Any thoughts on starting a single airplane part 135 company?

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cirrusmx

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I know its the best way to become a millonaire. Start with a billion and end up with a million by starting your own airline (mom and pop charter operator). However, I really want to give it a shot. Worst case scenario I end up bankrupt, but i am young and have time to start over. Anyone wants to share their journey? What type of airplane would you use for a start up? Pricing schemes? FSDO application stories? loans? etc. I have been looking at beech barons, Senecas and the likes, maybe even a king Air 90.
 
Most important of all with small aviation businesses is that knowing how to run a small business is more important than knowing how to fly. I'd start by going to work at a small GA outfit (like an FBO with charter services) and getting experience in both operations and management. Working on a business degree (if you don't already have one) in your spare time would be a plus. After a couple of years doing that, you'll know what you need to start your own company and run it successfully.
 
Ron Levy said:
I'd start by going to work at a small GA outfit (like an FBO with charter services) and getting experience in both operations and management.
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I would agree with this. I've seen too many people leap into business without really knowing the business beforehand. Many times their fantasy of what it might be like does not match reality.
 
cirrusmx said:
I know its the best way to become a millonaire. Start with a billion and end up with a million by starting your own airline (mom and pop charter operator). However, I really want to give it a shot. Worst case scenario I end up bankrupt, but i am young and have time to start over. Anyone wants to share their journey? What type of airplane would you use for a start up? Pricing schemes? FSDO application stories? loans? etc. I have been looking at beech barons, Senecas and the likes, maybe even a king Air 90.
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Why not put your airplane on someone else's 135 ticket? Much easier to get done assuming you have the pilot qualifications for the insurance policy and FAR 135.243.

This might let you dip your foot in the pool and gain some experience in that kind of operation, before you dive in head first.
 
I assume you mean single pilot? I have an idea, just send all the money you have and all you can borrow to me. You won't be any more broke and at least one of us will get some use out of the money. Just a suggestion:rolleyes2:
 
Do you have customers ?

Anything else can be arranged.
 
I'd make sure I had worked out a business plan that was detailed enough to show me exactly how many passengers I'd need to fly to stay out of the red and understood where they were going to come from.
 
And don't expect to make money right away. Make sure you can float the business for a year or more with little income.
 
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There are a number of operators around the country that use SR22s on a 'basic' 135 certificate (up to 5 planes). The paperwork for this is considerable and the wait times to get the FSDO to even look at you can be anywhere from weeks to years depending on where you are located (it is weeks in locations without customers and years in places where you could actually make money with this :wink2: ). That type of certificate has a requirement for a certain number of key employees (director of operations, director of maintenance, chief pilot) with minimum qualifications for each of those posts. At times, roles can be combined if someone has the credentials to fill both (e.g. 135 qualified pilot and A&P) and it is only a small 1-2 airplane outfit.

For IFR operation you need to have a functional autopilot, redundant power supplies (e.g. the standby alt on the SR-22) and a couple more requirements. The AP needs to be listed in the op-specs, the pilot needs to be specifically trained to 'use the AP in lieu of a second in command' and the pilots checkrides have to include autopilot operation and signoff.

The paperwork for a single-pilot, 1 airplane operation is considerably simpler without some of the personnel requirements. But it is what it is, a single pilot business. With duty hour restrictions, maintenance downtimes etc. your ability to respond to jobs that come up on short notice could be severely limited.

If you put 'your plane' (or typically your banks plane) on someone elses certificate, it raises all kinds of flags with the feds if you actually want to fly it yourself (as an employee of the certificate holder). They have become really anal about 'operational control'. All the decisions whether a particular fligth can be dispatched have to be made by the certificate holder or more precisely the people named on the certificate to do so (DOI). What they dont want is an owner to have his plane on someones certificate, drum up the customers himself and perform flights on his own decisions with the certificate holder just 'signing off' on things.

Again, if you have 'launch customers' that will guarantee a set number of hours, all the rest can be set up. No customers, no business.
 
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You won't be young by the time you get your 135 certificate. It takes 2 years average.
 
You are far better off to find a company that will sign up for a minimum of 50 hrs per month of flight time.

Then find a millionaire friend to buy a jet and lease it to the above company.

Then have the above company hire you as chief pilot.

