Pilots to start virtual airline next year

gonorthamerica on 17/08/2020 - 11:59
Last edited 17/08/2020 - 14:04 by 1 other user

info sketchy, but heard group of unemployed pilots, are starting a virtual airline.

A virtual airline is when someone, or a travel agency or tour operator, gets an existing airline to operate flights on their behalf, perhaps on a direct route not flown or when there's not enough seats at right price, perhaps in busy season, just like a charter flight, but not just one & ongoing.

This is a little bit different, as it looks like the pilots want to fly the existing airlines aircraft.

So, if it were a number of ex Virgin Australia pilots who are now unemployed, could they then fly Virgin Mark 2 aircraft, just not as employees ?

Aircraft owners lease their aircraft to airlines on a number of differences basis, as I understand it, dray lease (aircraft only), wet lease(crew included), ACMI (aircraft, crew, maintenance & insurance). ACMI often used when an aircraft has unexpected maintenance issues & must be fixed straight away, which can take time - eg. airlines who had 737 max's that were grounded.

This idea seems a little bit different, if in fact it is ex Virgin pilots, wanting to fly Virgin mark 2 aircraft. Sure they were qualified to fly the aircraft before Virgin went into admin.

Told that funds for all airfares sold would go into a secure trust account, so no one can spend funds until flights operate, which is probably as secure as funds can be.

With Virgin mark 2, apparently not going to fly any international routes for years, might be scope for such an airline.

MOD: Remove single-option poll.

Poll Options

  • 5
    great idea
  • 70
    don't understand
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Comments

  • tomleonhart on 17/08/2020 - 12:08
    +23

    Wow. I read that 3 times and I still don't understand lol.

    • YeemaiI on 17/08/2020 - 12:09
      +2

      Yeah, I'm also kinda confused

      • gonorthamerica on 17/08/2020 - 12:15
        +1

        there are obviously going to be some interesting developments in aviation post corona. Some airlines will close down for good. Others with different business models will start up. This above appears to have legs, as staff any maybe other costs might be drastically reduced. Get impression, it's hard for old legacy airlines to reduced costs, due to resistance from staff & unions.

        Look at rex. Low costs, hundreds of parked aircraft & airline crews out of work & that's just in Australia. They don't have qantas baggage(excuse pun)

    • gonorthamerica on 17/08/2020 - 12:12

      there are obviously going to be some interesting developments in aviation post corona. Some airlines will close down for good. Others with different business models will start up. This above appears to have legs, as staff any maybe other costs might be drastically reduced. Get impression, it's hard for old legacy airlines to reduced costs, due to resistance from staff & unions.

      • tomleonhart on 17/08/2020 - 12:13
        +9

        Wow. I read that 3 times and I still don't understand lol.

        • rompastompa on 17/08/2020 - 12:18
          +4

          This is a little bit different.

          • gonorthamerica on 17/08/2020 - 12:21
            +1

            @rompastompa: pilots have started airlines before, but probably from scratch or when the airline they flew for, went belly up.

            Much easier than the former, as if an airline has just gone under, everything may still be in place, just not funds.

            Virgin hasn't gone belly up, but is almost 100% going to be smaller &/or domestic only for a while, maybe few years before they look at international.

        • JIMB0 on 17/08/2020 - 12:21
          +2

          Yeah, I'm also kinda confused

        • iDroid on 17/08/2020 - 12:52

          It's upside down Miss J.

  • antifigjammer on 17/08/2020 - 12:24
    +1

    kind of makes sense, but where would the money come from ? Pilots ?

    • gonorthamerica on 17/08/2020 - 12:37
      +2

      don't know, but probably don't need huge amount of money. It's not like they are starting a new airline.

      If pilots interested in doing this, they might be senior pilots, with some funds.

      Tour operators often buy up seats, the cheap seats. Those Europe river cruises that give you free flights, probably don't pay much, but they get an allocation from an airline at good price & put down some sort of deposit.

      If these pilots had a good business plan & effectively backing by the operating airline, what could go wrong ?

      Ok, things can go wrong, but sounds like they could test market, in school holiday period to start with.

      If they were acting like a tour operator, then money to be made on the ground content side(hotels etc), not just airline fares, so could be some cross subsidization.

