i am still curious as to why, in this day and age of extortionat petroleum price increases, anyone would choose to start an airline. maybe that answer could be that they intend to offset the losses it will indubitably incur by tourism revenues. just consider some of the expenses, for starters: airbus 380 monthly rental; 702, 000usd. annual c-check maintenance routine: 7 million usd (conservatively) add salaries, landing fees, fuel, and all the ancilliary expenses, and one can understand why only an infinitesimal portion of airlines in the world are making a profit. maybe these guys know something mere mortals do not!

Dreadlocks: Because "Dominican Republic" is going forwards and any country that wants to
be a "developed country" must have a plain and simple service as a national airline.

Most likely They have private investors involved too, This is progress for my country and I'm sorry
if You don't like.

ouch

Rubirosa, why don't you point to me the passage in any textbook that says that to be considered a developing country, a country must have an airline? is it the same paragraph which advocates a METRO? i can see where this is headed.you are arguing emotionally, without any understanding of topics. if anyone disagrees, it is personal. maybe you should consider lending a little of your positive vision and optimism regarding airlines to the numerous air carriers who are in Chapter 11 bankruptcy proceedings in america. i took a look at the state of aviation in the caribbean and latin america, and the airlines are all flagging. maybe you could make a call to the principals at regional carrier, say air jamaica, which is 100 million dollars in debt. you can probably say" chin up. be positive. you are losing because people do not like you!!

the paper is so complicated with incentives from many companies and countries you would not believe it.....besides everybody has same costs....and whats wrong with competition unless your in Cuba

so what ....the Concord lost money on every flight it ever made....I have been in Caribbean long enough to see them come and go and stay so what is your point ..we should not have it....or possibly there is no need to lower prices with competition....good thing jet blue did not listen to you....Air jamaica ? dont start me up rasta man....textbook? those who do and those who teach

where is Texas billy when we need him?

i defer to your potent understanding of economics, Goulet. as an aside, jet blue is able to enter these markets precisely because of the failure of regional airlines. and Goulet, i assued posters that i would attempt to keep the discourse civil, but if you persist in being childish and rude, then i cannot guarantee withholding my rage at you. so, mountainannie, the gloves could be off: i do not suffer bullies gladly

dredy touchy touchy....please dont start insulting me again...I am very fragile

Dred: The reason anyone would start a viable business is profit. The Dominican market is one of the best in the airline industry. Some of the highest ticket prices,tariffs is one fat juicy market.Jet BLue sucess is also due in part to its hedging of fuel purchases.

GOULET, i do not mind your infantile attemps at humor, because all the readers know by now that you are demented. i would ask you , however, to stay away from any racial or religious namecalling. i am not amused by your 'RASTA MAN" apellation. i have enough good manners, civility and upbringing than to introduce race , religion and ethnicity into any of my posts. then again, my parents did a good job raising me with a worthwhile set of values and standards. as to JeffryB, i have no idea what you mean when you use the term 'VIABLE BUSINESS. if the airline business is so viable, answer for me the following
1) why is it that the economist A.M. Pilaski has written a book titled" why we cannot make money in avaiation"
2)why economist David Pauley describes avaiation as the "dumbest industry ever". for 58 years, us airlines have run up cumulative debts of 14 billion, the all time industry loser.
3)why in the last 20 years, many with 30 dollar per gallon petroleum prices, have

no less than 73 airlines failed in australia alone
4)why low ,competition driven prices is expected to work.there is already between 20-30% excess carrying capacity in avaiation. the only low fare carrier to survive the long run is southwest. jet blue is doing well now, but remember, it is still a relative upstart.

Why do people go to casinos? this combined with hard work and capital lead to win or lose economic situations.....or those 73 guys that started those airlines weren't as intelligent as you dredy...it is called capitalism and it is real dumb ...but there is nothing else around to replace it

forgive me if i fail to see the nexus between going to a casino and starting an airline. hard work and capital leads to win or lose economic situations: that is a tautology. however, the simple remaining question is: given the known quantities of recurrent failure, even in the best of circumstances, overcapacity, lease and maintenance costs, and escalating fuel prices, why would anyone consider it a good idea. and if you agree that it is, you can look up the e-mail addresses of David Pauly and AM Pilaski, and give them your intellectual take. i shall be glad to read excerpts, especially the ones dealing with the comparison between airlines and casinos. all the major players who have failed, such as Braniff, eastern, pan am, fronteir, midway, australian ,to name a few, had been given new life by massive injections of cash, but still they flopped. hey, maybe we just know something that they don't ( DIDN'T WE TRY THIS BEFORE?)

Dread: I probably cannot produce such text book quality arguments to substantiate mine, but let's assume that yes, indeed the aviation industry is or has been an economic pit hole; how much bigger a pit hole or how much larger would the implications have been had the aviation industry never existed or worse yet, cease to exist?

Can you imagine the concept of globalization without the ability to simply travel to another country and conduct business, sign trade agreements, sign peace treaties, conduct political agenda, etc..?

I must advise you that there indeed are countries you cannot get to in an acceptable period of time unless you fly there...

risk your investment for a big reward....................get it...To marxists this makes no sense I know

Biz, thank you for overrating my abilities. i agree with everything you say. of course we need civil avation. of course travel is compromised without it. my only premise is that this is not a good time for a startup venture, given the cost of petroleum, and the general world economic turmoil. 40 years ago, maybe, but today,no. we have more than enough carriers in the skies to adequately address our needs. we do not need to be saddled with such a risky venture at this juncture in history. as an aside, can you tell me of some of these countries which are accessible only by air?

i see where you edited your post to include the concept of reasonble period of time. as such ,i withdraw my question about countries onl accessible by air.

People immigrated mostly to New York in the 19th century because that's where the main port was located... It was no accident that New York became a great city...

So if DR wants more tourist... It needs a port and the ships to take them there... and in our present time... That means an AIRLINE...