This is FAR easier, cheaper, better, smoother, faster than a 135 cert.(several which TP has written)
 
Buy a Waco and start a ride business. A lot less paper, a lot more fun, and at the end you can still sell the Waco for about what you put in it if you take care of it.

Example: http://biplaneridesoveratlanta.com/flights.html

First move someplace with a long tourist season and something people want to see.

Steve above has three Waco's he keeps busy last I heard. New England in summer, Atlanta in winter. He has other aircraft as well.

Ernie
No, mine is not for sale.
 
Appreciate the responses. I am thinking a caravan or king air and hire a contract/full time pilot to fly the plane. I am more interested in starting and managing the business than flying airplanes for hire. It seems the money to be made lies in how much you buy the plane for.
 
I'll preface this with "I don't know jack about the business", but I'd hazard a guess that the acquisition cost of the aircraft is only a small part of how much money you can make. In the case of a Caravan or King Air, you're dealing with turbines with expensive maintenance and overhaul needs. There are the expenses of recurrent training for pilots, chartering a replacement plane when yours goes down for maintenance at a remote location and the client needs to get home, insurance, advertising, legal compliance, etc. Not to mention the fixed annual costs of plane ownership. In the case of a Caravan, I don't know if the difference between spending $900k and $1.3M on a plane, spread over a 10+ year loan, will make or break the cash flow in your business plan.
 
cirrusmx said:
It seems the money to be made lies in how much you buy the plane for.
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The money is in whether you

- have customers who buy enough hours from you year-around.
- have a maintenance provider who benefits from your plane flying and not from your plane sitting in his hangar.
- have customers who buy enough hours from you year-around.
- have access to below market price capital (iow. someone who gives you a plane below what it costs him to own it just so he can say that he is an aircraft owner)
- have customers who buy enough hours from you year-around.
 
weilke said:
Do you have customers ?

Anything else can be arranged.
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Listen to this advice! I run a business (successfully) and this is the most true advice you will ever hear. Business plans are nice but they are based on assumptions and every failed business had one.
 
The best advice I got in business school about developing a business plan is to double your expenses and half your revenue in the first two years. Then it is more realistic.

Andrew
 
I'd recommend a small twin with FIKI and a good autopilot. Club seating is a must.

As far as the business side goes good luck, i just spin wrenches for a small 135, (we actually have a conformity check for our 4th plane in the AM) but small planes keep the costs down, twins make the customer happy and make maintenance and required redundancy a little easier, the autopilot will help with getting single pilot approval and FIKI will keep you flying for more of the year. Austin may be warm but you need to be able to fly to points north.

If you do go for a single leave the turbos at home, with the 135 oxygen requirements they will just eat more mx dollars. We did well for a small clientele with a Mooney but we are doing better with Cirrus as they are more comfortable and the BRS helps calm some of the folks who object to singles.
 
Skylane81E said:
I'd recommend a small twin with FIKI and a good autopilot. Club seating is a must.

As far as the business side goes good luck, i just spin wrenches for a small 135, (we actually have a conformity check for our 4th plane in the AM) but small planes keep the costs down, twins make the customer happy and make maintenance and required redundancy a little easier, the autopilot will help with getting single pilot approval and FIKI will keep you flying for more of the year. Austin may be warm but you need to be able to fly to points north.

If you do go for a single leave the turbos at home, with the 135 oxygen requirements they will just eat more mx dollars. We did well for a small clientele with a Mooney but we are doing better with Cirrus as they are more comfortable and the BRS helps calm some of the folks who object to singles.
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I initially thought about a baron or seneca, which are cheaper to buy and operate than a bigger turbo prop. However, I see the price per seat on a bigger faster plane is eventually cheaper than on a small piston twin. That would make it more accesible for the market I want to target.

I don't really see the viability of single engine pistons for on demand air taxi. They are slow, don't go far enough to beat the drive, and can't carry a real payload. Currently, I fly a cirrus sr22t on 350 nm trips every two weeks and take maybe a pax or two skinny ones and with baggage it is probably at gross weight. Cirrus is good for personal transport, but once you get it on charter work and longer trips it will probably be flying over gross every time and that is illegal.
 
We operate with in limits and the SR22 is quite popular. Most trips are less than 300 miles and one or maybe two pax. We also do some fairly regular cargo hauls, small boxes that need to be there NOW, the fact that we have the "cheap" single available has been a big plus.

