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Starting up a charter company
- Thread starter AeroDMB
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sydeseet
Huge Member
- Joined
- Nov 26, 2001
- Posts
- 575
The only easy way is to start with a large fortune, just like the old saying. You need years of time, lots of money, some FAA saavy, and a lot of patience. Not to mention, depending on the type of charter you intend to do, the market may be saturated depending on where you live. There is only so much need for this type of service, as many operators have learned the hard way. I'd rather start a new career as a brain surgeon, it's be less stressful.
George Zip
Well-known member
- Joined
- Nov 28, 2001
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- 51
Unfortunately it is a really hard business to try to get into. I started an ran a 135 service for about 7 years. It was a great adventure, and we did moderately well. But if I thought the risk / reward / effort / payoff ratios were anywhere near livable I would still be in it. It was a lot of fun.
The biggest question that anybody thinking about getting into this kind of business should ask is : "Is there a sufficient demand at an economically real price level to really do this here?" Guess what - nobody ever EVER asks that question. They get into the business because they want to for personal reasons - not business reasons (which also means that's who you have to compete against).
When it does work, it's not usually a straight charter business. Someone owns corporate or personal airplanes, and sets up a management company to sell off unused time, etc...
Good luck in whatever you decide.
The biggest question that anybody thinking about getting into this kind of business should ask is : "Is there a sufficient demand at an economically real price level to really do this here?" Guess what - nobody ever EVER asks that question. They get into the business because they want to for personal reasons - not business reasons (which also means that's who you have to compete against).
When it does work, it's not usually a straight charter business. Someone owns corporate or personal airplanes, and sets up a management company to sell off unused time, etc...
Good luck in whatever you decide.
good idea...
A charter company I'm thinking about starting involves my own idea which is different than the typical 135 charter business. The a/c (s) I would own/operate would give me an advantage over the rest of the competition. Would it still be difficult?
THanks for all the suggestions!
A charter company I'm thinking about starting involves my own idea which is different than the typical 135 charter business. The a/c (s) I would own/operate would give me an advantage over the rest of the competition. Would it still be difficult?
THanks for all the suggestions!
Dan CFI/CFII
I'm a dippidy doer
- Joined
- Nov 28, 2001
- Posts
- 347
Aero, if your time listed on your profile is correct, I think you're just dreaming bud.
If you are carrying paying passengers, you've gotta be 135, and most charter stuff should be IFR, unless you live in a part of the country where it's always sunny. 135.243 pretty handily puts that out of your grasp for the near future unless you've got that large fortune to start with.
You know what they say: "the only way to make a small fortune in aviation is to start with a large one."
Good luck to you, a saturated market will become a LOT of business if you provide a better product. Of course, convincing a financier of such could be tough...
Dan
If you are carrying paying passengers, you've gotta be 135, and most charter stuff should be IFR, unless you live in a part of the country where it's always sunny. 135.243 pretty handily puts that out of your grasp for the near future unless you've got that large fortune to start with.
You know what they say: "the only way to make a small fortune in aviation is to start with a large one."
Good luck to you, a saturated market will become a LOT of business if you provide a better product. Of course, convincing a financier of such could be tough...
Dan
You got the first part right
You have passed the first test, your a dreamer. I started a Part 135 operation years ago with $500.00 and a leased C-206. It grew to a $750,000 per year business with 12 aircraft. Unless you have bucks to get you into the turbine charter which you almost have to do now days in order to be able the generate the cash flow needed to comply with all the bs.I had contracts with Emery Air Freight, CF Air Freight, and flew for Ford, GM, and all the other automotive companies. We did contract work in Alaska and flew all over the Lower 48 and Central and South America. You must be reliable and have an ability to adapt quickly to the market place. You have to find your nitch and work it hard. The biggest problem is finding people that are willing to work with you and stick it out. Usually about the time you get someone trained in they are off to the next person that will aways have better benifits and pay more. The key is being able to do it all, fly, maintenance, dispath, and the bookeeping, quess who gets to fill in whenever someone gives their two week notice(you will find that a sick policy)and just leave-some people don't even give you the courtesy of that. It takes 2 months just to hire and train a new pilot, guess who gets to do double duty in the mean time. I burned out and quit after 10 years, I cashed everything in for $150,000 the sad thing is if I still had all those airplanes I would have my first million plus. That is the way the ball bounces, I worked so hard my twenties are just a blurr. Now I fly a normal life with normal schedule and find it a breeze. Life is good.