  • holdenmg on 17/08/2020 - 12:36
    +1

    Uh, sort of Piggybacking the AOC.

    Would that fly?

    • gonorthamerica on 17/08/2020 - 12:40

      I guess, but maybe more like charter flights, but instead of the operating airlines pilots flying the aircraft, the operating airlines former stood down pilots flying, if in fact virgin.

      Could be Rex. They start in March & looks like they're getting 10 ex Virgin 737s.

      Not sure if a pilot can fly part time for an airline & then part time as the effective charterer of the same aircraft ?

  • MS Paint on 17/08/2020 - 12:43
    +3

    I remember compass airlines MK I & II.

    Different business model but they didn't last long.

    • holdenmg on 17/08/2020 - 12:46

      Ditto.

    • antifigjammer on 17/08/2020 - 12:53

      yeah but this is not a new airline. Virtually no start up costs. Existing airline exists already.

      • holdenmg on 17/08/2020 - 12:55

        You know when you board a flight and have seen the movie before and know the ending?

        That is what this is like…

        • MS Paint on 17/08/2020 - 13:00
          +1

          Fun fact 1 : I went to schoolies on the GC on compass MK I.

          Fun fact 2: I went to toolies on the GC on compass MK II.

          • holdenmg on 17/08/2020 - 13:03

            @MS Paint: We were all young (once).

            Impressive memory. lol

    • gonorthamerica on 17/08/2020 - 12:56
      +1

      it could actually be qantas operating the flights, as they have stood down plenty of pilots as well, but virgin 2 or rex makes more sense.

  • gonorthamerica on 17/08/2020 - 13:14

    without old virgin there are

    no nonstop flights
    Newcastle/Auckland
    Brisbane/Dunedin

    only 1 airline flying
    Brisbane/LA
    Brisbane/Fiji
    Melbourne/Fiji

    very few flights
    Brisbane/Queenstown

    • probably many others

    Obviously air nz could ramp up flights on all these routes including Brisbane/LA but not Brisbane/Fiji

    • smalltime0 on 18/08/2020 - 12:31

      If only we had a flag carrier….

      • antifigjammer on 18/08/2020 - 12:39

        any australian airline is an Australian flag carrier.

  • pegaxs on 17/08/2020 - 13:15
    +4

    So, I can sit at home with my VR headset on and imagine being on a flight for 8 hours?

    Would be easier and cheaper to try and sleep in the most uncomfortable chair you have in the house and then wake up and feel like crap with aching bones.

  • brendanm on 17/08/2020 - 13:28

    Not something I'd get on personally, sounds like the first thing that would go by the wayside is maintenance.

    • gonorthamerica on 17/08/2020 - 13:31
      +2

      but maintenance would be done by operating airline, whether that be virgin mark 2 or Rex.

      If virgin mark 2, that could simply paint on side of aircraft LITE or something similar.

      Just think of it as a charter. The pilots have nothing to do with maintenance. They just report anything amiss & it's fixed.

      • brendanm on 17/08/2020 - 13:34

        Yes, and as the margins are now lower for the the people renting out the plane, they cut costs somewhere else.

        Maintenance is more than "report anything amiss and it's fixed" with an aeroplane. There are many things that must be replaced at certain hour intervals etc.

        • gonorthamerica on 17/08/2020 - 14:41
          +1

          but that's the operating airline that does the maintenance, whether it be a qantas, virgin, rex aircraft or some other carrier. The charterer has nothing to do with that.

          Having rex on the scene come march means more aircraft will be available for charter, but mainly at times like Satrudays, Sunday am & other times when not busy like between peak hour Monday to Friday.

          Will be good for the consumer.

          Almost forgot Alliance are getting something like 14 E190 jets, which are much newer than their old Fokker jets used mostly for FIFO but they also do some flights for Virgin & Qantas on thin routes.

          • brendanm on 17/08/2020 - 17:28

            @gonorthamerica: Do you have some sort of financial interest in this?

            • gonorthamerica on 17/08/2020 - 17:31

              @brendanm: none whatsoever, but am interested in aviation & have worked for a company who did charters, after Sept 11, when many airlines folded or cut back on flights/routes, leading to higher average fares.

