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A few book suggestions
 

Might I suggest:

"How to Survive Corporate Bankruptcy" by Elliot Smith

-and-

"Foolish Dreams" by Judy Engle

This book about a UK LCC spun off from BA, then sold on to EasyJet, gets very good reviews. I keep meaning to buy it, too...

For starters, uncertaintraveler, you may want to refer to the very first milepost I have ever posted in the very first thread I have ever started on FlyerTalk:

You are the CEO of _____ Airlines.

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That sort of advice is hard to find. They are using it themselves (does "David Neeleman" sound familiar? ;) ).

But we could always discuss it here at no charge. Couldn't hurt, right?

Exactly how good would the service be? Luxury (e.g., all First Class)? Or the basic coach product but with the amenities of 1970's air travel? (legroom, meals, free drinks, etc.)

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Off the top of my head, I can think of Midwest Airlines. They had a similar in-flight experience, "Signature Service", and while they did okay for a bit, once the LCCs entered those markets and knocked off that $50 extra you hope to charge, many of their passengers deserted them and they had to launch their "Saver Service" and add in the seats and take out the amenities.

"Signature Service" still exists, but I don't believe it is what it was before the LCCs came in (never flown them, myself).

I remember flying Midwest Express in those days. I was even a member of their frequent flier program.

Every seat was a leather seat one would find in a domestic First Class cabin. There were no middle seats. I used to have a hot meal of filet mignon with two side dishes and a salad. The linens were cloth and the cutlery was silverware. Wine was served, although I do not drink alcoholic beverages. Hot, soft chocolate-chip cookies were served as a dessert. The service and amenities were impeccable. Best of all, the price of the airfare was comparable to the airfare on other airlines.

Ah, how I miss those days...

A few pointers: you will have to use a regional jet in order to have coach seats with no middle seats. A DC-9/MD-80/717 size plane with no middle seats is the standard domestic First Class seat.

Having four published fares based on time of purchase is fine. The quoted fare needs to also be based on seat availability, but that doesn't really add any complexity as far as the user is concerned. For example, if you go to southwest.com and start a reservation, you see all the published fares, and the ones available to purchase are those that meet both the advance purchase and seat availability requirement.

Flying point-to-point is a good idea and may eliminate some of the Midwest Express problem, where a legacy carrier cuts the fares on all the flights out of your hub. The other carrier touts a "Kansas City sale" while putting the screws to you.

Making all tickets refundable is an interesting idea. It could result in revenue leakage (people willing to pay a little more for a refundable ticket, as on Southwest, need not do so if all tickets are refundable).

The biggest problem will be the inevitable competitive response from the legacy carriers who offer $39 fares and triple miles and things like that.

You might stand a better chance of success flying smaller city pairs in order to stay "under the radar" of the major airlines. Take Hooter's Air for example. They have a MYR hub and fly to places like LCK and GYY. They pretty much have the market to themselves. They also fly to BWI, EWR and ATL, but (aside from ATL) when you have the only non-stop service, you do a lot better.

If you try to start off flying NYC-LAX, you will need billions of start-up capital ala JetBlue (but a lot, lot, lot more now that JetBlue is successfully flying JFK-LGB).

Besides, if you do buy a regional jet, you won't need to fly huge city pairs. Fly something like ALB-BTV, JAX-CRW or CAE-DEN.

Any software?
 

Are there any realistic airline management sim games out there? All the ones I have seen have been extremely toyish.

I don't know how you'd define 'toyish' but www.airlinesimulation.com is the most advanced one I've seen for airline management sim software.

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Your airline sounds a lot like the business plan for Primaris (www.primarisairlines.com), with a few differences. They are planning international flights, and don't mention free drinks, but do claim to offer quality food on demand.

As for your price points being $10-$50 above your competitor's ticket price, how will you pick which ticket prices you will be $10-$50 higher than them? You are proposing only 4 or so fares, yet your competitors will have anywhere from 8-30 fares. The simplest fare structure I've seen in the U.S. market is Independence Air, and they have about 6 fares in most markets. They are also losing their shirts. If you have 4 fares and your competitors have 20, which of their fares will you match with a $10-$50 'premium'?

Well, it would be comfortable, but that isn't coach, and you cannot afford to fly people around in 2x2 configurations for $50 more than the legacy carriers. Assuming seat pitch 20% greater, with seat width 50% greater, and assuming all else being equal, you would need to charge 80% more (1.2 times 1.5). I cannot think of any markets that would even come close to filling a 737's worth of seats almost almost double the price, especially when the major airlines often sell First Class for a premium less than that, and you get even more frequent flyer miles for it (another hurdle to overcome).

I think this is why almost all startups, and especially these days, are in all-coach configurations. The well-known JetBlue, as well as Hooters, and I think Transmeridian and the now defunct Southeast Airlines (plus hundreds of others I'm sure), are all coach because the market just isn't there for all-First Class. There is a market for Y/F service, but the legacy carriers certainly have that cornered. :rolleyes:

Even in the big-bucks days of the 1980's and late 1990's, it didn't work (MGM, Legend). Coach seating with more pitch and meals is something I believe has a chance, but you definitely would have your work cut out for you.

The all-coach startups don't have a lot of legroom (maybe two inches more than the crummy 31" standard), and of course they don't have meals. I suspect this is because all-coach and a cheap fare will get you plenty of sales, plus you have to try to appeal to as many people as you can to have a chance at survival.