ANOTHER GREAT STEP FORWARD

Carlos, we already have airlines that come here. we do not need an airline of our own. i am arguing it from an economic standpoint, some from the standpoint of bragging rights. i have exhausted my input on this subject. if you think that a startup airline is a good idea in today's world economic environment, when others are scrambling to get out of the airline business, knock yourself out! it would be nice to have a Starbucks in Nagua too, because we could call it progress.! think that is going to happen soon? why not?

A failed nation needs an airline. One good thing, the planes were not made here.

bragging rights I dont think so.....air jamaica is in the weeds because of poor mgmt and shrinking tourism..that does not have to be the case with AIR DOMINICANA a famous name in caribbean aviation....and probably a pretty cagey investment....look up who the stockholders are dred and let us know who these lame brain stupid idiots who want to burn their money are....that would be a good place to start for you...who are these idiots who own 60 % of dreds white elephant

you select air jamaica as a failure, but what about all the other carriers that went bust? why did Braniff go under? ALM is 260 million in debt. by the way, for all those who might be oblivious to one thing, let me give you 3 words: CLASS ACTION LAWSUIT!! ponder, if you will, the consequences of an air dominicana airliner falling into the everglades with 140 college students going home from spring break. try to remember that some of the recent wrongful death lawsuits in the usa include the 20 million awarded to the wife of one of the victims of the crash of the plane owned by Hendrick Motorsports. also, the 26 million to the survivors of a cessna which crashed in New England. every time a new airline starts up, these trial lawyers salivate. who in his right mind wants to expose himself to one of these episodes?

Goulet, you should check your 'FACTS ' before you commit your opinions to print. i just read in an article on the internet that the island of jamaica broke the 3 million visitor threshold in 2006, and the trajectory for arrivals is upward. that does not seem to jive with your post that air jamaica failed because of DECLINING TOURISM. care to have another shot?

Recent posted article that is somewhat relevant to what is being discussed here..
http://money.aol.com/news/article....nger-service/20080330211709990001

Dreadlocks: You need to read more economics, business and statistics #s before posting your biased, non sense comments.

Why AA is so profitable on all routes to Dominican Republic, you name (Santiago, Santo Domingo, Samana, Punta Cana and Puerto Plata).

Now You going to tell me that AA is losing revenue on these Dominican markets "Mr know
everything.

AA used to have a monopoly many years ago and didn't want to allow anybody else to fly
to Dominican Republic.

Your sensitivity and bad karma business is coming from the fact that maybe You don't see this
type of investment on the other side of the "hmm" ???

what, Mr KNOWNOTHING, does american airlines have to do with anything? are you going to equate american airlines with a startup ? it is precisely because i understand economics why i do not consider it a wise investment. do you have any concept of the assets which american airlines has to fall back on if they are going through lean times? do you understand the extent to which they can receive bridge financing? you cannot equate the losses of Burger King with a pica pollo. you cannot equate the operating costs of american airlines with a local carrier. the reason for this is economies of scale. their per-plane expenditure is less than ours, because their fleet is larger. they can charge lower fares than us and make a profit or break even. before you start trying to be unnecessarily rude, do some reading first. you might not agree with what i say, but suggesting i go read economics textbooks does not help the discourse. i would venture a guess that i know more about the subject than you!

further, Rubirosa, the loss of revenue of one grounded plane for a few days can blow the whole quarterly balance sheet right out the water, if you only are operating with 3 or 4 aircraft. american has so many aircraft it can press into heavy volume corridors that the effects are not the same. if a problem is found in a make and batch of aircraft, for instance an md80, once that thing hits US airspace the FAA can ground it till the problem is fixed! this is not like buying a motoconcho: the considerations are gigantic. if it was so easy, they wouldn't all be falling like flies!! what do you think? the guys here are smarter than the guys who ran Braniff?

This airline will be heavily subsidized, "Drug Transportation", but someone forgot the US$50,000 fine at the other end. !!!

perception, try to keep the discourse civil. making remarks such as those does not promote harmony on this forum.

Dreadlocks: at least They deserve the benefit of the doubt since They haven't even start flying yet, airline business is a "Tough" business.

I'm being in the business for 15 years so is a "up and down" curve , my point is that Dominican Republic is moving forwards and We need to credit the goverment.

KLM (dutch), Iberia (spain), Icelandair (Iceland), etc, etc.

Don't see the big picture why You have negative opinions, this is a normal and regular business like any other business so We need to sit, wait and see the results later on, jumping to conclusion is not productive or creative.

this is not a regular business, like any other business, as you call it. if you believe it is , then go right ahead. one of the most critical aspects of opening up a business is TIMING. if you live in a tourist destination, in the DR, you do not open up a restaurant or bar in the off season. nobody says that you should not open one: you have to know when to do it. also , if 100 other guys have opened in the same location and failed, maybe that should tell you something. i watch places here change hands every three months, then some other guy opens under a different name. you invoke the name american airlines to indicate that we can do it too. they have 750 aircraft, assets of 69 billion dollars, and decades in the business. not because they can survive means we can. it does not take much of a setback to cripple a small airline!!

"According to some sources, foreign investors own 47 percent of the new carrier’s shares, the State has 30 percent, and local investors 23 percent."

This airline is only buying 2 planes it is a test if they can pull a profit even $100.00 a route then investors will be happy if they lose they file for bankruptcy leave their passngers stranded and get out.

I give them 6 months tops

Jander: Do You believe that this equation that you post it: 47% foreign investors and 23% local investors are willing to commit a business suicide venture???

Good grief people, get a life...

Jander: Do You believe that this equation that you post it: 47% foreign investors and 23% local investors are willing to commit a business suicide venture???

Well in therory they cannot make a profit at least not in the short term.

It's not about profit at least not right away, it is about value and market share.

If they can get enough advanced bookigs to pay the bills they can stay afloat for a while.

It is also an offshore investment and a tax shelter for foreign investors.

I wish them all the luck in the world and don't and I hope they have a management team that can top Spirit and Jetblue , Southwest and the other " no frills" airlines.

