to save your time and money (and other people's money, should they choose to back you). Also, A "small charter service" does not typically start out with 2 60 seat airplanes (think a Dash 8 or ATR).

I'm in an aviation management college program right now, and for my final exam for my management class last year, my small team and I had to spend months coming up with an air service business idea. We had to find airplanes, come up with a business model and plan, and get all the proper paperwork sorted out so that once we were done this project, the final thing we could've done would be to send it off to Transport Canada to start our company. My team did a small charter service, we would've had 3 planes (two 4-passenger and one 8-passenger twin prop aircraft). Our initial start-up cost was just under 1 million dollars, and our yearly operating cost was just shy of 2 million dollars. Also to note: we were most likely significantly underestimating the cost the run the business, as all of us in my team (like you) had zero experience in that field.

It's nothing personal, but save yourself the trouble, don't try.

America is founded on people who take risks and have entrepreneurial drive. That said, I've been involved with two airlines from startup, one that had recently started and one more that never got started. As nearly everyone has said, it takes a great deal of startup capital no matter what the size of the operation will be. That actually works against starting small. You simply cannot recover the startup costs if you cannot generate sufficient revenue to cover them plus current operating costs and growth. Revenue must grow fast enough to cover the bills. The operational aspects are more related to compliance with ALL of the applicable regulations which include equipment, facilities, and personnel. The success rate is very low in this industry.

Okay, from all the statements everyone made here, I've officially going to close the idea on it and step down and not go forward. Thanks everyone for your input and I wish everyone luck.

Given the obvious enormous costs associated with starting an airline, you're not going to be able to even think of doing this until you have 8 figures in the bank; 8 figures you'd be more than happy to risk.

So I guess the question is then how do you get that kind of money?

You either have to find someone with that kind of money who believes in your idea or acquire it yourself somehow. You might be better off taking advantage of your IT background first to try and build up a business with a view to getting bought out when it gets successful.

Instead of starting an airline yourself, maybe it's a better idea to buy an existing airline and try to improve it. It's still a big risk, but it saves you a lot of work. Buying an airline means buying an existing AOC with existing aircraft and existing staff. But unless it's a loss-making airline most airlines will not be for sale or priced highly out of league for an average American. Even for a small loss-making airline you still need a lot of money.

Next of course you need an idea how to turn this loss-making airline into a profitable airline. What are the costs and how do you think you can cut them? How do you plan to raise earnings to cover up for the costs? If you want investors to back you up financially you got to have an answer to those questions.

zasmith25 wrote:

Is there resources I can follow that will guide me through becoming successful?

Sorry, there is no blueprint for that. You'll have to figure it out for yourself. Best guess is to study airlines that didn't make it and why they didn't make it and learn from their mistakes. But even that's not a guarantee.

zasmith25 wrote:

Okay, from all the statements everyone made here, I've officially going to close the idea on it and step down and not go forward. Thanks everyone for your input and I wish everyone luck.

Well you came to the right place. Most business start-ups make their biggest initial decisions based on anonymous message board posts.

zasmith25 wrote:

Okay, from all the statements everyone made here, I've officially going to close the idea on it and step down and not go forward. Thanks everyone for your input and I wish everyone luck.

After all, it might be better to start an air taxi service for corporates/governments, using a small business jet, and go from there.

I know a friend who wants to start his own rescue service, complete with an ambulance, EMTs, doctors... he loves rescue work, but he was a bit appalled when I told him to get a sound grasp of corporate finance/business economics first, and then get a sound grasp of all the regulations involved. After all, it's money and paperwork that makes planes fly and the world go round.


David

I think a 20 year old might be able to buy Alitalia.

Flighty wrote:

I think a 20 year old might be able to buy Alitalia.

Depends on how much money that 20 year old can offer. Age doesn't really matter, money does.

My advice having worked for over 20 years in commercial aviation and knowing operating costs of running an airline backwards is as follows:

1) if you have less than $25m that you are willing to wave goodbye to then don't evn think about it
2) if you have more than $25m then invest it in property.

As mentioned before in this post, for every one that is successful, there are hundreds that never get off the ground, and a handful that eventually get airplanes, maybe make a few runs and then run out of cash and go belly up. There are a number of ways that an airline could get started. Most recently I noted the old People's Express tried an idea of basically contracting out all the work to a charter op that had all the certificates and maintenance programs set up, and pretty much lease out the planes on a hour by hour basis. Unfortunately even at that level, you need a lot of cash for marketing, staff and overall operational oversight on your end to make any sort of operation come to life, and be sustained.

To start an airline "from scratch" takes a lot more money, Outside of getting the logistic items such as an office and necessary equipment, you need to hire the right people to write up the maintenance books, operations manuals and other associated requirements that the FAA mandates before getting your FAR 121 Certificate. In my experience through my father, that process could take as much as 2 years. The money that goes into that may never be seen again, or only seen if the airline operates successfully for a long time.

