Part 135 research - a few questions

Taft

Taft

Filing Flight Plan
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Taft
Hi all,

I’ve spent a few weeks trying to learn more about the Part 135 world (mostly Google), but I’m finding it hard. I have tons of questions but hoping people will fill me in on some basics.

For context, I’m working on my commercial and am thinking about what comes next. I worked for a startup that sold and am considering selling the company I started after that. I have a bit of capital and access to a network of investors, so I’m deciding what to start next.

I’m aware of the hurdles - it can be an expensive and very slow process. As for the market, I live in Austin and it seems to be a booming aviation market.
  • A fellow pilot (contract jet FO) told me that he hasn’t seen a pilot owner have success starting a charter business. He said that the only real path to success is leasing someone else’s airplane because charter doesn’t cover the costs of ownership. You have you count on rich people who are ok with only offsetting a part of their costs. Does this sound accurate?
  • Is there a marker for charter companies with piston or small turboprop aircraft (Mirage or Meridian, for example)? The high end operations are noticeable with their big sexy jets, but I wonder how many other successful operations there are.
  • Does anyone with experience starting or working in a small 135 business have advice for someone starting to research?
Thanks for any guidance or info!
 
Not sure what size and scope company you have in mind.
If you don't have a plane, this is the first term you'll need to know. To start a 135 company, you'll need exclusive use of an aircraft.

The FAA defines “exclusive use" for purposes of § 135.25(c) by stating a person has exclusive of use of an aircraft when that person “has the sole possession, control, and use of it for flight, as owner, or has a written agreement ... in effect when the aircraft is operated, giving the person that possession, control and use for at least 6 consecutive months.

So you'll need someone to hand over use of their aircraft to you with a contract well before the FAA issues an ATCO certificate. And while you have that airplane, you may need to spend a lot of money maintenance wise to get it up to spec. For example, all those pesky service bulletins become mandatory. And the plane will likely have to be weighed - the existing weight won't be accepted, lol. I'm sure the owner is going to want some revenue for using his plane so you'll need to pay while that plane sits around and collects dust. This is where paying a commercial 135 start-up service starts to make sense. Instead of floundering ~2 yrs drowning in FAA paperwork, a pro company can get a certificate set up in < 1 yr. I've seen some do it in 6-7 months but right now, count on ~1 yr or ~2 yrs doing it on your own.

Turbine anything will be a lot to bite off. Back to question 1, what is the planned size and scope of this operation? Might want to start off with a 182 or something.
 
The work needed to start a 135 is long expensive headache. You might try to find a company selling an existing 135 certification.
 
Taft said:
any guidance or info!
Click to expand...
Start with looking through the FAA Advisory Circulars (AC) for Part 135. These will give basic knowledge. Then check FAR Part 119 as this is where you get your operations certificate. There are also ACs for this Part. Then decide what you want to do. In my experience small one pilot/basic ops success is based on owners 135 experience. So the ones that survived had a lot of prior experience.

One of the betters routes to take is work for a small 135 operator first for several years then ask yourself this question. If you want trial by fire work 135 in Alaska for a couple summers. While this is doable the cards are stacked against you on several levels. But definitely worth looking into if its something that interests you.
 
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I started a 135 charter company.
1. Found customer who guaranteed 40 hrs/month
2. Found rich guy to buy King Air
3. wrote 135 manual from scratch/ before word processors/printers'

4. Today the paperwork is MUCH more difficult. Your chief pilot will mostly do paperwork and not have time to fly.
 
Taft said:
Hi all,

I’ve spent a few weeks trying to learn more about the Part 135 world (mostly Google), but I’m finding it hard. I have tons of questions but hoping people will fill me in on some basics.

For context, I’m working on my commercial and am thinking about what comes next. I worked for a startup that sold and am considering selling the company I started after that. I have a bit of capital and access to a network of investors, so I’m deciding what to start next.

I’m aware of the hurdles - it can be an expensive and very slow process. As for the market, I live in Austin and it seems to be a booming aviation market.
  • A fellow pilot (contract jet FO) told me that he hasn’t seen a pilot owner have success starting a charter business. He said that the only real path to success is leasing someone else’s airplane because charter doesn’t cover the costs of ownership. You have you count on rich people who are ok with only offsetting a part of their costs. Does this sound accurate?
  • Is there a marker for charter companies with piston or small turboprop aircraft (Mirage or Meridian, for example)? The high end operations are noticeable with their big sexy jets, but I wonder how many other successful operations there are.
  • Does anyone with experience starting or working in a small 135 business have advice for someone starting to research?
Thanks for any guidance or info!
Click to expand...