Just have to wait and see.

dred ...jamaica is a dirty little secret aside from Sandals which is well run ..... Jamaica as a destination of quality up market tourism is circling the drain.....you understand they are fighting it out for the the all inclusives ....It has become like St Croix we dont go there anymore ...just go to a travel convention and ask dred ...the last prestige sailing event was moved to the DRm out of jamaica for this reason...they are competing with the cubans for the bottom of the barrel

http://www.dominicantoday.com/dr/....ailboat-racing-to-begin-next-year dred you dont give up pretige events like this you lose them

Jander: bottom line is We have to wait for the "Timing" and stop being negative since the beginning since this is not a real "Entrepeneur" and "Business focus" positive mentality.

Donald Trump already made US$350 million dollars in Cap Cana so if He would it think and follow people like you He wouldn't be in the "Win-Win" position that He is holding and standing now.

Dominican Republic is moving forward and looking to the best to come, to me this means a lot

Jander: bottom line is We have to wait for the "Timing" and stop being negative since the beginning since this is not a real "Entrepeneur" and "Business focus" positive mentality.

Donald Trump already made US$350 million dollars in Cap Cana so if He would it think and follow people like you He wouldn't be in the "Win-Win" position that He is holding and standing now.

Dominican Republic is moving forward and looking to the best to come, to me this means a lot

I used to rent my apartments to Aeromar.s flight crew , so excuse me if I am skeptical.

They lasted about 6 months

The airline was established in 1998 to replace the defunct Dominicana de Aviación. Service began with a single Boeing 727 leased from Falcon Air, for routes to Miami and San Juan. In 2001, it bought a Boeing 747 to a new route to Madrid, but the route was suspended 5 months later due to heavy competition with Iberia. In 2002, new services to New York, In 2003 The Airlines began to fly to Aruba, Havana and Caracas with Boeing 737, Boeing 757 and Boeing 767. In 2003, the airline ceased operations. Aeromar leased its fleet of Boeing 757 from Icelandair and Boeing 767 from Air Atlanta. Aeromar was the first airline to fly New York- Santiago, DR route in 2002.

Lets hope for the best and somehow someway lower the price to fly.

The dam taxes end costing more then the ticket.

Jander: Aeromar had a very "poor" management and I met part of the staff and saw almost daily basis operations at Terminal 1, JFK airport.

They didn't meet creditors expectactions paying debts to suppliers and Port Authority in a timely fashion.

I will give the benefit of the doubt to the new "Air Dominicana" and once again will be positive with this new business venture in Dominican Republic.

hey , JANDER, can you imagine how long they would have lasted in today's petroleum price environment, trying to compete with Jet blue? Rubirosa thinks that questioning a judgement is being anti-dominican. if they attempted this in any country, i would express the same sentiments.airlines are not fun things to run. they were falling dead when jet fuel was 63 cents per gallon. now it is 5 times more expensive. what are you guys thinking.? besides, post 9/11, do you have any idea how insurance costs have escalated? and Rubirosa, i asked you what do you think will happen if you lose a planeload of passengers? have they any idea of the kind of lawsuit that would eventuate? get real, and listen to Jander on this one. it is patently obvious that he knows a heck of a lot about this subject. if he felt it could work, why would he not say so? do you think he has a hidden agenda to sabotage the company, and ,if so, to what end?

dred this is a small airline startup,..... around the world there has probably been 10 others this month ....there are big rewards if you hit it,just like a casino....and those fly guys cant get it out of their blood

casino is the word. personally, i would take the money to Foxwoods or atlantic city. at least there you could get lucky. but in the airline environment, FUEL PRICES are not coming down anytime soon! i personally would get a statistician to calculate the odds between the casino and the airline before spending the money

everybody pays the same for the fuel....as everyone knows its labor that is the big variable in airline business

Dear Mr Dredlocks
Just a couple of observations. When you call yourself Dreadlocks expect to hear Rasta man or call yourself something else.
Best time to buy real estate in the US is in about 1-1.5 years when there is a lot of blood in the streets. Same thing would go for airlines. This is nothing more than common business sense and in a market that goes in cycles. It is just low in the cycle now but will cycle up again as it always does
What has 72 austrailian airlines gone south have to do with the price of eggs?

I have made a lot of money in real estate. One time when I was trying to tell a friend that it was a good investment he replied, "If it was such a good investment why doesn't everyone buy it". I wrote him off as a complete idiot for not even having imagination.

People are still flying and Jet blue makes money at high prices and they are even higher than American and Continental for the same routes.

When the US economy takes a crap so will the price of oil

a senior 747 pilot with Fed Ex makes a quarter million a year......hes like a bus driver with bennies

Escott, what exactly do you mean when you say that the US economy will take a crap? do you think that a severe recession is on the horizon, or that it will bounce back real soon? if it goes into the tank, what do you see for the future of airline travel to recreational destinations?

second residences dred second residences not recreational destinations

for some, they are one and the same.

dred you will be happy to learn that at 5pm comrade Raul lifted the ban on tourist aparthied in cuba .....the days are numbered ...how do you say glasnost in cuban?

were i you, i would be a little more restrained in lavishing glee: look at russia today. trust me, when the next revolution hits russia, it will be irreversible!

it is interesting to note dred the russian people never had the concept of private property even under the tsar. They were ripe for marxism

personally, Gouletcolonial, i am not a dyed in the wool supporter of everything fidel did and stood for. i never understood why the little ice cream cart i used to buy from was owned by the state. there are situations which are just too extreme for my tastes. however, i do not subscribe to the idea of privatising water, either!!

dred do you remember an airline called Prinair? It was quite large ...I was on the very last flight also near the last flight of Antilles Airboats the worlds largest seaplane airline at one time....owned by the beauteous Maureen Ohara

and Charlie Blair the famous pilot

Goulet, do not disclose too many of these tidbits. we will be able to triangulate your real age!

I moved first to la isla encanta P.R. our soon to be 51st state in 1974 ....ok sherlock

dred I am sure you are a sincere person in your beliefs and you have gained my grudging respect .

i always told you to give us the benefit of your knowledge and leave the humor to seinfeld. Oh jeez: this is beginning to sound like a love fest.