    • smalltime0 on 18/08/2020 - 12:32

      lol, the OP definitely negged you.
      What if you operated an airline during a pandemic, that only leased aircraft.
      No, not what Virgin's business model is.

      • antifigjammer on 18/08/2020 - 12:41

        what ? Which virgin business model ? Old Virgin or virgin mark 2 ?

  • gonorthamerica on 17/08/2020 - 13:28
    +1

    could actually be a way for virgin mark 2 to get back into international.

    Could it be called or nicknamed virgin lite ?

    Virgin mark 2 aircraft, former virgin mark 1 pilots flying them, lower costs in a recession, meaning cheaper fares.

    Win/win for everyone except maybe qantas.

    Virgin can offer some international. Pilots who otherwise not employed in aviation, get to do some flying, probably not earning as much as previous, but not stacking shelves at Woolies or Uber driving.

    Then if few years time, virgin mark 2 could say, we're doing flights to X, Y & Z ourselves. Thinner routes could stay on as virgin lite. Might be a way for virgin to employ new pilots on lower pay scales & they progress to main virgin later.

    • MS Paint on 17/08/2020 - 13:31

      Could it be called or nicknamed virgin lite

      Born again Virgin

    • smalltime0 on 18/08/2020 - 12:34

      You know that Virgin doesn't own planes, right?
      They're almost all leased

      • antifigjammer on 18/08/2020 - 12:39

        that's incorrect. They own 4 x B777s (1 leased). They leased all A330s (about 5 I think). They own around 2/3 of their 737s, about 40 or 50 owned, 20 or 30 leased. The 737 figures are a bit rough.

  • MrHyde on 17/08/2020 - 14:05
    +1

    I don't know how airline industries work; but the biggest issue I see is insurance and plane maintenance.

    If the planes belong to Virgin and are still under the Virgin banner - I assume they would fly under Virgin's AOC. As part of that, Virgin would be responsible for a whole lot of things including possibly the pilots license. Pilots need to be certified every year, maybe more. They need to do many simulation tests - who will be paying for those… would Virgin even have any simulators for their long haul aircraft if they are not planning to have the aircrafts anymore.

    The Qantas simulators are booked out for 6-9 months in advance - can't see a pilot from outside the Qantas employed group ever getting a slot on one of their simulators.

    Then, there is the aspect of who organises and pays for airport staff, catering, crew, baggage handlers, etc. If Virgin is still providing all that; and the only thing they are not providing is the pilots - that just does not seem to make any financial sense.

    Then, there is insurance, when something goes wrongs - its the Virgin brand reputation that would be hit. No one would care if Virgin said - thats not our plane because it was pilotted by this other group for a charter - Virgin would still take the blame. Is that a big enough risk for them to not do it.

    Pilots have started airlines before, but it is much more than just hiring a plane and then flying it. They can hire a plane - many companies that lease out planes - but they need to provide all the other services - sales, marketing, airport staff, flight attendants, baggage handlers, caterings, etc, etc,

    • gonorthamerica on 17/08/2020 - 14:21
      +3

      ok IIRC
      pilots have to do some many take offs & landings in a certain period, in that type of aircraft. In South Korea, Asiana A380 pilots have been using their A380s for this, not a simulator, as nearest one is not accessible.

      Many old Virgin 737 pilots are getting the odd shift. Know a few who are averaging 1 shift a week, whereas previously they would have had 4 or even 5, so they are still current.

      Gets more comlicated if talking A330 or B777 pilots.

      Virgin in admin means many pilots have not been stood down, but getting stuff all hours. The hours might increase, but maybe not to full time.

      Look at difference between low cost carriers & high cost legacy carriers.

      Later have many costs lccs don't.

      Interlining is expensive because of delays.

      So are qantas clubs.

      lccs have less staff per aircraft including at airport. No passenger would go to airport staff & say have missed my connecting flights as lccs don't do connections.

      LCCs often have check in for a flight open for longer.

      eg. 1 to 4 hours before a flight, meaning they can employ less check in people, although most of this is farmed out these days, to cheaper 3rd parties, even at Qantas.

      LCCs tend to charge for food & drinks & baggage.

      Those who fly a lot don't over indulge in alcohol & learn to travel light is it saves them money.

