Setting up Airline With a difference and low Set up costs help needed

[Gorminator]

Hi All

I need help and thoughts. So i have come up with setting up a airline with low set up costs and in a recession. Must be Mad Hey

However what if i could set it up to sell Charter Flights and basically be the middle man. What would my main costs be.

So for example. I would lease a 240 seat plane from a charter company. I will sell seats on a flight in July to Tenerife from London return. A customer would buy a seat online on condition the flight would be full otherwise a refund would be Presented.

A full plane would mean i would be able to offer lower costs than a normal airline during peak. The style of the Site would be similiar to Group on. 240 seats left at £59 etc.

Let me know your thoughts.Looking for a partner on this as well.

 

[Mr Willson]

Hi All

I need help and thoughts. So i have come up with setting up a airline with low set up costs and in a recession. Must be Mad Hey

However what if i could set it up to sell Charter Flights and basically be the middle man. What would my main costs be.

So for example. I would lease a 240 seat plane from a charter company. I will sell seats on a flight in July to Tenerife from London return. A customer would buy a seat online on condition the flight would be full otherwise a refund would be Presented.

A full plane would mean i would be able to offer lower costs than a normal airline during peak. The style of the Site would be similiar to Group on. 240 seats left at £59 etc.

Let me know your thoughts.Looking for a partner on this as well.

Hello the amount of cash you would need and also Lord Sugar was saying on a Q&A you dont get out of bed and think I am going to start a airline you need experience to build your venture.

 

[Gorminator]

its a good point but all i need is a atol license a website that can take payment. then everything else is leased out an provided on my behalf. Am i thinking about this in a wrong way

 

[Stryderunknown]

Hello the amount of cash you would need and also Lord Sugar was saying on a Q&A you dont get out of bed and think I am going to start a airline you need experience to build your venture.

Stelios Haji-Ioannou, of EasyJet fame had a few project failures because of the absense of experience in those particular fields. He relied heavily on hiring people with experience to operate the particular field I refer to and that was his downfall, as they costed more than the revenue from the projects.

 

[Gorminator]

Thanks for the Response. I really think there is a opportunity here. For example. £290 return chepest flight in July to tenerife. if i did it for 230 inc taxes .

The quotes i got from charters including fees for 300 people was 190 per person return. Defo margins

 

[vvaannmmaann]

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=190220&highlight=start+an+airline&page=2

 

[JamesHall174]

I have no understanding of this market at all but how are you going to control all the check in, baggage etc etc etc...... or does that all come within the charter price?

If not, then the margins will just never stack up. I suspect if this model worked an awful lot more people would be doing it.

 

[Deleted member 61074]

You do sound a bit nieve to be contemplating such a big venture. The biggest flaw for me is your reliance to fill the plane. You propose to fly people to their holiday but seem to indicate if the plane isn't full you would refund! How much time would there be between the cancellation of the flight and takeoff? Can't see many people taking up your offer as they would be left with either to flight or the option of an expensive last minute ticket.

 

You do sound a bit nieve to be contemplating such a big venture. The biggest flaw for me is your reliance to fill the plane. You propose to fly people to their holiday but seem to indicate if the plane isn't full you would refund! How much time would there be between the cancellation of the flight and takeoff? Can't see many people taking up your offer as they would be left with either to flight or the option of an expensive last minute ticket.

OP I don't think I would ever book the service personally - if I book a flight I want it go because I want to get there - I'd rather pay the extra and be guaranteed (as far as possible) that the flight would take place. I wouldn't want to be reliant on 239 other people paying up before I'd know the flight was going, and the time issues mentioned by dunerider make it even less certain.

If you cancel my flight and refund my money presumably you are disclaiming any responsibility to put me up in an hotel or to find me another flight? The costs of sorting out the mess caused by you cancelling that flight could easily exceed any saving on the ticket.

The idea just wouldn't work for me and I wonder what market there is selling plane tickets to people who don't mind their flights being cancelled completely once they gone to the effort of packing, making arrangement and getting to the airport.

 

I'm not sure you've thought this through..

Pre start up, your costs would be:

- Build a website
- Market your website
- Charter a plane (for which I'm guessing a significant deposit would be required.
- Get insurance
- Secure landing spots / routes.
- pay a bond to Aita/Abta or similar.

Thats without thinking too much about it..

You could de-risk it by using other people's capaity, but then you are effectively a travel agent, so really need to think what your USP will be..

 

[Scott-Copywriter]

This is one of the worst ideas I've heard on this forum since I started posting here.

 

[I Love Spreadsheets]

Wasnt there a teenager who did this a couple of years ago. He was all over the press because he was winning loads of young peoples business awards. From memory he was doing it from a spare room. No idea how much money he or his family put in to it, but it does seem possible.

Some real expenses may arise from the insurance and AITA/ABTA parts.

Does the cost of the charter flight include fuel and use of the airport facilities?

What happens if the price of fuel continues to climb and the cost of the flight goes up as a result?

 

[seasider]

I can't see someone without any history being able to charter a plane without paying the full amount upfront, especially during the busiest time of year.

 

[Tom McClelland]

Who is going to allow you to charter a plane in high season, and then let you pull out of the deal without penalty if you don't sell enough tickets to fill it?

Let us know which company it is, so I can sell their shares if I own any.

 

[thetime22]

I love how ambitious this is. I mean cmon who even thinks about setting up an airline! love it!