Well, well well, seems like many have much to say about the airlines. I would like to add my two cents. Based on my schooling, Currency, Social class , entrepreneurialism, free markets literacy rates and......National airlines play a major role in the future of a nation. A national carrier is significant because it gives the perception of growth, stability and advancement. I also cannot remember the texts but do remember this in most of my college classes. It serves as a marketing and branding tool to the world. It signals the world and would-be foreign investors that the country is viable and has capacity. It exudes national pride and above all "confidence" in the stability of a nation and its ability to support bigger enterprises..........

above comment is from ladronazo:

.....And yes an airline can be profitable, very profitable if it is managed properly. As one stated here American Airlines makes money hand over fist on its routes to the DR. It does so not only on its passenger space, but its cargo space. Why is it that now you are limited to 50 lbs on the airlines. Why do your bags get bumped from the plane? Because this allows more space for precious cargo that pays premium rates. Cargo produces higher profit margins than passengers. Cuba in its dire economic state has Cubana Airlines why can't we.

This site software is buggy, on occasion it does not post names of users.

i agree with all you say about the imagery. what does it signal the to the world about a country's ability to support bigger enterprises if it goes belly -up in a year? or drowns in a sea of red ink? in this day and age , i hardly believe prospective investors care if the country has a national airline. that may be true of 40 years ago. the economic realities have mutated. there has been a paradigm shift away from showcase projects towards projects with a really good chance of success. most airlines fail.

You're very right, but as stated "if managed properly" Though I do not support any politician, I must admit that Fernandez has changed the Business environment in DR. The airport at Las America's and Santiago 10-15 years ago were disasters, and now they are very profitable enterprises. DR does not need to be AA or UA or Delta. It needs to serve only niche markets, NY, Miami, Panama, Venezuela, PR. There are more than five U.S. airlines Delta, American Jet Blue, Continental, Spirit Airlines flying into the DR not to mention Copa, ATA, Iberia Happag-LLoyd from Germany. A 45 minute flight from PR cost $300-500 minimum. From Miami 1.5 hours $400-700 depending on season, I have flown in Oct, Feb, May and middle of summer and have yet to fly on a flight that is empty. If Flights were not profitable AA would not be there. Delta which has always been conservative airlines purchased route rights to DR. Again this is a chance to learn from previous administrations and do it right.

I am sure back June of 2007 no one was thinking of 100+ for a barrel of oil.
They were to launch this month but still no website to book online.
This may be over already?
However the big difference is the Government has a minority share .
Well lets hope the foreign investors are patient and can sit on this until the economy turns.

Middle income Americans will be taking vacations closer to home, that is if they still have one.
It's not pretty out there and now the UK's economy is looking to go the wrong direction.
It just doesn't add up and for that I think the timing is bad.

From Travel Weekly:
Air Dominicana, a new charter airline in the Dominican Republic, will launch 737-800 service to and from the East Coast of the U.S. from its hub in Punta Cana in April 2008. Future routes will include intra-Caribbean flights as well as service to Central America. A second 737 will be added in June 2008, and a 767-300 in October 2008. The Dominican government is a minority p

By having more airlines reaching DR, AA and others will have to lower their price, making tourism in DR all the more attrative.... simple economic equation.

I understand those who see it as dumb idea, but this gives the country independence and much more...

Gouletcolonial -
About Concorde, it did run at a profit. The French had financial trouble with theirs, however British Airways made profit. Concorde was about more than money though. It was about showing the UKs close relationship with the French, who have always had a Love/Hate relationship. It was also about showing the Americans who ruled the sky. To this day, the craft is still very advanced. How it stretches and changes shape in flight is amazing. Even now we still don't use Supersonic passenger airlines. In its 25 or so years it never had a fault. There was one bad accident, but that was due to debris on the runway, not the aircraft. It was capable of beating anything at the time and set many records, upon its maiden flight to NYC the Americans made such bad press of it. Using pollution as an excuse. Can you imagine that? Americans concerned about pollution. More angry about being upstaged.
Concorde is an aviation icon.

show me a link where it says the concorde made a penny english or french it does not exist...its safety record is no big deal based on the number in service and miles flown....it was a TURKEY in aviation....you cannot eat National pride....the US scrapped their SST because they saw the limitations...It never made a penny. the concorde yes an expensive icon

correction ..apparently it finally started turning a profit for BA but overall in was money in the toilet

This may be in poor taste for the very seious ones here but for the rest it is just too funny to not share.

http://www.gringo-times.com/artic....ir-dominicana-buys-new-airbus.php

Again not my opinion of the DR but If you live here you should chuckle

http://www.gringo-times.com/artic....uild-new-Dominican-motorcycle.php

The Concorde was a flying symbol and that is the motive it was flying for so long. Retirement was imminent and the only used the excuse of the accident to push the aircraft out of service. As already told here, the Concorde had an excellent reliability history, with only the fatal crash that occured in Paris, which was allegedly caused by debris left from the previouse aircraft takeoff. Before that, it was considered the safest operational commercial aircraft in history with zero deaths per traveled km.

The fact their is no similar replacement alternative now that the Concorde is out of service only indicates that although spectacular, it's not profitable in economical terms. At least not with the current technologies, and specially not with the fuel consumption the Concorde had while carrying only a mere 100 passengers.

Dominican Space Rocket Launch Set for April 30th
More Astronauts Required...

http://www.gringo-times.com/artic....dominican-space-rocket-launch.php

More articles from 2007-8
BMW To Build New Dominican Motorcycle

The Bush Interview

Santa Caught in Coke Scandal

United States Bans Coconuts

Disney to open in Puerto Plata

Paris Hilton Interview

Submarine Found in Dominican Bay

Trump Buys US$56 Billion Plot in Sosua

Air Dominicana Buys New Airbus

Kryptonite Found On Cabarete Beach

Dominican Police to use new Speedguns

Dominican Space Launch set for April 30th

some posters in this forum are so filled up with nationalistic pride that they invent the most ridiculous justifications for developments in the country. case in point; Carlos Franco asserting that competition from air dominicana will force american to lower prices. does he really believe that an airline with two or three aircraft is of any import to an airline with 750 planes? actually,Carlos, it is the other way around. if they want air dominicana out of the way, they can reduce their prices to a level that air dominicana cannot match and stay viable. it is like saying the opening of a pica pollo nextdoor to McDonalds will force them to lower their prices. people, please understand that airlines cannot offer willy nilly low price fares and stay operational in the world economic climate. even jet blue is no longer the bargain it used to be. reality triumphs over hope most of the time.