      LCCs have less or smaller call centres. Even at legacy carriers, like qantas, if you must speak to someone, you could be on hold for hours.

      Charters tend to include some ground content, whether it be hotels or cars or ? The choice maybe limited to certain hotels or one car rental company, but by doing this, they can offer better deals, just like travel wholesalers.

      Lots & lots of little savings add up.

      High season fares are often 2-3 times more than low season fares for same route. It's supply & demand. Why would an airline sell fares cheaper in high season, if they can fill all or most seats.
      So if a trimmed down version of an airline can offer fares not much above low season costs & only fly mostly in high season, demand should be there.

      Travel agents in Australia sell something like 65% of all international airline tickets sold. They are very good at marketing, especially if there's something in it for them. So, if an airline pays a little bit more commission, often the agent will push them.

  • gonorthamerica on 17/08/2020 - 14:05
    +2

    15 people have said they don't understand. Please explain what you don't understand & will try & rectify if I can

    • Switchblade88 on 17/08/2020 - 14:13
      +1

      What it seems you're tryin to say is that Virgin etc could lease/charter their planes to pilots. That's fine.

      You didn't say anything about your information sources, nor the business model that shows the other 95% of expenses e.g. airport fees, fuel, admin, cabin crew, and so on.

      A pilot does not an airline make. No matter how much they get the attention.

      • gonorthamerica on 17/08/2020 - 14:30
        +2

        not actually a lease

        airports are very negotiable at present

        fuel is cheap, admin is only handling sales basically
        cabin crew are also desperately looking for work in aviation & might work for less or more hours for same, plus might multitask.

        At LCCs flight attendants do most, if not all of the cleaning. At legacy airlines, they often have separate cleaners who come on aircraft after passengers get off.

        At some smaller LCCs, flight attendants are the only ground check in staff. This assumes the inbound flight, arrives long before the outbound flight if same crew.

        • Switchblade88 on 17/08/2020 - 15:11
          +1

          admin is only handling sales basically

          And website, and bookkeeping, and insurance, and payroll. And so on. Like any other business.

          flight attendants do most, if not all of the cleaning

          And in the current environment? They'll cost you more in cleaning hours than the actual flights do.

          Truck drivers might be licenced for HR or HC, but borrowing somebody's truck does not make them a freight company.

          All you've proposed is having the most over-available assets - planes and pilots - without having a way to make money with them, and attempted to enter a depressed flights market with no foreseeable growth. If you took this to any bank or business planner, they'd laugh you all the way to the front door.

          • Hereandnow432 on 19/08/2020 - 10:33

            @Switchblade88: this idea appears to have merit

            Some of the costs you mention switchblade are very lowl

            website - a very basic website could be done inhouse & updated daily if only selling through travel agents

            again bookkeeping can be done inhouse. Seems it would be a very simple structure

            insurance for aircraft would be the airlines responsibility, however, this is where it might get complicated, as pilots might need to be employed by airline, unless they had a lease.

            Just because it's a new idea, doesn't mean it might not work.

            Cleaning doesn't take that long & when there's no urgency to turn the aircraft around fast, well flight attendants can do all that, between time one load of passengers get off & next load get on.

            A small truck driver, can drive on a normal car licence & that's how many small delivery companies start.

            Don't think market for international air travel is depressed at all, but due to recession, more people are probably more price sensitive.

            So you have crews sitting around doing very little. Most at present on jobkeeper.

            You have aircraft, that won't be working hard, with probably lots of spare time available.

            Airlines like virgin need maximum aircraft availability in peak hours Monday to Friday & everything else fits around that.

            If they have 60 owned Boeing 737-800s & mainly concentrating on Brisbane, Sydney & Melbourne, they would probably want as many at 57 flying, with 3 as back up.

            With no international virgin flights, there's a massive gap in the market, which qantas & jetstar may fill to a certain degree, but virgin don't want qantas & jetstar getting the jump on them, so this might be a good stop gap, until virgin themselves gets back into international.

    • smalltime0 on 18/08/2020 - 12:36

      Virgin was going bankrupt anyway. Covid merely expedited the process.
      They don't own that many planes, the vast majority are leased.
      Your English is terrible.