 

[I Love Spreadsheets]

Take a look at this

http://news.bbc.co.uk/1/hi/business/4694203.stm

This is the teenager who started his own airline in 2005 as a result of a school project and still seems to be going strong.

 

[Tom McClelland]

Take a look at this

http://news.bbc.co.uk/1/hi/business/4694203.stm

This is the teenager who started his own airline in 2005 as a result of a school project and still seems to be going strong.

I'm fairly sure that the whole thing about the teenager who was running flights from Oxford to Cambridge (this appears to be the same person) turned out to be wishful thinking nonsense of the type that regional BBC news programs seem to be incredibly easily duped by.

EDIT: I beg your pardon, this isn't the same person who set up the Oxford-Cambridge service.

But it doesn't seem easy to find anything on the internet about Reilly's airline ever actually making it into the air, and carrying passengers. In fact it is pretty clear that the whole thing ended up going nowhere.

 

[I Love Spreadsheets]

The link to his website from the BBC report brings up a fully working (if boring) website, so he "appears" to be still going (but that is not a lot of evidence to go on)

 

[Tom McClelland]

The link to his website from the BBC report brings up a fully working (if boring) website, so he "appears" to be still going (but that is not a lot of evidence to go on)

Actually it links to a website that once you read past the title makes it pretty clear that the idea never left the runway. I've just realised that it is just being used as a portal to a flight-finder. That's all.

 

[Scott-Copywriter]

Take a look at this

http://news.bbc.co.uk/1/hi/business/4694203.stm

This is the teenager who started his own airline in 2005 as a result of a school project and still seems to be going strong.

http://www.nexusairways.com/

Nexus Airways was touted to be the next low cost airline flying passengers to Tenerife, Gran Canaria, Lanzarote and Fuerteventura. This should have gave passengers a doorway to cheaper holidays, but on the tails of the recession it proved harder than expected to get off the ground.

Looks like that did well.

As if the idea wasn't already ridiculous enough, it's further compounded by the following:

So for example. I would lease a 240 seat plane from a charter company. I will sell seats on a flight in July to Tenerife from London return. A customer would buy a seat online on condition the flight would be full otherwise a refund would be Presented.

Hopefully I don't have to explain why that is beyond awful from a business perspective.

 

[NuBlue]

As has already been said, I would never book a flight for a holiday or business if there was a chance it would not take off. I dont care if the seats were a fiver!

That whole Groupon style of buying just seems stresful to me!

 

[vvaannmmaann]

Read this.
http://www.boeing.com/commercial/startup/index.html

 

[I Love Spreadsheets]

I think your right that company didn't seem to get far, however I dont think chartering a plane is beyond impossible if you get the money side sorted out first.

I also have to agree that the clause about the plane having to be full is a bad one. I certainly wouldn't book a ticket on that basis.

 

[IE152]

Hi,

Apologies, but this won't work.

First of all, I have spent the last twenty years in and around the airline industry, and am currently looking to set up a (non airline) business, and only found the forum today. Apologies again that my first post is going to be negative, but hopefully it will save the OP money and time.

The good news is that there are plenty of charter companies who will be happy to lease you the plane. And they will take care of all of the check in procedures and everything else for you, so you will only have to worry about is selling the tickets.

However, this is where the bad news starts. While there are plenty of charter companies out there, there are not as many as there had used to be. Typically the majority of aircraft available in this market are A320-737 sized, so you will be looking at an aircraft with somewhere between 150-180 seats.

You will however have to get your ABTA/ATOL bonding yourself, which will be expensive for someone without any experience.

The summer period in Europe is when the airlines are busiest, so you really do need to get your plane chartered asap. You will find that, especially with no track record, you will have to pay up front - no airline worth its salt will have an aircraft sitting around looking for business over the summer period.

Do you know what airport you are looking to fly from? If you are aiming to fly from the major airports - Gatwick, Manchester, Luton/Stansted, Birmingham, Glasgow etc - you will find that the market is incredibly competitive, and you will be competing against vertically integrated multi national tour operators who have cut costs to the minimum and can afford to sell the plane ticket exceptionally cheaply.

You may find a bigger margin if you fly from a smaller airport. However, in such a situation you may find that you would have to pay to fly the aircraft into and out of the airport before and after your flight, and that will be very expensive indeed.

The final problem that you have is the way that passenger demands have changed. The low cost airlines have totally changed the airline business by giving the customer the opportunity to book flights when they want easily and critically cheaply. I have had a quick look on both the Ryanair and Easyjet websites and easily found return tickets to the Spanish Med coast for less than £100 return in July. Can you really undercut that by a sufficient amount that it is worth my while running the risk of booking with you when I don't have such as extensive choice of flights (Easyjet, for example, are offering me a choice of ten daily flights from London to Palma this summer, from three different airports) and I can be confident that the flights will operate?

I'm sorry to be so negative, but this really isn't viable.

Neil

 

[tdmoggy]

Never mind the people who have only seen the negatives. This is a great idea that will work.

certainly, I tend to travel for business with some flexibility around dates. If there was a Groupon type service where price is competitive and i get a refund at a cutoff date should the airline not be full, I will happily participate as long as i leave room to buy another ticket (should the flight not proceed). My issue will therefore be that the refund cut off time must be at least 2 weeks ahead of my actual planned travel date as this will leave room for me to buy another airline ticket.

I think you can make this work with the right service partners and charter company. Don't listen to the naysayers.

tdm