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How do I start an airline company?
In 2002, I wanted to get two Boeing 767–300ERs (which later became B777–200s) and fly between the States and Europe (livery pictured below). September 11, 2001, turned things upside down and put these plans on hold indefinitely. This model was for two long-range aircraft going between four cities internationally. Starting a US domestic airline would change the model somewhat, the fleet requirements would be for smaller airplanes, but the corp structure/financials would be the same.This is the first time I have ever published or told this story outside of my team. You ready? Here we go!Olympic Airways was no longer going to fly their US/Canada-Greece routes, and I thought it would leave a vacuum in the market (which it did), more specifically the following routes: ORD-ATH-ORD, IAD-ATH-IAD, JFK-ATH-JFK (between Athens and Chicago, Washington DC and New York JFK). In 1999, it was just an idea, which was soon to change…In the spring of 2000, while taxing to the gate at LAX, I saw the blue livery of the A340 Air Tahiti Nui from my window seat. I did some research on the airline, and found out, in 1998, Air Tahiti Nui, or “TN”, started long-haul services flying from Papeete (capital of French Polynesia) to Los Angeles and Tokyo with two A340s.Their business model was similar to what I wanted to do over the Atlantic, the only difference being TN flew over the Pacific. Mr. Nelson Levy, the founder of Air Tahiti Nui, was an incredible, charismatic, gentleman in his 40s. You would never notice his 5′7″ height because his personality was larger than life. He was able to get funding from the French Polynesian government for his airline and ended up taking a large chunk of the shares. He still kept minority share and the CEO title.E-mail exchanges between the two of us led to telephone conversations. Mr. Levy, pictured with me in 2000 (above) at TN’s headquarters, with the Air Tahiti Nui livery in the background and me holding the Aellas livery blueprint.Mr. Levy gave me the gift of full access to his entire organization in Papeete. He provided me with an empty cubicle at TN’s headquarters, at no charge, and allowed me to meet with the various divisions, sort of an incubation set-up. It was truly incredible. In the span of about eight months, I was able to go back and forth to Papeete (I only had to pay the taxes for the business class seat) and put together my business plan, and most importantly, work on the numbers.The market analysis showed routes to/from Athens to/from various cities in the United States and Canada to be hugely underserved for business travelers, tourists and “VFRs” or Visiting Friends and Relatives. (The study also showed Athens-Sydney/Melbourne/Johannesburg underserved as well.)Boeing’s North American sales office liked the concept. I started working with Boeing to secure two 767–300ERs financed by GE Capital (TN assisted in the process) and other funding sources. As the project started to materialize, it changed to two 777–200s.For the sake of space and time, there are big chunks missing. I am going to stay away from anything to do with the financials side, some marketing aspects and other things, like scheduling, I don’t think would be relevant to share. Also, Boeing has a website called StartupBoeing - Boeing: StartupBoeingHere is the cover page business plan for Aellas, this was the first livery rendition drawn according to specification (below). It took me a good two years to put this plan together, taking all the information collected from meetings with Air Tahiti Nui, Boeing, various airport authorities and other sources. Note the Table of Contents - about 100 pages for a macro-level snapshot for a start-up airline. The numbers were the most important part and a lot of work went into making sure everything was identified and realistic.A new US airline has to obtain an FAA 121 Flight Certificate (each country has their own counterpart to the FAA), the time frame being twelve to fourteen months. The Chief Pilot has to be a part of this process. Also, we had to get approval from the Greek Aviation Authority to obtain right to fly into and out of Athens.Other things on the list:Jeppesen supplies the software for proper flight planning. They also supply weather en route among other things.ATPCO - anything that has to do with fares, fare displays, confirmation numbers, all goes through Airline Tariff Publishing Company. They in turn, “push” it to SABRE for it to be published. Every travel agency company/travel website has a “PSUEDO Code” (pronouced pu-say-dough). So when you look for fares online, the airline had to file them and “push” it through. Also the airlines publish “Private Fare Filings” for specific consolidators, travel agents, websites, etc. This is why you may find different fares on multiple websites.Sabre for revenue, global evaluation capabilities, market share info, comparing fares.