Any delay in the certification is even more money down the drain as you try to meet all the requirements of FAA. And that is if the FAA is actually helpful to you in this process

The personnel in this phase, if they are good, don't come cheap. The people you need to bring in typically are veterans of the airline industry already, having run their own operations, maintenance, pilot and crew ops and other associated areas. They may jump on for a variety of reasons including the fact that one may see themselves currently as a small fish in a big pond, and this will help them in their career by reversing that.

Now the question is "should you try" - the task is formidable, and unless you have a idea in hand - like serving a niche market or try to be an incumbent LCC in a market not served by an LCC - you may be in a position where you will attempt the task only in places where the money is. While it sounds crazy, it can be done with determination and a hell of a lot of believing in your vision.

Good luck!

Seriously, why do you guys even entertain these people with replies?
Unless he is an heir to a fortune he has zero chance of succeeding. The guy couldn't even use proper grammar and you guys are taking time to give him honest feedback? I mean, thats nice of you, but I wouldn't waste a second considering the OP as being legit.

thefactorypilot wrote:

Seriously, why do you guys even entertain these people with replies?
Unless he is an heir to a fortune he has zero chance of succeeding. The guy couldn't even use proper grammar and you guys are taking time to give him honest feedback? I mean, thats nice of you, but I wouldn't waste a second considering the OP as being legit.

Plenty of people (non-A.netters) find their way into these threads through google searches. Might as well make it clear to everyone who might stumble upon this thread in the future.

when you get ready to start your airline, avail your self of the FAA library at Oak City, and get good ideas on how to "craft" your operating certificate, It might take some time but you can get the BEST ideas by looking at Great Ideas and you can Graft good ideas into a great certificate of your OWN. (Had to do this for a college Course, 6 of us wrote a humdinger of an operating certificate) The Maintenance certificate was much harder... (The FAA inspector that reviewed it was downright BRUTAL!!)

zasmith25 wrote:

Is there resources I can follow that will guide me through becoming successful? I'm not an aviation ensusiatic. I have an IT background so I am well aware of numbers and thinking.

The airline industry will kick your @$$. You have an IT background? Start an IT company! Do you code? Do you have access to resources that can code? Do you understand IT infrastructure, and have people you trust to manage IT infrastructure?

If so, that's the business you should start. It worked for me!

No initial capital would be required. You just need trusted relationships with people that are PROVEN to be good.

If you're entrepreneurial-minded: Stick with IT first.

PM me if you'd like more advice. You are obviously not in a position to purchase or lease aircraft, certify pilots, hire FAs, and deal with thousands of pages of compliance whether you go 121 or 135, or whatever. The FAA and NTSB will eat you alive...

BUT if you build a successful IT business: Maybe 10 years down the road: You will have the capital to gamble your neck on the line, if you're still interested in creating an airline.

You must pack a good idea to attract pax.
For Instance: "NO CHILD BELOW 10 yrs. OLD WILL BE ALLOWED"
Your planes will be full with people wanting to travel & rest..

Rgds

Apprentice wrote:

You must pack a good idea to attract pax.
For Instance: "NO CHILD BELOW 10 yrs. OLD WILL BE ALLOWED"
Your planes will be full with people wanting to travel & rest..

Rgds

But parents with children will pick another airline. It is true that you need a good idea, you got to be different from the rest. That can be done in many ways, which way works best for you?

Hello Everyone,

I apologize for my long absences between me being online. I've been busy with college and finding a job at a local retail. Due to my lack of wealth and my lack of experience in the aviation industry. I've decided to [i]NOT[/i] move forward in starting a new airline company.

However, due to the fact that I have a high interest in the aviation industry, I have decided to work for a local retail for a certain amount time to gain intensive customer service experience, then go apply for a job at a major airline as a Customer Service Representative at an airport.

The aviation industry is a huge interest of mines and I am interested in trying to do some sort of work in it.

Thanks

Zach

Apprentice wrote:

You must pack a good idea to attract pax.
For Instance: "NO CHILD BELOW 10 yrs. OLD WILL BE ALLOWED"
Your planes will be full with people wanting to travel & rest..

Rgds

This idea has non-obvious downsides. Sure, you'll get business travelers. They earn miles and status. Now they want to use those miles to take their family on vacation. But they can't since the airline doesn't allow kids...

No problem, Zach. It's really admirable that you've asked people who know more about aviation and aviation business than you do.

Eindhoven wrote:

But parents with children will pick another airline. It is true that you need a good idea, you got to be different from the rest. That can be done in many ways, which way works best for you?

Here, Skywork Airlines from Switzerland comes to mind. They are mostly flying business passengers from BRN to various European cities, and in the summer, they utilize their aircraft for tourist charters to the Mediterranean - business- and family-friendly at once. Then, they have an interlining agreement with KLM, so you can fly to almost any KLM destination from that tiny Swiss airport. It's a nice niche they're working on.


