Starting up a charter company

[AeroDMB]

What is the process like starting up a charter company, i.e. getting an FAA Operating certificate and all the other stuff involved with it?

Thanks!

 

[UPS Capt]

I'd suggest getting in touch with the local FAA office and asking them. IMHO, it's a good way to lose a lot of money!

 

[sydeseet]

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.

 

[cmrflyer]

I agree, you can kiss that money good bye. If you really what to start one(God knows why) you would be best offf contacting your local FAA office.

 

[George Zip]

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.

 

[AeroDMB]

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!

 

[Dan CFI/CFII]

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

 

[TurboS7]

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.

 

[aero99]

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.

 

[George Zip]

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.

 

[aero99]

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.

 

[g159av8tor]

Good luck on you endeavor!!!

 

[Jetpup]

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!

 

[hawkerjet]

You'll never know unless you try.

 

[TurboS7]

Now is a good time to do it. If you want to fly you'll have to make your own job. Time will fly and you will be busy-you won't have any time to visit this website though.

 

[Huck]

I have seen folks use leased aircraft for their charter business. They find under-utilized corporate planes and get lease-by-the-hour contracts. Sometimes you can work a management deal too - you fly their folks under Part 91, and your customers under 135. And if you don't fly at all, you don't pay. If you get a deal like that on 4 or 5 aircraft, you shouldn't have any problems finding one available on any given day.

And be honest, be legal, be friendly -you'll stand out a mile in aviation!

 

[CitationCapt]

Certification process and some ideas

The FAA has the entire Part 135 certification process posted on their website. If you forget this link, go to the Atlanta FSDO site.

Here is the link: http://www.faa.gov/fsdo/atl/cer_index.htm



"The complexity of the process depends primarily on the complexity of your proposed operation, and ranges from a simple single pilot operation using a single engine airplane or helicopter under VFR to a complex charter operation employing many pilots and operating numerous turbine powered aircraft. Scheduled

Commuter operations or those involving aircraft of more than nineteen passenger seats are considered beyond the scope of this guide.

The FAA classifies operators into 4 classes, depending on this
complexity. These classes are:

1. Single Pilot Operator. An operator using only one pilot. This
is typically an owner-pilot operation using a single engine
airplane or helicopter under VFR. It could also include a single
pilot operation using a light twin under IFR with an approved
autopilot in place of a second pilot.

2. Single Pilot-in-Command Operator. An operator that uses only a
single crew for an aircraft requiring two pilots. Only one pilot
may be pilot in command. Any other pilots, up to a maximum of
three, must be only second-in-command.

3. Basic Operator. A Basic Operator is one that has a fairly
simple operation without multiple bases of operation or other
complicating factors and employs five pilots or less, and
operates five aircraft or less.

4. Standard Operator. Any operator that employs more than five
pilots or conducts operations of a complex nature involving more
than one aircraft base or pilot domicile. "


Here's a few thoughts/ ideas to ponder:

1) Research any upcoming US Forest Service summer fire patrol contracts by region. This may be done through the internet. A typical aircraft might be a 182 or a Commander 500B- something with high wings. During fire season you'll fly your butt off and never be home. This part 135 operation typically falls under the above classification #1- Single Pilot Operator.

2) Feeder cargo opportunities- you may need to know management real well at a local hub operation (UPS, Airborne mainly). Get to know these folks. It can be a hard sell if you don't have some history in the field.

Also, research the federal reserve bank (Atlanta?) site on the internet. There are contacts for securing cancelled bank check contracts. Another idea- check with local film processors to see who processes film at various cities. Then contact those film processors to see what it takes to haul their film. Finally, some large corporations need internal mail transfer to/from various operations. Find out who does it now, or who may need the service and make them an offer.



Good luck. Do you have alot of money or know how to write a good business plan?

Time to learn.