“Open Sky”/Gaitan responsible for baggage and boarding passes, this was going to be outsourced to Swissport.IATA Registration, Set-up of Codeshare/Interline Network, Set-up of Ground Operations, Completion of Department of Transportation Criteria, Landing Rights at ORD, IAD and ATH as well as securing gate availability.Below you will see the Organizational Chart for Aellas, which would be similar to any start-up airline. The Chief Pilot would manage a total of 16 pilots and co-pilots, 45 flight attendants would be under the Chief Purser, and all the Station Managers would report to the COO. This for two Boeing 777–200s serving four cities, three in the United States and one in Athens, Greece.A 767–300ER Route Analysis Summary from Boeing, below (note the various routes). There is one for the 777–200 as well, but not pictured. Many parts of the business plan has been purposely omitted.Some key points and facts:Air Tahiti Nui livery is a flower dropped in the water.Air Tahiti Nui executives told me when their newly purchased A340 landed at the Papeete airport for the delivery, they got emotional and teary-eyed.Upon boarding a Papeete-Los Angeles flight, the pilot came to my seat, and asked me to follow him to the cockpit. One of the most incredible memories of my life - flying jump seat on the A340 for take-off.I met with the various airport management offices of the three airports. This is where I was able to get airport rates (like the document below) and discuss the process of securing a slot.Olympic Airways was tentatively going to give Aellas their JFK slots in exchange for a codeshare. At that time, Olympic was very interested to work together.I discussed with the CEO of Ethiopian to codeshare the US-Athens-Addis Ababa route. The Aellas flight would connect to a Athens-Addis flight 2–3xs a week.The engines are better off without paint and/or logo. This is because if the outer shell needs to be replaced (or an engine) it can be taken off another plane without having to worry about matching the color or logo. The same goes for the nose.Swissport was to be the handling agent on behalf of Aellas at all airports. The Airport Manager at the various airports would serve as liaison between Aellas and Swissport. Swissport provides passenger handling, weight and balance of aircraft, ramp/cleaning, aircraft maintenance, deicing and counter space. Also cargo handling, departure lounges for VIPs and biz class passengersRoyal Olympic Cruises (ROC) committed to 40,000 to 50,000 seats during the May through August, 2003–2005, for their cruise ships. ROC wanted a separate check-in counter at airport as well as their logo on the headrests for a number of seats. Shortly after 9/11, ROC ran into financial problems and was folded into the Louis Group.Wanted to take advantage of the 2004 Olympic Games in Athens.I met with the then CEO of United Airlines who put me in touch with the codeshare office. I have to dig up the correspondence between United and Aellas for names, but at that time they were, “…happy with the Lufthansa relationship” but were interested in an interline agreement, which is one step before a codeshare.I met with founders of Aegean Air to see if there were any opportunities to work together. Aegean was just beginning to offer a handful of international destinations. They were not too happy with the plans for Aellas.Most in-flight magazines are out-sourced to publication houses like Conde-Nast.Cost of catering for business class per seat is less than $20.Business class kits are some times given by the brand being marketed, otherwise are very inexpensive to produce, about $2-$5.Studies showed a handful of other cities between US to/from Southern Europe are underserved like Lisbon, Madrid, Barcelona, Rome and Athens. Also charter opportunities existed for the winter months in the Southern Hemisphere$100 million cash to start was what was needed for my model. Air Tahiti Nui thought $70 million was the magic number. You want to have cash available just in case.Looking back, the airline would have hit major headwinds, from 9/11 to the oil crisis and the economic meltdown in 2008–2009.Airport authorities monetize every movement from the moment the plane lands at their airport until it departs. Below you will find two of five pages from the Metropolitan Washington Airports Authority for Washington Dulles, every airport has more of less the same breakdown. Every single action has a price tag - take a look below, which I found to be very interesting. For the first year of service, airlines flying into Athens Airport received a full year of services gratis.A sliver of the numbers part of a business plan for an airline, below. I want to give you an idea of how detailed and thorough a plan is for a start-up airline. The model was kept simple and uncomplicated. Cargo was also included, roughly 10% of revenue.At that time, before the announcement of the Dreamliner, Boeing told me I should get some 737 long-hauls and start flying them across the Atlantic because that is where the future is headed (what Norwegian is doing now).Cash Airplane Related Operating Costs, below, for four types of long-haul aircraft.LOPA or “Layout of Passenger Arrangement” (below). This was during a time when lie flat in business class was a new concept, also the entire economy class cabin was to be similar to United’s Economy Plus.Airline services are broken into four “Modules”, each giving a snap-shot of the the entire airline: Module One - General Information; Module Two -Configuration Data; Module Three - On-board Services (below); Module Four - Ground ServicesADDITION: Some questions I am being asked,Will you consider starting this up again? I never say never. The landscape has changed. Greece is in an economic spiral (even though Aegean is making money) and now United, Delta, and now, Emirates (Emirates!) have jumped into the picture. For Emirates to make this their second European-US route says a lot. What I would do differently is do exactly what Air Tahiti Nui is doing - changing to an all Dreamliner fleet. This is what I would do, the 787 is a very good airplane, and a workhorse. I would get a fleet of 787s and fly to Europe non-stop from places like Kansas City and Des Moines.