Mr Dreadlocks,
The economy of the US has been in the crapper for a while. That hasn't affected travel to the DR and won't in the future. It is a addiction plain and simple.

I expect the real estate problems, subprime/bubble to be over in 1-1.5 years. I will then go back and buy in either the Atlanta or Palm Beach Country Florida and hold for 2-5 years. Big money to be made when there is a lot of blood in the streets. Real Estate while a little different than Airlines runs in cycles and so do Airlines. Best time to get in is when the business cycles down and is going to cycle up again.

Hope I have made myself clear.

BTW haven't seen Belial here to bad mouth the US. Maybe the case of Rabies got the best of him! LOL

Escott, while i understand your reference to the business cycle, you cannot possibly equate real estate and airlines. real estate has no operating costs. once you buy the property, it can sit for centuries without maintenance. sure you will have to clear the brush if it is in a residential neighborhood, and protect it from squatters who seek to acquire it through laws of adverse possession. airlines, on the other hand, have to consider the costs of leases, the cost of fuel, cost of insurance, landing fees, c-check annual maintenance checkups at 8 million per plane, routine maintenance, and the unthinkable possibility of a flight going down. as to your contention that oil will fall in price: do not hold your breath on that. the USA is not the only country with a high demand for oil. 30 yrears ago, all you saw in the streets of beijing was bicycles and oxcarts. today we have traffic jams. Tata of India just bought Britain's largest auto maker. the demand shift is to the eastern

world. with vietnam and cambodia waiting in line to become the new powers, we are talikng a major shift in oil demand patterns. then we have to consider the former soviet republics ,which are themselves becoming consumer societies. no sir: the price of oil may fall, but very minimally.

Oh wow! Oh! ummh! Yeah! uh uh sooooooooooo What makes the DR gov. think that AA will simply let you guys have a successful airline oh yeah! since when have the AA body became so nice? So you think that AA will not do everything in their power to keep that plane on the ground? Come on we have already been checkmated a long time ago all we can do now is try to settle for a draw. If you want to know what will happen to Air Dominicana take a look at what happened to Air Haiti i think that;s what it was called anyway you get the point unless AA owns a cool 97% of Air Dominicana it will not fly and thats a fact.

Gouletcolonial -
Most of what I know about Concorde was from a tour I did. You can visit one at Manchester Airport in the UK. The tour was pretty impressive and covered all aspects, design, marketing, politics and business.

There is a little information here
http://www.concordesst.com/retire/faq_r.html
I'm sure Wiki goes into more detail.

It was profitable, but was becoming more and more difficult to run at a profit. Times changed.
It couldn't possibly be called a turkey though. The Americans gave up theirs because they were developing a dead goose. The same when they were trying to develop a plane with vertical take off capabilities, they kept screwing it up and had to get the British to finish the Harrier.

Even down on the ground Concorde still makes a profit, with people like myself going to visit it.
I remember being a kid and being told if you fired a rifle at it, the bullet wouldn't be able to catch it in flight. Amazing.

Some fanatics even get married on it!

Goulet, i see where you wrote the sentence" you cannot eat National Pride". could it be that we think more alike than we display in this forum.? this is exactly what i have been trying to explain to those who say that a national airline will lead to National Pride. what the heck does that mean ,anyway? heck, does anybody in their right minds believe that when people choose to do business in a foreign country they have a checklist of required qualities which include " ownership of national airline"?. do they think that if air india went into receivership ,software companies would look elsewhere for products??

I have video of the plane on its maiden flight from DR to Japan!!!
http://www.youtube.com/watch?v=B8ZOk7d4qS4

duane the SST that the US abandoned was dumped because they knew it could not turn a profit...france/england continued with concorde out of national pride it was a turkey....the harrier was bone throne to UK national interest as an ally.....do not rely on Wiki for your info particularly when you are researching controversial subjects like the turkey it is very unreliable......PS keep up the good work with Rolls Royce and Jaguar

dred you are correct about this issue " national pride cometh before the fall ".... however there are some different spins in this aviation equation ...........We as an island need as much lift meaning seats as we can get.....anything that takes price pressure off the seats to the DR is welcome.... If I am wrong I can hear your voice saying" I told you so "

the free market will dictate the outcome....if the crooks dont get em first

Goulet, i hope you are not wrong, because anything that benefits this country is joy to my ears.what is not a joy is $3.45 per gallon for jet fuel which sold for 65 cents less than 2 years ago!

All of you guys have good input into this forum
I am taking dreadlocks side and agree with all his stament in this forum. Specially with the cost of jet fuel at US$3.45 per gallon at present and to stay competitive with 4 planes against 750 AA.

Besides the cost to maintain these equipments and pay some one to maintain them for you are enormous since you don't have the technical know how or have to invest millions on equtpt & hangars that you don't have. A good example was Colombian AVIANCA had to be sold to Brazil due to the maintanance cost at the hangars.There is where all the big co get you.ex.Luftansa,air France & AA.

People can't compare realestate to airlines ,If that were the case why didn't Donal Trump invest in
it and would have gotten more than the 350 millions?. Forget about national pride,specially now days where we live in a global economy. Again i ask every one of you, if you were to invest in Dominicana de aviacion at the present, would you?Gvt 30% is a subsidy !

thank you, Mr Rancier, for introducing the issue of hangar costs: i forgot that one. if your plane breaks down at JFK, and is laid up a month for repairs, you do not get the hangar space for free. it is not like leaving your yamaha 100 at the local bike shop and having the repairman return it without charging storage. hangar fees are enormous, just one more massive expense in the airline equation.

