4 ms·

> people need to get from place to place, and it’s very hard to build and run an airline. Why is it hard? Seems like the dumbest possible business. I mean I th

> people need to get from place to place, and it’s very hard to build and run an airline. Why is it hard? Seems like the dumbest possible business. I mean I think a restaurant would be harder. There's more subtle unknowns in food than there is in carrying people from A to B. Educate me because I don't get it.

longcommonname 7y ago
If your plane isn't full enough you lose money. You want to be able to predict when to cancel flights early enough you don't have to refund too many customers without wasting money on empty routes. You also need to manage how much you're overbooked to allow for full flights when people miss their flights or cancel at the last minute. You also need customer support for all sorts of actions. These are just a few of the many hard problems they face.
aidanlister 7y ago
Because an A380 costs $432 million and you need a bunch of them to run an airline, where as a restaurant fit out is ~$1M. You also need to maintain those planes, employ staff across multiple countries and timezones, and comply with insane amounts of legislation for every country you fly into. Are you seriously comparing that to ... serving food?
- Legogris 7y ago
  Not to mention that on top of everything else, airlines also serve food.
  - mschuster91 7y ago
    That's easy, contract Lufthansa LSG or Gategroup or one of the smaller (local) competitors.
    - deleted 7y ago
      [deleted]
- mschuster91 7y ago
  You can lease airplanes, even with entire crews from pilots to stewardesses ("wet lease"). Legal compliance can be outsourced to dedicated law offices, local staff by local staff lease companies. The biggest two issues when founding an airline are getting your hands on some money and finding a profitable set of routes. For what it's worth, it's possible to do this as a former formula1 racer (Niki Lauda / Lauda Air).
  - Legogris 7y ago
    I'm curious; how much experience do you have in founding, managing or running an airline? You speak as if you have first-hand knowledge.
    - redis_mlc 7y ago
      Most of the US "union-busting regional airlines" are as simple to start as described, since a major arranges the financing and marketing/ticket sales. Well, they existed until the "1,500 hour rule", and most ran out of pilots and are gone by now. Or a one-plane vacation charter. It becomes much more complicated as the number of bases and planes multiply. And if you get sloppy or unlucky, one or two crashes is enough to end even national carriers like Malaysia Airlines, regardless of who is at fault. There are clever airline founders who serially start multiple successful airlines, so there is some mgmt. talent involved. Source: commercially-rated airplane pilot.
    - droithomme 7y ago
      mschuster91 is so busy running his airline he doesn't have time to answer pesky questons!
BurningFrog 7y ago
Aside from other relevant critique, I must point out that running a restaurant is quite hard, and most of them fail.
- exclusiv 7y ago
  I'd say that running a successful business in general is hard. But with restaurants specifically, I'm convinced that it's touted as really hard because they're run by people that aren't that savvy. You have people who are like, "I can cook". Just like people say "I can code". That doesn't make you an entrepreneur. Yet food service attracts a lot of wannabes and they sap up a lot of small biz funding. What's amazing to me though, is restaurants have found a way to offload the bulk of their wages (via tips) and they still have an astounding rate of failure. Be known for something. Keep your menu tight. Know your costs. And take care of your employees and customers and you'll get repeat business. I have no sympathy for restaurants because of their sweetheart wage deal. They made their own bed and they don't even realize it. Eating out is a luxury and we'd be better off with way less of them but higher quality.
paranoidrobot 7y ago
Massive capital requirements. Which you can mitigate by leasing, but this increases your cost. Massive unit operating costs, where the cost difference between it flying and sitting on the ground is not that different (for a commercial aircraft that's still in flyable condition, it needs to keep being maintained constantly) Large numbers of staff - pilots, cabin crew, gate staff, baggage/cargo loaders, tug operators, ground crew, refuelling, operations (scheduling, route planning), customer service, maintenance crew, etc. Some of those can be outsourced, depending on the airport. Some of those (like flight crew) have mandated maximum operating hours. You need to have hotel rooms, meal allowances, and transport to/from the airport for flight crew when they're off-duty at an airport that isn't home-base. Dealing with someone who calls in sick means you need stand-by crew ready to go in all the locations that you fly out of (or be prepared to fly replacement crew into those locations - and thus potentially sacrifice a seat that could've gone to a paying customer) All these operating costs and we've not even sold a single seat. Depending on the airline, they might not be breaking even until the flight is nearly 70% full.
- NikolaeVarius 7y ago
  As of about 3 years ago, with a flight ticket that costs roughly 700 dollars (close to average), an airline made 3 dollars of profit per seat. Source: Worked at a travel company Airline companies operate at the edge.
freepor 7y ago
Poe’s Law strikes again

longcommonname 7y ago

If your plane isn't full enough you lose money. You want to be able to predict when to cancel flights early enough you don't have to refund too many customers without wasting money on empty routes. You also need to manage how much you're overbooked to allow for full flights when people miss their flights or cancel at the last minute. You also need customer support for all sorts of actions. These are just a few of the many hard problems they face.