I misspelled a name by one letter on an international flight ticket for ANA airways from Tokyo to San Francisco. Will I be allowed to board the flight?
As a travel professional of over 10 years, I can give you two answers.The official answer is that if the name is not exactly as shown in the passport you will be refused boarding or, at the very least, incur an expensive reissue of the ticket, using the best available fare - which on the day of departure is usually the full Y class fare, which is the highest fare the airline will ever charge for the journey.In reality if you contact your point of sale (airline/travel agent/online travel website) straight away, you should be able to amend the name without any real monetary loss. You may need to pay a little more for the ticket with the correctly spelt name, should the flight availability have changed, and/or pay an admin fee, but the fare rules will not come into affect, as the ticket can be voided, as opposed to being cancelled.It needs to be the same calendar day, as all ticket-numbers and associated costs/rules are transmitted to the airlines at 00:00 local time each day.If your point of sale refuses to do this without a satisfactory reason, you can ask for them to confirm this in writing, dated the same day, and then complain to IATA, who are the regulatory body that almost all airlines, tour operators and travel agents are members off. Just the threat of this will make most objections disappear.If you only notice the mistake later, a lot of airlines will allow you to amend up to 3 letters free of charge, as long as it is an obvious mistake, eg Mark rather than Marc, Philip rather Phillip, etc. Again this needs to be done through your original point of sale. If your website/travel agent refuses to help, you can go straight to the airline and ask them to take control of the PNR (passenger name record - basically the reservation). Most will do this if pushed, and it also adds a black mark to the agent concerned.
Do cities in the US have standardized abbreviations or shortcodes just like airports and states?
If by "shortcodes" (most people would just call them abbreviations) you mean those two or three-letter abbreviations correctly applied to postal-service state abbreviations and airport IATA codes, then, yes, unfortunately in my mind, lots of people do also use the latter to describe cities too.This is a phenomenon in the US that I've only noticed wholly within the past 10 years, for people to use the airport code of the nearest airport to a city to apply to the city itself. Thus, San Francisco becomes "SFO," which throughout my Bay Area youth and young adulthood referred only and ever to the airport itself. San Francisco, when an abbreviated form was used, was either the City (pretentious) or S.F. Why on earth would we add that extra O to a city abbreviation, when S.F. was a logical abbreviation, and SFO was the airport? I'm not usuually too much of a prescriptivist when it comes to language change, but this trend totally grates.It continues. PDX is now an ugly-sounding stand-in for Portland, Oregon. (Because saying the short, two-syllable name Portland takes too long??) I've heard people use MSP to refer to the Minneapolis-St. Paul area, instead of the long-standing and lovely name "Twin Cities." (Which also leads to confusion, since MSP used to be a name for the airport only.)One can only feel fortunate that such a nasty thing could never happen in cities like Chicago, where calling the general area ORD or MDW just seems silly beyond words. Likewise New York City, which thankfully has three area airports with IATA codes totally unlike its city name. I'll settle for NYC there.
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