Dreadlocks, you are a wealth of knowledge. Keep up the good work.

everybody pays the same AA does not get a discount .....AA does not have 750 planes in the DR serving only the DR.....AA pay scale will be far far higher than air dominicana subject to union approval .....Air Dominicana should target the weakest link in chain and there are many.....with local orientation this will be a competitive force and help keep AA honest in their pricing structure....the only thing I fear is fraud and mismanagement ....which are two things that do not exist in the DR [ouch]

thank you very much for your kind remarks, JOHNUSA. the cheque is in the mail.

dont cash that check it is written on Baninter

my, my, Goulet. aren't you up a little early? does this mean we both are serious about posting, or have nothing better to do?

actually, Goulet, when i make reference to the 750 planes, i use it to emphasise economies of scale. because of volume, there is a lower operating cost per unit. let us say you have one car in the family. you pay 1000usd to insure that car. if you have a fleet of 10, you do not pay 10,000. there is a progressive sliding scale which gives a discount to each successive addition to the policy. so, with ten cars, you might end up paying 7000, which effectively works out at 700 per unit. the same applies to all other ancilliaries: maintenance, food service, etc. also, if anyone can afford to cut fares and survive, they are the ones who can do it. that is why there are no Mom and Pop pharmacies left in the USA: big players, such as Rite Aid and CVS used economies of scale to run them off on a rail.

one other observation Goulet: i am sure you are aware of the risk/reward equation. even if airlines do not go into premature receivership, they do not make any worthwhile profits.the fly boys who really make money are those who use scruffy old planes to fly cargo for outfits such as DHL in jungle outbacks. passenger airlines have too much risk. the risk/reward ratio is stacked more toward risk.

no mom and pop drugstores but plenty small airlines....but do the Milton Friedman on the labor costs forget about any advantage AA has..... and thats the killer labor costs.....not fuel

DHL and Fed Ex and UPS are the biggest airlines in the world.....along with Executive Jet rental may actually be the biggest, their corporate name is Net Jet

Goulet, you know the travel business, so you should be more cautious when you express optimism.(just as i should be cautious with my pessimism). one of the issues with airlines is that they need superlative management personnel to stay alive. mediocre guys cannot run an airline. look at malaysia airlines: it was haemorraging money, until the new CEO rescued it with sheer brilliance. it is too much of a roll of the dice. i am sure that if you talk to some of the guys in the circles in which you move, every last one of them can tell you personal stories of failed startup airlines.

yesGoulet, and i guarantee you there is not enough tea in China to persuade DHL, FED EX or UPS to switch from cargo to passengers!!!

like I said the only thing I feared was fraud and mismanagement two things that do not exist in the DR.........ouch..........UPS...Fed Ex etc would love to be able to sell seats but their license does not permit....Imagine that price war on tickets

Fed Ex actually wanted to do joint cargo /pax government said no dice...you cannot play in that casino

precisely, Goulet. notice that they stayed with cargo instead of switching to passengers?

they had no choice ...government said no.....can you imagine selling stand by space on joint cargo/pax aircraft

that is not what i mean, Goulet. i was stating that they had a choice of passengers or freight, and chose freight over passengers.

very interesting thread...dread, are there any books on economics that you would recommend to someone who wishes to expand their knowledge on the subject?

dreds books all came from Moscow and are a little out of date........................................................................sorry I could not help myself,with that cheapshot

yes dred they were already in freight and wanted to do both with the same planes slightly adapted and yes they stayed in freight

wow 106 comments...it's a new record!!!
By the way check out the video of Air Dominicana's maiden flight!!
http://www.youtube.com/watch?v=B8ZOk7d4qS4

LOLOL...that was great Edward..

you guys who are doomsayers will all be sorry ....As I said once before Air Dominicana was once a famous name in Caribbean aviation.....and now the phoenix flies again....good luck to them

a famous name, Goulet? by what criteria do you adjudge it to have been famous, or is this yet another tongue in cheek remark? and cibaeno, thank you for asking about economics textbooks.i have no idea what your formal training in economics is, and am scared to recommend a particular text. my advice is to google Economics Textbooks and select from the bibliography. or ask Frank the Tank what the current texts are. i studied this stuff a long time ago, and thinking on the subject is very diversified. for example, classical economics is based on the presumption that consumers act rationally. new schools of economics are debunking some of the old thinking, based on the contention that consumers, in the main, do not act rationally, and many times in a manner contrary to their interests. that contention is borne out in part by my usual post, that the poorest segment of our society owns the most expensive cellphones!!

Mr. Cibaeño, I would recommend the writings of Robert Barro, as he is truly a genius.

Frank, does he have a central piece of work, or is he more into writing articles? hows the weather? sub zero? sorry, i could not resist that , since i am so jealous of you up there at LSE. who the heck do you think you are? what, no invitation to join you? and you call yourself my friend? stay well, Frank.

hey again Frank: have you read Small is Beautiful, by EF SCHUMACHER? it is subtitled Economics as if people mattered. i have been made to understand it is a masterpiece. Cibaeno, get yourself a copy. mine has been ordered by the bookstore.

sorry to bother you Frank, but i wanted to ask your opinion of the Secularization Hypothesis, which states that as a society grows richer, it becomes less religious (except in the case of the USA). could it be that very poor societies are very religious because the political , economic and religious overlords fed them a steady diet of religion to give them hope and keep them tranquilised?

Mike, the minds that authored said work are above reproach, let alone my youthful banter, and the numbers are certainly hard to argue with; but I do, differ in opinion, I think they have failed to factor in, a key variable. That is the aging population in industrialized nations(mostly Europe, as u stated the US has for the most part has escaped this phenomenon), and the waves of legal immigrants(and illegal’s)from LDC(Less Developed Countries)which are needed to power these economies. These individuals tend to be incredibility religious in nature and some of their offspring border on loony (in religious fever) ,and this is the coming face of Europe. The funny thing ; it’s is precisely Economic incentives that have led to a religious renaissance in Europe (and the drop in population growth among “traditional” Europeans), because as countries become wealthier, the opportunity cost of peoples time rises.

Children take time to nurture, and because of that people choose to have fewer of them. Some countries(France) are using financial incentives to increase their fertility rate as an attempt to stop the current trends( too bad I cant put up a graph(as a model) instead writing so much, as it is not one of my strengths).