Forget about who you WANT to sell to, who is around to actually buy time from you?
 
cirrusmx said:
I don't really see the viability of single engine pistons for on demand air taxi. They are slow, don't go far enough to beat the drive, and can't carry a real payload. Currently, I fly a cirrus sr22t on 350 nm trips every two weeks and take maybe a pax or two skinny ones and with baggage it is probably at gross weight. Cirrus is good for personal transport, but once you get it on charter work and longer trips it will probably be flying over gross every time and that is illegal.
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A lot of charter work may be personal transport. One or two people. How about a husband and wife wanting to take a vacation or get to their boat? An account representative and an engineer going to meet with a new potential client.

In the medical device business I am involved in we usually send 2-3 people for business trips. You don't usually need to send a whole team of people.

Sure the price per seat is less expensive on a turbo prop but you've got to fill those seats.
 
dell30rb said:
A lot of charter work may be personal transport.
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I dont believe that that is the experience of most charter operators.

Outside of the companies catering to the rich and famous, most short-range transport seems to be:
- 2 attorneys to deposition
- 1 customer service tech with small box containing expensive spare-part to get dohicky machine back into production
- 1 accountant and 1 bank manager and a box of files to check on a company
- 1 estimator to meet with public works director about a building project
.
.
.


In the medical device business I am involved in we usually send 2-3 people for business trips. You don't usually need to send a whole team of people.
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And for most of those trips, your companies penny-pinchers would probably disallow travel by chartered airplane in favor of driving and an overnight.
 
weilke said:
And for most of those trips, your companies penny-pinchers would probably disallow travel by chartered airplane in favor of driving and an overnight.
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A lot of those were only 1-2 people, which was my point for justifying the use of a single.

The penny pinchers would be fine. Charter is more expensive but still would compare. This meeting was with 2 people because the company did not want to buy an extra hotel room / dinner. 3 would have been preferred.


business trip recently for a 1hr meeting (my company)

Time and cost to drive from Raleigh to Anderson;

Round trip - 10.3 hours and 588 miles. 588 x 55.5 cents per mile = $326

2 Hotel rooms - $260

Dinner at restaurant - $70

Losing 1/2 day of work - $400??

Total Cost: $1056




Time and Cost to Fly from Raleigh to Anderson Regional Airport,

1 hour driving to/from the airport $40 (@.55 c/mile)

3.4 hours in the airplane = $330

Crew car to drive 3 miles to meeting: Free

Total Cost: $370

Unfortunately I don't have a commercial certificate so I could not legally fly.


Charter would be more expensive than me flying a private aircraft.. but I do know an operator who operates a bonanza that would charge about $850 for this trip.

Obviously weather plays a factor but in our area there is not a terrible amount of icing or widespread tstorms
 
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dell30rb said:
Charter would be more expensive than me flying a private aircraft.. but I do know an operator who operates a bonanza that would charge about $850 for this trip.
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The Cirrus operators seem to charge between $350-430/hr +/- some extra fees to have the pilot sitting around at the destination for anything beyond 2hrs.

At $1190 to $1462 in transportation alone, you have to really make a good case on the 'lost work' part of the equation.

For you and me, flying in a 'small plane' is fun, for a good share of the population it is the stuff of nightmares. I tried to convince the people I work with that rather than sending one person each to an outlying location for 3 days out of the week, we should send one guy on a one day round-robin with the local charter operator (saving 2 'man-days' in the process). No takers.
 
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weilke said:
The Cirrus operators seem to charge between $350-430/hr +/- some extra fees to have the pilot sitting around at the destination for anything beyond 2hrs.

At $1190 to $1462 in transportation alone, you have to really make a good case on the 'lost work' part of the equation.

For you and me, flying in a 'small plane' is fun, for a good share of the population it is the stuff of nightmares. I tried to convince the people I work with that rather than sending one person to an outlying location for 3 days out of the week, we should send one guy on a one day round-robin with the local charter operator (saving 2 'man-days' in the process). No takers.
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The $400 for lost work is conservative in this case.

Considering that the flying time was in a slow 115kt airplane, using a 30% reduced time (cirrus = fast) it would only cost around $900 using a $400 per hour model.

I understand what you say about... small planes being the stuff of nightmares for many, though my experience has been different. Of about 12 friends I have offered a ride to since I got my ticket last year, only two declined for a fear of small planes. And one of those has a phobia issue in general... The other 10 loved it.

