Future growth in freight?

bucksmith

Did you lock the doors?
#1
Very general question, a friend of mine is contemplating starting a freight business. Wondering what the boots on the ground think about room in the industry for another company, considering the slow death of brick and mortar and the continuing surge of package delivery.
To avoid answers to questions I'm not asking, let's assume he has the necessary resources, capital, certificate and some turbo props.
Other than "don't do it", what advice would you give someone based on your experience, watching poor companies fail and good companies succeed in the industy?
(We're talking lower 48 and Latin America)
 

av8tr1

"Never tell me the odds!"
#3
Well there are apparently about to be a bunch of Chieftains on the market, slightly used by an old grandmother to get to church on Sundays.......

Getting the work is going to be pretty straight forward. Both Fedex and UPS are outsourcing feeder routes due to the pilot shortage. Most contracts are month to month though. So if you have the equipment and pilots I'd say you are in pretty good shape.

However the hardest thing you are going to find is getting FAA approval. If you already have a certificate you may already be WAY ahead of the game.
 

deadstick

Well-Known Member
#5
One plane/one run to a hub...possibly on a single pilot certificate. I have no idea if he’d get awarded the contract with that and the economies of scale would be against your friend. Paying retail for maintenance can turn black to red. Even flight schools, to be successful, need in-house FUEL, maintenance, at the same time be able to sell those things to the transient.

One thing could be an investor who could use the tax deduction, although I have no idea how passive activity/hobby plays in 2018. It use to be the aircraft owners took the MACRS depreciation as part of their bottom line. They could afford not to break even every month because they get something back in April.
 

Box hauler

Well-Known Member
#8
With rising costs and lack of pilots it's going to be interesting to see what happens to this industry in the next few years. I don't feel bad for the bottom feeders who will disappear because they can no longer make a profit on the slave wages of pilots as they once did but I do think it's sad that many sectors of this industry might be gone almost entirely in the coming years.
 

av8tr1

"Never tell me the odds!"
#9
With rising costs and lack of pilots it's going to be interesting to see what happens to this industry in the next few years. I don't feel bad for the bottom feeders who will disappear because they can no longer make a profit on the slave wages of pilots as they once did but I do think it's sad that many sectors of this industry might be gone almost entirely in the coming years.
Word is we had 5-6 turn in their notice last week just on the 135 side. Not sure when that is going to happen just that they turned in their notice. I think we only have 55 pilots so this is going to hurt. Rumor is they are quitting because we didn't get the promised raise (1st reported back in Nov/Dec) so the are going to better places.

I find myself repeating far too often that "the stupid it burns" on a regular occasion these days. Still love my job but some days I have to shake my head at some decisions out of the corporate office.
 

bucksmith

Did you lock the doors?
#10
With rising costs and lack of pilots it's going to be interesting to see what happens to this industry in the next few years. I don't feel bad for the bottom feeders who will disappear because they can no longer make a profit on the slave wages of pilots as they once did but I do think it's sad that many sectors of this industry might be gone almost entirely in the coming years.
If not an airline or box hauler, maybe a ultra high net worth (UHNW) individual is the answer. I didn't even know that was a term until recently. maybe landing that gig is the answer to all these worries about closing shops and pilotless airplanes.
 

z987k

Well-Known Member
#11
With rising costs and lack of pilots it's going to be interesting to see what happens to this industry in the next few years. I don't feel bad for the bottom feeders who will disappear because they can no longer make a profit on the slave wages of pilots as they once did but I do think it's sad that many sectors of this industry might be gone almost entirely in the coming years.
The funny thing is, if the only money the company was making was the difference between 2008-10 wages and today, then they were a failed business. The feeder I worked for payed me like 34k, now they pay that same guy something like 60k. If 26k was the profit for the whole year on that route, then they're fing idiots. Couple million in capitol to make that route go (engines, fuel, mx items), and a 26k return. A savings account has a better return.
So I don't believe the pilots salary ever mattered. They're just greedy fs that are now getting what they deserve. Every time I see one of those places fail, I smile and hope the owner is truly bankrupt.
 

av8tr1

"Never tell me the odds!"
#12
The funny thing is, if the only money the company was making was the difference between 2008-10 wages and today, then they were a failed business. The feeder I worked for payed me like 34k, now they pay that same guy something like 60k. If 26k was the profit for the whole year on that route, then they're fing idiots. Couple million in capitol to make that route go (engines, fuel, mx items), and a 26k return. A savings account has a better return.
So I don't believe the pilots salary ever mattered. They're just greedy fs that are now getting what they deserve. Every time I see one of those places fail, I smile and hope the owner is truly bankrupt.

Well technically I was one of those owners. I was tired of getting jerked around and tried to start my own airline. Would you say that about me? (ok don't answer that....) but seriously not every airline owner is out to screw the pilots. Some of them just wanted to work at a place where they mattered. When they couldn't find one they went and built their own.
 

z987k

Well-Known Member
#13
Well technically I was one of those owners. I was tired of getting jerked around and tried to start my own airline. Would you say that about me? (ok don't answer that....) but seriously not every airline owner is out to screw the pilots. Some of them just wanted to work at a place where they mattered. When they couldn't find one they went and built their own.
I'm aware a bunch of the mom and pops barely make a dollar. Which is why people almost universally say don't do it.
I'm more talking about the larger places. Lakes, AMF and every regional come to mind.
 

ppragman

Direct Yeska
#14
Well technically I was one of those owners. I was tired of getting jerked around and tried to start my own airline. Would you say that about me? (ok don't answer that....) but seriously not every airline owner is out to screw the pilots. Some of them just wanted to work at a place where they mattered. When they couldn't find one they went and built their own.
You also tried to jump into literally the most regulation-intense part of 135 with limited experience and connections in a market I could have told you "wouldn't work" (tm) with an airplane that's too capital intensive to start out with.

You don't make money doing passenger 135 in the lower 48 unless you're doing charter in faster, turbine powered equipment, and then it's insanely capital intensive. Making money doing scheduled 135 in the lower 48 is nigh-on impossible without an established history and EAS. Coming in as a newcomer to that world just ain't gonna work without the ability to lose money for a year or two and provide an wayyyy better product than the airlines or driving.

Now if you want to make money flying freight, you can do that pretty much anywhere, but you have to be a bit of a gambler if you wanna work "the boards" or you have to be reliable if you want to snake UPS routes. Smarter money is on finding locations where "normal" transportation is impossible, and cutting into the market there. Island communities, places without road-service, etc.
 
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