As for the less developed nations, the situations tend to be way too complicated, for me to even begin to explicate my thoughts on the subject at this time(because I would be posting non-stop for a few hours). This is conversationis better left for one my trips to the DR with a cold Presidente in hand.
Ps. I have not read the book u mentioned above, I will look into getting a copy.

maybe when you come to the DR next time, we can arrange to meet and flesh out some of these subjects. i hardly think one cold presidente will be sufficient: more like one case! try reading schumacher: one of his interesting hypotheses is that because of economies of scale, there is an unnecessary crisscrossing of the same product. let us say there is a bakery in liverpool, and one in london. in order to maximise economies of scale, they both produce large amounts of bread. the local market cannot absorb all the goods, so the guys in liverpool end up selling to the guys in london, and vice versa. their delivery trucks, loaded with the same product, pass each other in the opposite direction. simple, but true and interesting

as an aside, guys and dolls, another one bites the dust. ATA airlines ,just today , filed for chapter 11 protection: in other words, it is going bankrupt. it had 30 aircraft, 2300 employees, and flew mainly to vacation destinations such as las vegas and hawaii. it also flew military charters, but lost that contract. i tell you, fellas, this is a tough road to hoe!!!

Correction! I have read some SCHUMACHER,(one call, and the DAMD British and their large libraries lol) As I understand it the books are organized into a group of essays, I have read many(of his works) but not organized in such efficient manner, so I hear.

P.S my work has me in air to Miami, sometimes 4 times a week, I haven’t gotten use to the cold (lol)

not if they got that military contract ATA lost.....then Air Dominicana hits jackpot

air Italia is a bigger bust.....air france withdrew their bid yesterday to take it over

http://money.aol.com/news/article....l-operations/20080403062609990001

and yet another recent article the lends some weight to dreads arguments on here..

Goulet, i do not express negative opinions solely for the purpose of alarming people or being a naysayer. i have always advocated small assembly ( you started the wheelbarrow thing, not me, remember?) airlines are hell. the fuel prices make them virtually unsustainable, whether they are big or small.

hey Frank, hope you got a few stopovers for spring break in miami!! that will make you forget subzero in London! yes, Schumacher is more of an essayist and opinion spinner, rather than a theorist such as Barro.

Frank, while you are at it, read up some stuff by Steven Levitt, one of the new breed of brilliant rogue economists. i am sure you already have, but, just in case...

BTW thank you for the info Frank and dread...I will look into this Barro's work..

Cibaeno, let me caution you about Barro. he is a very hard writer to read. as i said, i am not sure what your background is in economics, but if it is not really solid, it is going to be misery reading his work. he is basically a macro-economic theorist, and macro is tedious stuff, in my opinion( Frank possibly differs with that observation. he probably likes that grinding work) my suggestion is to get a hold of the seminal economics textbook by Samuelson. i forget the title. just do a google: that text is really good for establishing a firm background. then, and only then, should you even attempt Barro! are you in agreement,Frank, or do you young turks consider Samuelson outmoded?

i got it, cibaeno: the book is Economics by Paul A Samuelson.

Frank, i like your insight into the religious renaissance in Europe, occasioned by the immigrant influx. it is not at odds with Barro's secularization hypothesis, because, if you examine it, it is the poor of the world who are flocking to EUROPE to seek a better life. these are the same people who he asserts are likely to be highly religious, having been spoonfed heavy diets of religion to keep them subdued. so we will see a short to medium term upsurge of religious fervor and extremism, which will wane when succeeding generations of these new immigrants are incorporated into the economic mainstream and realise some material success. they will, all things being equal,become more secular!!

I tend to be a weird individual( AND OUTSIDE THE BOX) because I tent to site Lawrence H. summers and I tend to mix a little of Barro and a sprinkled on the side of a little Karl Marx (hope that doesn’t hit me in the foreseeable future lol ). I tend to be of wary of offending people with such a reputation such as yours, Mr Cibaeno, I was going to ask, if you have taken macro and micro because Barro is alive with econ. Jargon .

I have abolutely no training in economics (my academic training is in an engineering field) other than reading "The Wealth of Nations" years ago and some sporadic articles here in there from the likes of Greenspan and others (Marx's writings are also familiar to me) and what I know from managing my stocks but don't underestimate my reading comprehension:)..Thank you for the heads up, though, Frank..in any event it's a field that I've been interested in expanding my knowledge in for some time.

Boeing 767
Airline Start-up airline start-up

So you are planning to start a new airline?

Before we start let's take a look at why new airlines fail. There are obviously many reasons why an airline fails but the two main reasons, and perhaps the ones that you have the greatest influence over, at least at the start, are your airline management team and capitalisation. These two elements are essential ingredients to get right if your airline is to succeed, if either item is lacking your are destined to failure!

everybody pays same price for fuel.....that playing field is level....so stop using it as an example.... in this case it is a poor one

ur right on that issue, Mr goulet, how are you getting back to canada, hope is not by private plane bye bye!

Goulet, you assert that the two reasons airlines fail are management team and capitalisation. there are others, but management team and capitalisation are critical to any enterprise. anyone can tell you that if you are going to open a restaurant, for example, you need to have six to eight months of available working capital to tide it over the startup period, otherwise you stand a good chance of going bust.

tank I will have to pay the price ........... wont you?

This goes for all.. specially Mr. Dreadlocks: Excuse me for barging into your posts, is is my first time here, but I've been reading all the posts and there seems to be an unfriendly discussion which is (sadly) based on "BAD" information. To answer the question "why would anyone want to start an airline nowadays" first we ned to now who is behind it and then figure out the purpose.. the people behind Air Dominicana have other businesses (Hotels, tour operators and even other airlines), the purpose behind Air Dominicana is to use a self-owned airline to move the people that book packages with the hotels and tour operators owned by themselves (sort of like "keeping the business in the family"). They do not intend to head-butt with major carriers, they know better. The purpose of Air Dominicana is to make money but not directly from the airline but rather make a larger profit out of the other businesses by keeping transportation expenses to a minimum. On the other hand.........