You have passed the first test, your a dreamer. I started a Part 135 operation years ago with $500.00 and a leased C-206. It grew to a $750,000 per year business with 12 aircraft. Unless you have bucks to get you into the turbine charter which you almost have to do now days in order to be able the generate the cash flow needed to comply with all the bs.I had contracts with Emery Air Freight, CF Air Freight, and flew for Ford, GM, and all the other automotive companies. We did contract work in Alaska and flew all over the Lower 48 and Central and South America. You must be reliable and have an ability to adapt quickly to the market place. You have to find your nitch and work it hard. The biggest problem is finding people that are willing to work with you and stick it out. Usually about the time you get someone trained in they are off to the next person that will aways have better benifits and pay more. The key is being able to do it all, fly, maintenance, dispath, and the bookeeping, quess who gets to fill in whenever someone gives their two week notice(you will find that a sick policy)and just leave-some people don't even give you the courtesy of that. It takes 2 months just to hire and train a new pilot, guess who gets to do double duty in the mean time. I burned out and quit after 10 years, I cashed everything in for $150,000 the sad thing is if I still had all those airplanes I would have my first million plus. That is the way the ball bounces, I worked so hard my twenties are just a blurr. Now I fly a normal life with normal schedule and find it a breeze. Life is good.
aero99
just a member, not senior
- Joined
- Nov 26, 2001
- Posts
- 394
I would completely disagree with Dan. Being on owner/ operatior of a 135 outfit doesn't require the owner to be able to fly. It would make the startup much easier for a more experienced pilot that has flown for 135. If you have the background in business, start up capital, and maybe a partner or two with flight experience to help you get in the air anything is possible.
Ever successful business owner I know started out with a dream and 10 people in line telling them it couldn't be done blah blah...
If you have a dream and an idea and a way to get it off the ground then go for it. If you are like me you would rather try something and fail than not try at all.
Ever successful business owner I know started out with a dream and 10 people in line telling them it couldn't be done blah blah...
If you have a dream and an idea and a way to get it off the ground then go for it. If you are like me you would rather try something and fail than not try at all.
George Zip
Well-known member
- Joined
- Nov 28, 2001
- Posts
- 51
Aero99, you're certainly right that everyone who has succeeded had to listen to many people tell them "it'll never work". I would certainly encourage this guy not to succumb for that reason.
It is, however, and entirely different thing to have people saying "I have been there - and it sucks!". A regular conversation of the individual owner / operator Part135 outfits I knew was just how few charter services were honest-to-God profitable stand-alone business. So many dreamy eyed pilots wanted to be in the business, and all were willing to offer the services at breakneck prices, that noone could make a buck. It seems to be a permanent fact of life in that industry.
As was pointed out you'll work your guts out for a month in a Baron or Navajo to carve out the profit you'll make in one Learjet run across the country (which will make you tons of money all month til it sits for 28 days waiting for some hideously expensive part that's not available, then you're broke). There could be a whole new conversation on just capital alone.
This guy mentions something about a special angle - it's not as if there are no profitable Part 135 operators out there. Plenty have the right situation, but I bet it is a tiny fraction of the ones out there. Maybe he's got something unique that other operators don't.
Also Aero99 - you're right, being a pilot or not isn't much of an issue as to wether or not you can run a charter operation. I started mine with about 700 hours, and didn't make IFR PIC until my first year in business. In fact, the problem is that too many of the people that start up these outfits are pilots rather than business people. Heck - in some ways I was able to think farther outside the box and make some really cool innovations to our market because I didn't know that "that's not how it's done".
In retrospect, it would have been nice to have had more experience in both business and 135 flying. The learning curve would not have been nearly so costly.
Sure did have a lot of fun though...Whatever you do, find, beg, borrow, or kidnap someone with a lot of experience in a successful operation to help guide you.
Good Luck.
