So you wanna start an airline

There is an old axiom in the flying biz that if you want to make a small fortune in aviation start with a big one.  This is an industry that is second to none in unexpected disruptions.  It is an attempt to run a very complex system full of literally moving parts while dealing with the vagueries of weather, human behavior and mechanical complexity.  The list of outside forces that can effect profitability seems to grow each year.  Fuels costs, terrorism, economic down turns and labor disputes are just a few.  This assumes that you have already navigated the byzantine system required to obtain certification.

If by some chance you have a few million dollars in your pocket and you want to try and start an airline here are a few point s to consider.

1. The FAA and DOT will require economic fitness.  That means you're gonna need alot of cash up front, preferably someone else's.
2. You will be entering one of the most heavily regulated industries that exists.
3. Virtually every employee will require very expensive training.
4. You will have (amongst others) the following fixed expenses: leases on aircraft, gates and offices, insurance, payroll and benefits.
5. You will have as a minimum the following variable expenses: Fuel, landing fees, overtime, maintenance and reservations fees.
6. You will have one source of income; fares.

It takes exactly one empty flight to wipe out the profits from three full flights. The government is there to enforce rules, not concern themselves with your problems. The employees expect to be paid promptly as do the vendors and lessors.

It is possible to lose money on full flights.  If fuel goes up a nickle a gallon that is $50 a flight hour which equals $500 a day or $15,000 per month per plane for a 737-200.

If you do start an airline here is some advice:

1. Use as much of other people's money as you can (OPM).
2. However much you think you will need, triple it.
3. DO NOT try to save money by partnering with a lawyer, accountant, mechanic or pilot in return for 'free' services.  Hire them and pay the proper rate.
4. Be courteous to the FAA but not nice.
5. If things get tight, make payroll first
6. If a market does not pan out, drop it
7. ADVERTISE, unlike you the rest of the world does not hang out at the airport and has no idea who your airline is or where it goes.
8. Two things fuel this industry, ego and money.  Make sure you have plenty of money.
9. A cancellation costs the fraction of a violation or an accident. Don't push it.

Many airlines have started with various degrees of success but just to give you a little perspective go ahead and check out this Youtube video.
http://www.youtube.com/watch?v=I97bsp7pzz8

Good luck!