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Starting an Airline

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Re: Starting an Airline

#131

Post by goblin89 »

ChuckMcM wrote: post #105
pkorzeniewski wrote: post #22

It blows my mind how people start such big businesses. You must build an airport, hire stuff, buy planes, meet many legal requirements and so on, all costing tens of millions of dollars, and on top of that, it must be profitable. This gives some insight, but still it's terryfing. I feel so small.

Heh, but do you enslave entire worlds in StarCraft 2? I've found that enterprise is like real time strategy games a little bit, there are a lot of things all at the same time that have to be working well for you to be successful, but if you can put your head in the frame of mind that its just a game (or game like) then you can set aside a big chunk of the tension of doing it for real. The Flying Wallendas (high wire…

Anecdotally, I acquire such a frame of mind after a session of Civilization IV (just tried recently, never played strategy video games before). Everything looks like time or resource investment with a goal, and I feel a bit detached emotionally when making choices. I guess I should be worried that this feels unusual :)

Re: Starting an Airline

#132

Post by hershel »

GFischer wrote: post #115
hershel wrote: post #94

Earlier quoted context omitted.

There are technologies today , for example teleconference rooms, which probably capture most verbal and non-verbal feedbackin meetings, to the points participants claim it's like being there. It would be interesting to do an experiment:isolate someone for a period of time, but let him have full contact with family and friends via the best electronic means we have , and measure the impact of his mood and well-being.

It's funny, because, while I'm not extremely isolated, I have lived through periods of my life when all my family was abroad (I stayed in Uruguay, most emigrated, others studied abroad), and I have few local friends. No amount of telephone calls, chats, Facebook or Skyping can compare to in-person interaction. I have a photo of a recent Christmas, with 3 screens with Skype calls to family in Canada and Europe on each…

But skype does miss eye-contact and picture of half body (to get all hand movements which are important) , and the illusion of being in the same room created by telepresence , and probably had worse latency , and probably other factors i'm not aware of.

And we know from the "uncanny valley" that humans are very very sensitive to little things in human/human communication.

So it might just be that telepresence offers a altogether different quality of experience.

And regarding the topic - currently , maybe business air travel isn't dying(thought in 2009 there was a lot of talk about disruption from telepresence). But assuming we'll find the formula for remote face to face communications, and assuming there's enough bandwidth, the pace of change could be rapid(unless people will keep sticking with tradition, which might be the thing now that slows the process).

Anyway, i would be really interested to see major deployment of telepresence quality systems deployed in homes, and how that would affect culture.

Re: Starting an Airline

#133

Post by dekhn »

uuilly wrote: post #91
dekhn wrote: post #85

Earlier quoted context omitted.

Air travel in the US is a massively subsidized business (the government gives huge amounts of money to Boeing to make next-gen warcraft, then Boeing translates those R&D concepts into airplanes. The airlines were, for a long time, subsidized by air post. Fuel prices are still much lower than they could be. These things are barely directly profitable, but they contribute immensely to the global economy. That's the int…

Defense contracts are not subsidies. They are won by competition with the likes of Lockheed. Most of the money won is spent providing the product or service. The profit margins on defense contracts are not nearly large enough to "subsidize" an airline business. Yes, some R&D crosses over but it's no easy trick. Lockheed does not play in the commercial space at all. Disclosure: Former Boeing Employee.

I've read enough books about Boeing to say that this is established practice (IE, the people who ran boeing during the 747 period specifically said this internally).

Some R&D examples I've seen is the movement of advanced electronics and structural materials from military craft to commercial craft. Boeing and AirBus both benefitted tremendously by their military contracts.

Re: Starting an Airline

#134

Post by ianstallings »

dictum wrote: post #129
ianstallings wrote: post #128

Earlier quoted context omitted.

It's precisely where the idea of a corporation comes in. How can a group of people risk so much? The only way is if it fails they don't go to prison or suffer for the rest of their lives because of that failure. Otherwise it would be very hard to convince people to take such enormous risks. The main "problem" with capitalistic business is in expectations. People need to realize that every day comes with risk. And onl…

> But the little guy working the line, he just wants a paycheck with no risk. Unfortunately there would be very little reward if that were so. The little guys working the lines usually don't have safety nets and credentials—inherited money, money from previously founded business, mentors, a reputation, or even supportive relatives—so their fear of failure is somewhat justified.

True, but without the risk there would be no job for them to fear losing in the first place. People need to be responsible to themselves first, and a safety net is part of that. I say that knowing I just blew through $20k+ of my own safety net after going jobless for months. It's just business after all. But then again, this is why I have no qualms giving them my upsized salary demands. Because after all, it's just business. It's harsh, reality.

The days of retiring with a gold watch and pension were gone long before I ever hit the market decades ago unfortunately.

Re: Starting an Airline

#135

Post by [deleted] »

pkorzeniewski wrote: post #22

It blows my mind how people start such big businesses. You must build an airport, hire stuff, buy planes, meet many legal requirements and so on, all costing tens of millions of dollars, and on top of that, it must be profitable. This gives some insight, but still it's terryfing. I feel so small.

