US Boeing 747 Startup Airline Receives Fifth DOT Rejection
The United States Department of Transportation (DOT) has rejected Avatar Airlines’ application for an Air Operator’s Certificate on…
The United States Department of Transportation (DOT) has rejected Avatar Airlines’ application for an Air Operator’s Certificate on April 28th for the fifth time. In the order for the dismissal, the DOT highlighted deficiencies in the application leading to the AOC rejection.
The DOT rejects Avatar Airlines’ application….again
According to a report in ch-aviation, this is the fifth time that the DOT has dismissed the airline’s application. Avatar Airlines, Inc. filed an application for an air operator’s certificate (AOC) in November of 2019. An AOC allows an airline to fly commercially. Avatar Airlines wanted to fly people and freight across the United States by resurrecting the Queen of the Skies.
There are three criteria that the DOT weighs in granting an AOC:
- Does the applicant have the managerial skills and technical ability to conduct the proposed operations?
- Will the applicant have sufficient financial resources to commence operations without posing an undue risk to consumers?
- Will the applicant comply with the Transportation Code and regulations from Federal and State agencies?
In the DOT’s order dismissing the application, the reviewers found deficiencies in each of these criteria. Specifically, however, the DOT highlighted funding issues stating:
Avatar’s application did not include evidence of any existing funding available to the company or evidence that the company raised capital from a $300 million private placement, which reportedly concluded on January 16, 2020.
Avatar Airlines has a unique business plan. It wants to operate Boeing 747 aircraft on routes across the United States. By utilizing 581-seat Boeing 747s, the airline expects to have a cost per seat mile of approximately six cents ($0.06). This will allow the airline to offer low fares. It projects if a passenger purchases a seat 30 days in advance of a flight, that a one-way ticket from Miami to JFK would cost $49, and to fly from Los Angeles to New York, it will cost $79 under the same parameters.
The airline has an ambitious three-year expansion plan that sees it flying commercial routes on busy routes. After three years, the airline plans to go public to raise funds to purchase 30 new Boeing 747-8 aircraft.
In year one, the airline wants to fly transcontinental routes from New York City to Las Vegas and Los Angeles, Chicago to Las Vegas, Los Angeles to Las Vegas, Los Angeles to San Jose and San Francisco, and from Honolulu to San Diego, San Francisco, and Los Angeles among others. By year two, the airline wants to expand operations to Newark with flights to Ontario- a secondary airport in the LA-area before going international with flights to Mexico City and Cancun. In year three, the airline would also fly from New York to Boston.
On all of these routes, Avatar Airlines wants to fly iconic Boeing 747 aircraft. Onboard, passengers will have free seat selection, free wifi, and no baggage fees.
Avatar Airlines brands itself as being the airline that can offer the same capacity as multiple-daily narrowbody aircraft. You can learn a little more about Avatar Airlines below at our Youtube video on the startup:
Will this work?
The airline industry has seen its share of exciting startup ideas. Some have lasted until this day, while others not so much. Avatar Airlines will take time to start up as they don’t have an AOC yet nor any aircraft ready to fly.
The airline plans to make money unconventionally through transporting cargo and advertising on tray tables, overhead bins, exterior aircraft wrapping, bulkheads, video loops, and “much more” per a video the airline released.
This would undoubtedly, be a significant departure from its competitors. Especially considering what the airline is up against. Based on its business plans, the airline does not plan on operating a major hub-and-spoke model like other airlines. This limits connecting feed, which could severely hamper filling up a Boeing 747.
In addition, these routes are heavily competitive. Several of these routes, especially between New York and Los Angeles, see widebody service already. Plus, some of these airports are expensive to operate in. This is why most low-cost carriers prefer flying to secondary airports where possible.
What comes next?
The DOT left open options for Avatar Airlines to apply again. However, the applicants will need to provide third-party certification about its financing plans. It is unclear, however, when Avatar Airlines would be able to complete this step. Currently, the aviation environment is in a bit of a mess, and there may not be enough demand to launch a new, ambitious airline like this.
While Avatar Airlines did request government aid, it likely will not receive it, especially without an air operator’s certificate. But, online, the airline is still accepting applications for several positions, including pilots (with starting pay for Captains at $275,000 and First Officers for $200,000) and some executive roles.
Do you think Avatar Airlines will get off the ground? Let us know in the comments!