Funny it seems that until about 10-15 years ago many, many more companies engaged in charter services or owned planes, and considered them essential to business. Face to face contact in business is still essential, that has not changed.

The internet and communication has curbed that a bit, and public image of 'fatcats' and media-induced (if it bleeds it leads) public fear of flying in light planes has done the rest. Airlines have come down in price but the TSA is so much of a pain in the ass it almost cancels that out.
 
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dell30rb said:
The $400 for lost work is conservative in this case.

Considering that the flying time was in a slow 115kt airplane, using a 30% reduced time (cirrus = fast) it would only cost around $900 using a $400 per hour model.
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The difference in block times between a 115kt aircraft and a 170kt aircraft on short hops is remarkably small.

I understand the math on how much you can 'save' by shuttling around staff by plane, the people that hold the money dont.

There are a couple of these satsair-like outfits around, I am not sure how viable any of them are at this point. Probably some room for marketing (leading back to my original point: do you have customers ? If yes, the rest can be arranged).
 
weilke said:
There are a couple of these satsair-like outfits around, I am not sure how viable any of them are at this point. Probably some room for marketing (leading back to my original point: do you have customers ? If yes, the rest can be arranged).
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Yes I'll agree that most if not all aviation charter companies I have come in contact with are remarkably weak in the marketing department. "If you build it, they will come" does not apply to the charter service.
 
I fly a cirrus myself down to mexico every couple of weeks and two grown ups (pilot + pax, fuel to tabs, and baggage and bang you are at gross if not over. That flight is only a 2 hour block time and at cost is expensive, let alone the empty legs and your margin. So back and forth two times puts you at at least 8 hrs hobbs. Deal breaker to a lot of people. That is why I am inclined for a bigger six or eight seater in which people can pitch in and pay a lower price per seat.
 
dell30rb said:
Yes I'll agree that most if not all aviation charter companies I have come in contact with are remarkably weak in the marketing department. "If you build it, they will come" does not apply to the charter service.
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Well, and then there are the guys up in Chicago who are all about the marketing but rather naive when it comes to the aviation side of the business. When they started out:

- They (or rather their overseas backer) owned the planes,
- they owned the snazzy website and the call-center,
- they did all the interviews with the local lifestyle magazines rub elbows with the rich and famous etc,
- they didn't hold the certificate.

After they had a fatal accident, the NTSB report revealed an interesting pattern of 'shopping around' the flying work and their planes+pilots to different certificate holders with issues revolving around operational control. Also some problems relating to pilot qualifications etc. None of the marketing material at the time indicated 'all flights operated by xx.xxxx a FAA certified charter provider' or any other reference that they were just a marketing channel. I dont know if anyone ever got dinged for the whole episode by the FAA, the corporation that held the certificate at the time shows up as 'involuntary dissolution' and the then DO shows up with a very recent date of issuance for his commercial cert.....

By now, they have a 1 airplane 135 certificate out of milwaukee. Dont know if they still farm out some of the work, their website is mum about it.

Just another way to go about it. Rather than 'build it and they will come', the 'round up customers first, worry about the pesky paperwork later' concept.
 
cirrusmx said:
I fly a cirrus myself down to mexico every couple of weeks and two grown ups (pilot + pax, fuel to tabs, and baggage and bang you are at gross if not over. That flight is only a 2 hour block time and at cost is expensive, let alone the empty legs and your margin. So back and forth two times puts you at at least 8 hrs hobbs. Deal breaker to a lot of people. That is why I am inclined for a bigger six or eight seater in which people can pitch in and pay a lower price per seat.
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You indicate that you have a turbo. Most of the charter outfits seem to go with NA planes and minimal equipment to make the payload issue work. I suspect that they dont tank the plane either until they know what they need for an upcoming trip (with 135 alternates).
 
You are correct. I fly a turbo and personallly never go over gross. However, it baffles me how people consistently fly those airplanes out of the weight and balance envelope.
 
Something we have found, people are not willing to go in together on a charter, so far one customer per flight, we just get calls "company X needs to go to Chicago tomorrow for a 2hr meeting for Y people, one small bag each." Some of the clients who have it figgured out will do round robin trips and hit several stop a over a 1-2 day trip.

They will almost with out fail take the smallest plane that fits the bill.
 
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