I've worked for 4 Part 135 operators. 2 are gone, one is as good as dead and 1 is still going strong and profitable. It's profitable due to the owner(s) having other income sources and being able to plow some percentage of the profits back into the company. They also have freight contracts which help cover costs when there are empty seats. The profitable company runs turboprops, no jets. Not all flights are profitable. Some have few pax and no or very little freight. So those are losers. But they are baked into the overall price structure. Company is financially sound and mx is top notch.

It's been my observation that revenue is usually over estimated and operational costs, especially mx costs, are waaaaay underestimated in the 135 world. Hence, the number of failed 135s.


Bell206 said:
In my experience small one pilot/basic ops success is based on owners 135 experience. So the ones that survived had a lot of prior experience. One of the betters routes to take is work for a small 135 operator first for several years then ask yourself this question. If you want trial by fire work 135 in Alaska for a couple summers.
Click to expand...

This was my path. Alaska part 135. The successful company I mentioned above is in Alaska. The owners all had prior Part 135 experience in both the left seat and operational control.
 
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Fractional ownership decreased the number of Part 135 operations, but there are still some opportunities with turboprop aircraft in the right geographic areas.
 
Htaylor said:
… and 1 is still going strong and profitable. It's profitable due to the owner(s) having other income sources and being able to plow some percentage of the profits back into the company.
Click to expand...
This points to one of the problems getting into the 135 business. There are operators out there who do it as a hobby or as a way to not have their corporate airplanes cost quite so much, and don’t actually charge what it costs to operate the airplanes. There are operators for whom the 135 certificate is the part of their company that never makes money, but it helps support the shop, fuel sales, hangar, etc.

That makes it tough when you’re trying to price so that your airplanes make money because they have to.
 
martym said:
Not sure what size and scope company you have in mind.
If you don't have a plane, this is the first term you'll need to know. To start a 135 company, you'll need exclusive use of an aircraft.
...Back to question 1, what is the planned size and scope of this operation? Might want to start off with a 182 or something.
Click to expand...

Good call outs! I own an SR22, but am already thinking of upgrading for our personal use. It's a bit cramped and we travel far enough regularly (CA and GA from Austin) that it's a bit slow for us. Thinking about the next airplane is part of what got me on this path. As for size and scope, the path I'm imagining is Single-Pilot 135, assuming there's a path to 135 Basic if I decide to grow.

texasclouds said:
Are you wanting to operate a business or are you just wanting to fly planes?
Click to expand...

Yes. I would like to find a way to do both. I fly planes now, but think I'd like to find a way to turn it into a business.

From what I'm hearing, it sounds like taking some time and working for an existing 135 operation is a good starting point...
 
Taft said:
the path I'm imagining is Single-Pilot 135, assuming there's a path to 135 Basic if I decide to grow.
Click to expand...
Not directly. But if that is something you wish to pursue in the future make it a discussion point in your Pre-application Phase as you might be able to develop some of the Basic requirements while pursuing the you Single Pilot certification. Perhaps find a consultant who specializes in the 135 ops side, pay him for a couple hours of his time, and get the latest options to pursue. I don't consider the Part 135 application process as a learning experience. Its best to do your homework up front and treat the application process as the final stretch of an Olympic event for gold.
 
Bell206 said:
Not directly. But if that is something you wish to pursue in the future make it a discussion point in your Pre-application Phase as you might be able to develop some of the Basic requirements while pursuing the you Single Pilot certification. Perhaps find a consultant who specializes in the 135 ops side, pay him for a couple hours of his time, and get the latest options to pursue. I don't consider the Part 135 application process as a learning experience. Its best to do your homework up front and treat the application process as the final stretch of an Olympic event for gold.
Click to expand...

That makes sense. I've done lots of reading, but the main thing I've learned is that I'll need help from someone who knows the business. My whole business is helping people who don't understand the nuances of my business survive in it...so won't take much convincing for me to pay someone for their knowledge!
 
Taft said:
the path I'm imagining is Single-Pilot 135, assuming there's a path to 135 Basic if I decide to grow.
Click to expand...
Flying a plane for an operator is not going to teach you much about setting up or running a 135 business. You'd do just as well to jump in. Modifying an existing certificate is always easier than initial startup.
 
TommyG said:
The work needed to start a 135 is long expensive headache. You might try to find a company selling an existing 135 certification.
Click to expand...
You cannot buy a certificate. You can buy the business entity that holds the certificate, I.e. LLC, C corp, etc; but you cannot buy a certificate. The entity that holds the certificate must survive the sale intact.
 
If you want to start a 135 to make money, I would suggest you put your money in a mutual fund instead. If you want to start one as a hobby, have at it.

I think the success rate of a start up 135 is about the same as start up restaurant.
 
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