It is, however, and entirely different thing to have people saying "I have been there - and it sucks!". A regular conversation of the individual owner / operator Part135 outfits I knew was just how few charter services were honest-to-God profitable stand-alone business. So many dreamy eyed pilots wanted to be in the business, and all were willing to offer the services at breakneck prices, that noone could make a buck. It seems to be a permanent fact of life in that industry.
As was pointed out you'll work your guts out for a month in a Baron or Navajo to carve out the profit you'll make in one Learjet run across the country (which will make you tons of money all month til it sits for 28 days waiting for some hideously expensive part that's not available, then you're broke). There could be a whole new conversation on just capital alone.
This guy mentions something about a special angle - it's not as if there are no profitable Part 135 operators out there. Plenty have the right situation, but I bet it is a tiny fraction of the ones out there. Maybe he's got something unique that other operators don't.
Also Aero99 - you're right, being a pilot or not isn't much of an issue as to wether or not you can run a charter operation. I started mine with about 700 hours, and didn't make IFR PIC until my first year in business. In fact, the problem is that too many of the people that start up these outfits are pilots rather than business people. Heck - in some ways I was able to think farther outside the box and make some really cool innovations to our market because I didn't know that "that's not how it's done".
In retrospect, it would have been nice to have had more experience in both business and 135 flying. The learning curve would not have been nearly so costly.
Sure did have a lot of fun though...Whatever you do, find, beg, borrow, or kidnap someone with a lot of experience in a successful operation to help guide you.
Good Luck.
aero99
just a member, not senior
- Joined
- Nov 26, 2001
- Posts
- 394
As a side note, using aircraft to make money in any realm IS a risky business and one should proceed the highest level of caution. Look at Legend. They had TONS of venture capital and experience and the competition squashed them by bigger pull through their experience and scarying the venture guys out of their wits until they backed out.
But one could look at stocks as just as risky. Look at Eron's (energy company in dallas) stock today- .61 a share, last year it was 90.00 per share. ouch!
ANY business has its associated risks. If one feels he can get in a market location that isn't being attended to very vigoriously with a new product (even in a charter op) one could make a good living at it. The real danger is that if you do make it then your competition will take notice and move in for a piece or your pie.
My advice in starting a venture like this is to move slowly and leave yourself a back door. Buy one plane, not 5. Get to where it is book solid and then buy another...etc etc. If it takes you 5 years to get to the point of buying your 5th plane it make might make more sense to sell one or all and call it a day.
Good luck in your venture.
But one could look at stocks as just as risky. Look at Eron's (energy company in dallas) stock today- .61 a share, last year it was 90.00 per share. ouch!
ANY business has its associated risks. If one feels he can get in a market location that isn't being attended to very vigoriously with a new product (even in a charter op) one could make a good living at it. The real danger is that if you do make it then your competition will take notice and move in for a piece or your pie.
My advice in starting a venture like this is to move slowly and leave yourself a back door. Buy one plane, not 5. Get to where it is book solid and then buy another...etc etc. If it takes you 5 years to get to the point of buying your 5th plane it make might make more sense to sell one or all and call it a day.
Good luck in your venture.
g159av8tor
Chicago Style
- Joined
- Nov 28, 2001
- Posts
- 331
This link may be helpful - http://www.faa.gov/fsdo/orl/files/acc135/135cert.doc
The other posters have already said pretty much anything I would have said – I can tell you from personal experience that the Part 135 paper chase and approval processes can be tedious at best, and more often a nightmare - unless you apply as a single pilot operation – but even then it’s still pretty messy. Since you don’t have the time for 135 PIC VFR, I’m not sure you can even do that. As some of the others posted, you really need to study the market – being a dreamer is one thing – but when it’s your own money, you need to be a realist as well.
Anyway, I have no idea what you’re planning that will be so different – but good luck whatever it is!
The other posters have already said pretty much anything I would have said – I can tell you from personal experience that the Part 135 paper chase and approval processes can be tedious at best, and more often a nightmare - unless you apply as a single pilot operation – but even then it’s still pretty messy. Since you don’t have the time for 135 PIC VFR, I’m not sure you can even do that. As some of the others posted, you really need to study the market – being a dreamer is one thing – but when it’s your own money, you need to be a realist as well.
Anyway, I have no idea what you’re planning that will be so different – but good luck whatever it is!
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