One more thing on point-to-point -- a true point-to-point system is almost impossible to make work except on short routes (say, ALB-BOS-BTV-ALB, BOS-BGR-MHT-PVD, etc.) Even if you limit yourself to large cities, the number of city pairs across the lower 48 is in the thousands. You would have to blanket the country with planes, and you would have to make one or two stops in order to provide coverage.

Of course, it wouldn't be necessary to serve every single city pair with direct service, but serving only a few of thousands of city pairs will make it almost impossible to have any elite passengers, which is part of your business plan (one that I like, seeing as how JetBlue and the like don't). You might have a few people who only travel to the same places you fly, but those people are few and far between.

If you want to fly long routes, I think you are stuck with the hub-and-spoke system. If you have a huge amount of money, you could start in a big hub ala JetBlue at JFK. Otherwise, don't be stupid like Independence Air. PIT might be a good place to start, seeing as how US Airways can't compete their way out of a paper bag, and Southwest only has one gate at this time.

Portions of the post that previously appeared in this space have been deleted. I would provide you with a reason why, but doing so would likely be against the TOS.

Whatever you do, don't display the number of remaining seats on the web! That is financial suicide, because your competitors will match your capacity in addition to the fare. Ever since the airlines "fired" travel agents and celebrated the advent of on-line ticketing, all the fares are out there for the whole world to see. The only advantage airlines have left is seat inventory (displayed in an amount up to 9 or less to the public).

Consider this -- what if you started an airline using 737's with the standard six across seating, 35" seat pitch, and good meals? That is something that was expected with the price of a coach ticket on the major airlines for years, yet it's something that doesn't exist any more at all.

Without labor unions and other legacy impediments hamstringing your operation (SABRE, paper tickets, interline baggage, etc.), I think you may stand a better chance of success without having to charge a premium. The decent legroom and good meals at the same price will bring in more passengers.

For example, if the others are charging $100 for a flight from A to B, and you charge $120, a lot of people will save the $20 and continue flying the major airline from A to B.

If you charge the same $100, and you can get people to try your product, now they will think "Hmm... I can pay $100 and get crammed into a 31" seat, get no meal, no nasty pillow, no nasty blanket, maybe a package of pretzels, and maybe a beverage if the flight attendants are in a good mood, or I can pay the same $100 and get a seat I can easily sit in, a meal worth eating, and a clean pillow and blanket."

For every $100 you gain in additional passengers, you offset five seats' worth of $20 "loss" based on the seat configuation and service.

This is something the major airlines used to do (competing for customers at the same price with a meal, free movie, etc.), but when they realized all their competitive advantages canceled each other out, they simultanously (simultanously at airline speed that is) cut out all those things to pocket the savings and keep prices the same.

I guarantee you the market is there for better coach service at the same price. All you have to do is survive the inevitable pricing attacks and FF mileage promos.

Portions of the post that previously appeared in this space have been deleted. I would provide you with a reason why, but doing so would likely be against the TOS.

Yes (to "Any thoughts...?"). This one:

No. Go with 3-2.

Reason: the second aisle takes up about 18" in width. Much better to make each of the seats and the single aisle each 3" wider. Feels luxurious. Sure, somebody has to climb over two people to get out, but how often? Worth it even in the 3-side window seat for 3" more width, IMHO, and a no-brainer in the other four.

No hard data to support this, but based on various comments I heard, I suspect part of the difficulty that Midwest Exp. experienced was not that its pax were unwilling to pay a little more, but that their employers were unwilling to pay the add'l cost to fly ME above the cost of AA, etc., especially after 9/11/01. The market you are targeting is significantly a business market. Thus, the fact that many businesses already have preferred airline arrangements with existing carriers is a very significant barrier to entry to your airline. From my experience, these employees are generally supposed to use one of the preferred carriers unless the preferred carriers don't fly the route or another carrier is cheaper. Senior employees may push the policy, but my guess is that most younger ones won't.

Researching these arrangements will likely be difficult. I suspect most if not all will have non-disclosure provisions. Several years ago the largest accounting firms (and maybe some law firms) were sued over these arrangements, contending that clients were reimbursing 100% of the up front cost but not receiving credit for benefits the firms were receiving based upon the volume of business. You might get a sense of these arrangements from the press and court filings in those cases.

One opportunity would be in a place like Atlanta, with an airport which is extremely inconvenient for many of its pax. There has been talk for years about expanding one of the smaller airports on the NW side of the city to handle mainline traffic. For years, this plan has been opposed by Delta and Hartsfield (as well as Eastern when it was around), IIRC.

Regarding point-to-point, MSA size should only be one criteria. For example, several technology-focused areas (RTP, Silicon Valley, Austin, No. Va., and others (before someone jumps on me for leaving one out)) have developed around the country. So there might be enough traffic between these areas to justify daily flights. Speaking of daily flights, there may be markets which could only support flights on certain days (such as Sunday, Monday, Thursday, and Friday). Also with point-to-point, my guess is that the equipment and flight crew coordination is more difficult, especially if there is a delay or problem.

Just a quick thought, but there's suddenly a glut of Fokker F100s on the market that can probably be had cheap... and they're the same planes that AA had configured with 56 seats to run long-haul from DAL competing with Legend.

I have a feeling that if you're going to do this, 56-seat F100s from DAL (where AA and others no longer have the strength to match you, and the Wright Amendment protects your home turf) may well be the way to go. Running a naturally 2-3 plane in 2-2 formation with (say) 38" legroom, you probably may be able to make the business plan work. Running a naturally 3-3 plane like a 737 you probably won't.

(The alternative would be either DC-9s/MD-80s, if you want older planes, or EMB-170/190s, if you want new ones.)