aidanlister 7y ago

Because an A380 costs $432 million and you need a bunch of them to run an airline, where as a restaurant fit out is ~$1M. You also need to maintain those planes, employ staff across multiple countries and timezones, and comply with insane amounts of legislation for every country you fly into. Are you seriously comparing that to ... serving food?

Legogris 7y ago
Not to mention that on top of everything else, airlines also serve food.
- mschuster91 7y ago
  That's easy, contract Lufthansa LSG or Gategroup or one of the smaller (local) competitors.
  - deleted 7y ago
    [deleted]
mschuster91 7y ago
You can lease airplanes, even with entire crews from pilots to stewardesses ("wet lease"). Legal compliance can be outsourced to dedicated law offices, local staff by local staff lease companies. The biggest two issues when founding an airline are getting your hands on some money and finding a profitable set of routes. For what it's worth, it's possible to do this as a former formula1 racer (Niki Lauda / Lauda Air).
- Legogris 7y ago
  I'm curious; how much experience do you have in founding, managing or running an airline? You speak as if you have first-hand knowledge.
  - redis_mlc 7y ago
    Most of the US "union-busting regional airlines" are as simple to start as described, since a major arranges the financing and marketing/ticket sales. Well, they existed until the "1,500 hour rule", and most ran out of pilots and are gone by now. Or a one-plane vacation charter. It becomes much more complicated as the number of bases and planes multiply. And if you get sloppy or unlucky, one or two crashes is enough to end even national carriers like Malaysia Airlines, regardless of who is at fault. There are clever airline founders who serially start multiple successful airlines, so there is some mgmt. talent involved. Source: commercially-rated airplane pilot.
  - droithomme 7y ago
    mschuster91 is so busy running his airline he doesn't have time to answer pesky questons!

BurningFrog 7y ago

Aside from other relevant critique, I must point out that running a restaurant is quite hard, and most of them fail.

exclusiv 7y ago
I'd say that running a successful business in general is hard. But with restaurants specifically, I'm convinced that it's touted as really hard because they're run by people that aren't that savvy. You have people who are like, "I can cook". Just like people say "I can code". That doesn't make you an entrepreneur. Yet food service attracts a lot of wannabes and they sap up a lot of small biz funding. What's amazing to me though, is restaurants have found a way to offload the bulk of their wages (via tips) and they still have an astounding rate of failure. Be known for something. Keep your menu tight. Know your costs. And take care of your employees and customers and you'll get repeat business. I have no sympathy for restaurants because of their sweetheart wage deal. They made their own bed and they don't even realize it. Eating out is a luxury and we'd be better off with way less of them but higher quality.

paranoidrobot 7y ago

Massive capital requirements. Which you can mitigate by leasing, but this increases your cost. Massive unit operating costs, where the cost difference between it flying and sitting on the ground is not that different (for a commercial aircraft that's still in flyable condition, it needs to keep being maintained constantly) Large numbers of staff - pilots, cabin crew, gate staff, baggage/cargo loaders, tug operators, ground crew, refuelling, operations (scheduling, route planning), customer service, maintenance crew, etc. Some of those can be outsourced, depending on the airport. Some of those (like flight crew) have mandated maximum operating hours. You need to have hotel rooms, meal allowances, and transport to/from the airport for flight crew when they're off-duty at an airport that isn't home-base. Dealing with someone who calls in sick means you need stand-by crew ready to go in all the locations that you fly out of (or be prepared to fly replacement crew into those locations - and thus potentially sacrifice a seat that could've gone to a paying customer) All these operating costs and we've not even sold a single seat. Depending on the airline, they might not be breaking even until the flight is nearly 70% full.

NikolaeVarius 7y ago
As of about 3 years ago, with a flight ticket that costs roughly 700 dollars (close to average), an airline made 3 dollars of profit per seat. Source: Worked at a travel company Airline companies operate at the edge.

freepor 7y ago

Poe’s Law strikes again