      • Hereandnow432 on 19/08/2020 - 19:29

        virgin are in administration & it looks like bain will be running a trimmed down version within a month or 2. Virgin owned most of it's aircraft. Have no idea of their value now, in depressed aviation market for used aircraft, but 60 odd boeing 737-800s & 4 boeing 777-300ers would have to be worth a few billion dollars surely.

  • MrHyde on 17/08/2020 - 14:17

    Also, what you seem to have described sounds like what Thomas Cook Airlines did before they went belly up last year.

    It provided charters only and primarily for tours sold by Thomas Cook Travels - so, it was not a scheduled service; but it also wasn't a one off flight either.

    • holdenmg on 17/08/2020 - 14:29

      or Laker Airways…

      • gonorthamerica on 17/08/2020 - 14:31

        no Laker was a quasi airline. Lower costs, but used same big airports as likes of BA, with lots of delays.

    • gonorthamerica on 17/08/2020 - 14:33

      think Cooks were a charter airline & sold most of their seats through travel agents with or without the ground content.

      Think they went belly up, as didn't change with times & therefore couldn't compete with massive Ryanair.

  • TheBilly on 17/08/2020 - 14:21
    +1

    So after reading the above … What you are trying to say Pilots have lost their job so they will be flying planes on flight simulator using an occulus rift?

    • gonorthamerica on 17/08/2020 - 14:34

      no simulators involved if the pilots are current.

  • MrHyde on 17/08/2020 - 15:11
    +1

    I went looking for what information I could find. For an airline, the variable cost of a flight from Melbourne to Sydney is about A$10000. This cost includes pilots, cabin crew, fuel, insurance, airport and air traffic control fees, maintenance and aircraft ownership costs. In addition, there are fixed costs that make up another $10000. So, you are looking at about $20K cost for an airline to run one flight from Melbourne to Sydney.

    I also found another site in the US that the charter cost for a B737 is about US$17K per hour. This does not include any crew or ground staff.

    • gonorthamerica on 17/08/2020 - 17:23
      +2

      costs depend on aircraft size/age/route length

      Have been involved with charters myself, so know a far bit about costings for charters, even though these pilots aren't strictly doing charters.

      Something a bit new, but world has to adapt.

      As mentioned above, no crew costs, fuel is cheap, airport fees very negotiable.

      If your AU$10k+$10k is for a 168 seat aircraft, that's AU$119/seat or if 180 seat AU$111/seat. Suggest these numbers are very rough & the more you do, the more your fixed costs are amortised over.

      US$17k/hour is an adhoc (one off cost from a broker, who's making 20-25% in most cases), but even if take this figure for SYD/MEL/SYD (2 hours flying) thats ~AU$48k.

      So for 1st example of yours the total cost of SYD/MEL/SYD is AU$40k. 2nd example is AU$48k.

      A 737-300 (maximum about 150), has far less seats than a 737-800 (maximum about 186) or 737-900 (maximum about 215)

      Airlines are paying costs to have aircraft sit doing nothing, so they might be best to have them flying some & at same time being able to offer some nonstop routes, even if seasonal.

      Say it was Virgin & I don't know if it is.

      Tens of thousands have credits for flights they could not take.

      For simplicity let's just say that Virgin had sold 400 seats total from Bris/Syd/Melb to Fiji every day for 4 months, when no flights, so that's 48,000 people who wanted to go to Fiji (probably many more actually).

      Say the pilots organised 2 flights a week from each of those 3 airports to Fiji. Then maybe Virgin could offer some of the 48,000 flights to Fiji on same aircraft, same crews, with slightly less amenities (like no interlining), with no extra costs to be worn by passengers. Some would surely go for it. Airlines have a lot of credit vouchers out there.

      You can also get much better price for a series of 20 return flights/flight, than just 1, especially when everyone is familiar with airports at both ends.

  • MrHyde on 17/08/2020 - 15:15
    +2

    More information:

    The pilot cost as a comparison of all costs to run an airline is small.

    For a UK charter
    In 1996 - 4.98%
    In 1997 - 5.08%
    In 1998 - 5.31%
    In 1999 - 6.24%
    In 2000 - 5.84%

    And for British Airways:

    In 1996 - 3.93%
    In 1997 - 3.86%
    In 1998 - 3.84%
    In 1999 - 3.72%
    In 2000 - 3.57%

    So, pilots working for a lower salary is not going to make that much difference to the overall business plan to getting an airline off the ground and more profitable.