[deleted]

Re: Starting an Airline

#136

Post by gaius »

peckrob wrote: post #69
ubernostrum wrote: post #60

Earlier quoted context omitted.

While there have been a few attempts at competing on other metrics (there were several attempts to start business-class only airlines in the late 90s and early 2000s) There are still business-catered offerings, they just tend to be a division of a parent (legacy) carrier. US Airways and Delta's "shuttle" offerings between major business destinations on the east coast stand out as an example. A couple of the large air…

> It's just that there doesn't seem to be enough demand to sustain an entire airline dedicated to the idea. Yeah, this is kind of what I meant. The only people capable of doing this are the majors (and then only on a small handful of mostly-Transatlantic routes). Every attempt so far at building a whole airline around the idea of not competing on price has met with failure. And, as a sidenote, I really want to take t…

I did that a couple of times back in the day. The plane would take off with just enough fuel to get to Ireland, where you would do US immigration while it refuelled, then on to New York, and straight off the plane without any queuing. I think the airline was EOS or Silverjet or something.

Re: Starting an Airline

#137

Post by larrys »

neurotech1 wrote: post #112
dekhn wrote: post #85

Earlier quoted context omitted.

Air travel in the US is a massively subsidized business (the government gives huge amounts of money to Boeing to make next-gen warcraft, then Boeing translates those R&D concepts into airplanes. The airlines were, for a long time, subsidized by air post. Fuel prices are still much lower than they could be. These things are barely directly profitable, but they contribute immensely to the global economy. That's the int…

Boeing Defense doesn't make a whole lot of surplus cash either.[1] They've eaten some large expenses in the last 2 years (KC-46 tanker cost overrun, Advanced Super Hornet development program) and probably others. I don't believe there is significant cash flow over to Boeing Commercial Aircraft. There is exceptions like the KC-46 and P-8, but most programs are Boeing Defense only with almost no crossover. The Boeing 7…

"Boeing Defense doesn't make a whole lot of surplus cash either"

It does give you economies of scale in the sense that any larger company gains purchasing power and for that matter visibility (and political power) by employing more people.

Re: Starting an Airline

#138

Post by delluminatus »

baddox wrote: post #130
rayiner wrote: post #34

Earlier quoted context omitted.

The key observation is that the airport is built on credit (by the government, not the airline, using bonds), and the airplanes are usually either bought on credit or leased (in which case they are built by the airline on credit). It's an illustration of why banks and bank debt are so important in our economy! This capital-intensive sort of business doesn't happen by an entrepreneur writing a $1 billion check from fu…

> It's an illustration of why banks and bank debt are so important in our economy! This capital-intensive sort of business doesn't happen by an entrepreneur writing a $1 billion check from funds he has on hand. Aren't you just pushing the "problem" back one step? The entrepreneur writing a $1 billion check from funds he has on hand is now the banker , not the airline guy. Of course, I guess these days you can keep pu…

Not exactly, because bankers aren't required to have monetary reserves equal to their loan amount. So a bank can "loan" an entrepreneur $1B of which the bank only physically possesses, say, $100 million. This is what is meant by banks "creating" money -- the bank just created $900 million.

Re: Starting an Airline

#139

Post by gaius »

hershel wrote: post #94
GFischer wrote: post #42

Earlier quoted context omitted.

On point 2), humans are still very much "social animals", and time and time again I see that business works a lot better face to face, and trust is much more easily gained. That has been repeatedly established, and there are very strong reasons why people with very limited time still travel a lot of hours to conduct their business. Not everyone is the same, but it is the norm rather than the exception. http://www.iac…

There are technologies today , for example teleconference rooms, which probably capture most verbal and non-verbal feedbackin meetings, to the points participants claim it's like being there. It would be interesting to do an experiment:isolate someone for a period of time, but let him have full contact with family and friends via the best electronic means we have , and measure the impact of his mood and well-being.

Even the full-presence suites don't quite work once you start going over any distance. The lag is just enough that the bit of your brain that processes NVCs gets a little out of sync with your thoughts.

Re: Starting an Airline

#140

Post by a3n »

sharkweek wrote: post #78
peckrob wrote: post #51

There's a saying in the airline industry that goes something like this: "What's the fastest way to become a millionaire in the airline industry? Start with a billion dollars." I don't work in the airlines, but I'm a private pilot with lots of friends and family who do work or have worked in the airlines (and in the aviation industry in general). Expenses are high and often unpredictable, and profits are low. A lot of…

I would assume these margins get even thinner and customer service even worse in the future as most people really do just go to a referral site, grab the cheapest flight and call it a day (I mean honestly, where I'm currently at in life, I don't need comfort on a flight, I just need to get from point a to point b as cheaply as possible and I assume this applies to 80% of people flying). I was just on a Frontier fligh…

I go years between flights, so I haven't looked into this, but I've been wondering recently if it would make sense to ship (UPS, FedEx) your luggage ahead of time. Since the airlines are making big profits on luggage fees and penalties, I'm guessing shipping price wouldn't be that much more. What you'd gain is (I assume) more reliable delivery, and the opportunity to know that your luggage arrived before you get there, as opposed to wondering if it will get there, and operating without it worst case.
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