David

if you want to make 10 million dollars, start out with 100 million.

zasmith25 wrote:

Hello,

I'm considering to start an airline. I'm a typical 20 year old middle class American with a dream.

How do I go about starting a successful and profitable airline? What are some resources I can use to learn more? I know StartupBoeing is one resource.

Can someone give me advice on how to do it and where to start? Is there more down to beginners resouces I can use to learn?

Thanks

Zacb

Get a billion dollars.

Start an airline.

You'll be a millionaire in no time!

zasmith25 wrote:

Hello Everyone,

I apologize for my long absences between me being online. I've been busy with college and finding a job at a local retail. Due to my lack of wealth and my lack of experience in the aviation industry. I've decided to [i]NOT[/i] move forward in starting a new airline company.

However, due to the fact that I have a high interest in the aviation industry, I have decided to work for a local retail for a certain amount time to gain intensive customer service experience, then go apply for a job at a major airline as a Customer Service Representative at an airport.

The aviation industry is a huge interest of mines and I am interested in trying to do some sort of work in it.

Thanks

Zach

Zach, considering you are American, just being able to not strike customers (or call the police to do so on your behalf) would make you an above average customer service agent! Go for it!

The trick to starting a successful airline these days is to find a niche market away from low cost competition and exploit it. Eastern Airways in the UK is an excellent case study of this in action.

There is one absolutely guaranteed way of ensuring that LCCs will never compete with you - the sub-5000 ft runway. Stick to airports with short runways and your chances improve exponentially.

Hello zasmith25,

I am currently doing this, of course, it is a very small regional airline. If you are still interested in doing this, at least getting some in depth information we can talk about some of your ideas and I will try to be of some help (at least where the small regional airline is concerned). It is true that you need a large budget upfront, and that there is no blueprint as every situation is different but it is possible.

C.

zasmith25 wrote:

Hello,

I'm considering to start an airline. I'm a typical 20 year old middle class American with a dream.

How do I go about starting a successful and profitable airline? What are some resources I can use to learn more? I know StartupBoeing is one resource.

Can someone give me advice on how to do it and where to start? Is there more down to beginners resouces I can use to learn?

Thanks

Zacb

Listen man, if you have a dream, don't let others stand in your way. It's a big venture that requires a lot of capital, but if you have access to that then don't discount it completely based on what others have said. Yes, many have failed, but that doesn't mean you will as well.

Provided you are wealthy enough to do so, you will need to find a niche in the market that will show consumers that your airline is superior to others. I've always wondered what would happen if a small regional airline were to abandon the paradigm of high seats/low cost and adopt a new, more PAX friendly approach at a higher cost. If you can provide good legroom, plenty of amenities, and popular destinations, there are likely people who will pay for that, as long as the cost isn't too outrageous. Not that I'm suggesting this, as it sounds like more of a pipe dream that anything else, but you get my point. Have an attraction no one else has.

Low budget carriers in the EU, like Ryanair, have been largely successful by purchasing brand new aircraft and giving decent legroom, but have all amenities and food be for purchase at a high cost, as well as flying into regional airports and not major hubs, which are significantly more expensive to operate out of.

Either way, best of luck to you. We need more competition in air travel.

Hello zasmith25,

It's true that many have failed but you don't necessarily have to be one them. In my opinion, don't listen to what people say. I mean don't loose your dream just because someone says you are foolish. If you're still interested I can say there are lot of opportunities awaiting but you have to find the right one. I'm saying this because I too have a similar concept but approaching it in different way. Who knows what the future holds. If you are still interested we can talk.
Amad

BawliBooch wrote:

1. Get some seed money to get the initial formalities ironed out. In India that means around 10-20 crores [2-3 millions $].
2. First you need to get a Scheduled/Non-Scheduled AOC - Air operators Certificate from the Govt of your country. Without an AOC you cannot lease/buy planes or transact any business.
3. Once the AOC is in hand, you can start recruiting staff, leasing/buying planes for which again you need money. I would say minimum fleet size is around 5 - anything less than that you are going to loose money.
4. Finance for each aircraft is arranged separately - so having a competent Finance wizard with a grasp on financing markets is most important.
5. For the startup funds and for individual aircraft, various creative means are available. Private individuals will come onboard to finance single/multiple aircraft in return for fixed payment every year or a deferred payment model. Things can get complicated - hence having a competent individual to handle your Finance Department is very crucial.
6. Cash Flow from the base 5 aircraft fleet can then keep operations going & after a runin period of a year or so fund expansion as well.

You don't need an AOC or any aircraft to start & you don't need much or any money. You can start with a virtual airline. You do need a point of difference, eg. find a route that no one flies or no one flies nonstop or at good times. Then find an airline with lots of spare capacity & see if you can make a good fit.

Many smaller airlines are run by very good pilots, who aren't necessarily very good business or marketing people. Many resorts have been isolated by the low cost revolution. Find one who needs air service & see if you can provide. I know of one example in Australia. PM me & will explain.