    • gonorthamerica on 17/08/2020 - 17:04
      +2

      yes but crews working for no salary & all the other costs savings add up (less overall staff per aircraft, is a huge saving), which is why low cost carriers do so well in most cases.

      A virtual airline is not having to get airline off the ground. The operating airline already exists, but there's a huge void left by virgin not doing international.

      Only qantas doing brisbane/la nonstop means their fares will be high. No one from Brisbane wants to fly by australias worst airport for changing terminals. A Brisbane/Sydney/LA flight adds at least 4.5 hours in each direction, probably more.
      (1.5 hours Bris/Syd, 2 hours min connect, 1 hour extra flying time to LA, but have seen cases where some passengers had 2 hours connecting at sydney & still missed their la flight, flew back to Bris & told to come back next day)

  • holdenmg on 17/08/2020 - 15:22

    So, are these Aircraft going to handle Freight or just Passengers and Luggage?

    • gonorthamerica on 17/08/2020 - 16:57
      +1

      both I presume. Freight always helps offset airfares & understand freight is doing very well at present.

  • antifigjammer on 17/08/2020 - 17:40
    +1

    maybe virgin needs a charter division, ie a few staff to handle charters, not dozens. They work in with main airline.

    Simpler model to main airline. Bit like Jetstar to Qantas, but using same aircraft, effectively same crews, maybe seasonally.

    Look at it from point of view of aircraft owners.

    Even if Rex take 10 of ex Virgin leased 737s, there's still a lot out there, parked, that might not be that old, accrueing parking & maintenance costs.

    The owners would be very keen to get them doing anything, even if only few days a week, to bring in some revenue to offset costs to start with.

    Also Virgin owns 4 Boeing 777s. Talk of selling them, but can't be any buyers out there, especially when they have small cargo doors. They might be able to sell or lease them in Africa for peanuts, but why bother.

    Use them & 737s they are keeping for charters. School holidays run a total of about 16 weeks a year, (9+2+3+2) university holidays even more.

  • alxr0101 on 18/08/2020 - 08:27
    +1

    I need an MS PAINT to explain all this.

    • smalltime0 on 18/08/2020 - 12:40
      +1

      It should be the requirement to post

  • Waltervp on 18/08/2020 - 09:50
    +1

    I don't think planes would be used enough, but yes, a charter organisation that just sources a plane and maybe even crew it themselves is an interesting option again. I wonder if we will hear more about it. We used to call them Camping Holidays when a company would charter a flight and back to a destination and tee up accommodation the same way. We had cheap holiday alternatives to popular spots. These were popular in Europe in the 1970s and 80s when plane travel became more popular for family holidays.

    • gonorthamerica on 18/08/2020 - 10:47
      +1

      charter flights are huge in Europe, for example going skiing from UK to Europe or UK/Europe to sunny destinations in Europe/North Africa in their winter.

      But different rules over there, to do with security of funds etc.

      • smalltime0 on 18/08/2020 - 12:43

        No, because a Cessna doing an hour of flying goes to a different country.
        5 hours of flying in a 737 gets you from Perth to Sydney.

        If a "Virgin mk2" were to operate, it'd have to be a competitor to QANTAS, not the likes of Rex. There are about a hundred small charter companies, they do tour flights.

        • Waltervp on 19/08/2020 - 09:38

          Also having a huge market helps I guess… but the flights I did as part of a typical Dutch family who couldn't afford to holiday in Holland self, was in DC10 large jets from an old Dutch airline called Martinair. So not exactly a Cessna and Amsterdam to Spain was still several hours flying. But yes, I think unless all Australians flew from one airport things would be different here too!!

  • mhasan on 18/08/2020 - 19:20

    you mean big airlines renting out their unused aeroplanes to a virtual/new airline? just like how new telco company use Telstra and Optus infrastructure?

  • TransportPosters on 22/08/2020 - 00:05
    +2

    Damn, I thought all those years spent playing Microsoft Flight SImulator and Flight Unlimited in my bedroom were gonna pay off.

    Thanks for the clarification.

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