...if Airline business is a bad as they say then why is it that more and more planes are coming off the assembly lines every day? why is there a shortage of pilots world-wide? why are pilot salaries going up steadily once again? why are all major carriers as well as regionals hiring MORE pilots? why are countries such as India, china, japan, singapore, UAE (the list goes on) basically fighting over crewmembers? because business is "BAD"? what are they? masochists? PLEASE!! thats like trying to put out a fire with gasoline!!!! Air Dominicana will come out, will satisfy THEIR demand for transportation of passengers and might even serve international frequencies without a major carrier interference.. Ever heard the therm A.C.M.I. In aviation? basically stands for (lease), and those guys seem to be doing ok... If anyone here seems to think that people will stop flying because of GAS prices being too high then you are dreaming!!!!

ramsesmontes, i have no idea what you characterise as Bad Information. i scarcely see how records of the performance of fledgeling airlines can be described as such. nobody is saying air dominicana is bound to fail. the incontrovertible fact is that airlines are very risky business. you post as if dominicana will not fail, because they have strategies which render them immune to failure. every airline which starts up begins by thinking they have a formula nobody else thought of. they have target markets and products no-one else knows about. they will out-compete the incumbents. they will triumph over goliath, because no-one on this planet has ever seen anything like them. well even the mighty jet blue, which started up as the highest ever capitalised carrier, with backing of some of the richest men in the world, such as george soros, lost 22 million in its first year of operation. luckily, it was so heavily capitalised it could weather the storm. i have no idea who constitutes this

consortium of entrepreneurs, but they better have very deep pockets. if revenues fail to meet expectation in the first two years, and investors cannot pony up substantial amounts of bridge financing, it will go the way of ATA, which , just today, filed for chapter 11. on the other hand, it might just surprise the skeptics like myself and survive!

thank you for your enthusiastic support

Dreadlock, don't forget the subsidy, "Drugs".

Ramsesmontes, i studied your explanation regarding the proposed business model for air dominicana, and , correct me if i am wrong, but you seem to suggest an all-inclusive, in house concept, fully integrated. you suggest that the airline would be a loss leader, and not necessarily the main profit center. the bulk of the profits could come from the hotels, convention space etc. you say that they would not try to butt heads with the incumbents. well, lets ventilate this. firstly, the incumbents would not give them a choice in the head-butting game. if the incumbents felt threatened, the games would begin. secondly, you do not loss lead in business with the most expensive items. you do not use a risky, uncertain, fragile aspect of business to attract clients. if the risky business begins to falter, it will either have to use the profits from the other profit centers to subsidise continuity, or seek bridge financing, further driving up operating debts. none of this is BAD INFORMATION.

Dreadlocks..... you're going in too deep. My point is simple.
1- Air Dominicana's passengers are not "you're average passengers", they do not buy tickets to fly AIR DOMINICANA, they buy an all inclusive package which happens to include an airfare.
2-Air Dominicana is not selling seats, they are selling flight hours (at whatever price thy choose because they are their own customer/provider.
Ever hear of FUTURA Airways? well... they are the mother company of Air Dominicana, they are simply installing a HUb in this side of the world,... as simple as that.... A business model that has and still is working in europe, with european passengers its being applied on this side of the world. the people that put the project together,

thank you for taking the time out to enlighten me on those aspects of the business model. we have never been privy to those details before. have a nice day.

are the same people which are going to run the thing.... Its not rocket science dude.. If you're making cookies and the recipe is good and they sell why not open another store and sell more cookies (provided the market is demanding more).. Air Dominicana is not a "start from zero, and let see what happens" business model that some guy put together thinking that he has got the "magic formula", it is a proven business model with self-sustainability capabilities. Enough said. I understand your fervent desire to back your posts at all cost to justify your academic achievements, it's ok.. I understand, I really do.. and I back you up 100%.... but perhaps you need to reconsider your position with this new information being provided? (then again..looking at the trend of your posts its is easy to predict that you will not reconsider anything..LOL). Just remember.. (because I know you know this already)"The results of a situation assessment study are as good as the data you feed it" Cheers!

he read you like a book

dreadlocks:
In this adventure of AIR DOMINICANA, why is the State share at 30%? as a subsidy?If the State
has so much money why don't they invest it in education,health,electricity,water,transportation etc?
My guess is ,it is a form of investment for themselves in the name of the State with State funds.
You don't see that here anymore after PAN AMERICAN which was US gvt partialy owned ,got broken up, since it was consider a monopoly by the others. It never went red due to US injecting billions as subsidy to keep it from going under. Their motives was clear it could be used in case of war,but so could the others.
As to what Mr ramsesmontes says about the mother co FUTURA airways could be so.Just because it works in Europe does not mean it is going to work in DR w/o HANGARS . EU all have
maintanance hangars . DR does not have the first one. It all sounds good and i hope it works for their own sake. What i don't like is State investment when it could be allocated in other priorities

when you say pan am was partially owned by gov.....when was this? what year ? news to me.....enlighten us

after ww2 & thruout the cold war

this must be conspiracy theory stuff....Pan Am was never owned by US government never in any way,that being said it was considered the flagship airline of the USA and held mail contracts that allowed them to overcome their competition in their early days......but government owned never

When gvt contracts are constantly given to a co for 60 years for what ever reason thereof are
on standby for troop carrier as well as mail delivery and a good portion is backed up by the USA gvt treasury.I would say it is partialy owned,that not being the case, why such a preference?

no again ...do some research ....even wiki discounts you emphatically .... no where will you find government ownership in an airline in USA.....Practically every country has a national airline never the USA.....Most people felt the government should have bailed Pan Am out when they went under in the 70s... ,,read my lips "PAN AM WAS NEVER OWNED IN ANYWAY BY US GOVERNMENT"

this is a tired horse, but, as an economist by training, i have to look at the concept of trending to assist me in my deliberation of matters of an economic nature. just this very week, three air carriers filed for protection under Chapter 11, which means they are going into liquidation. the reasons cited were fuel costs and slowdown in the economic environment. if dominicana is not affected by those two considerations, then it will probably succeed where others could not. but one must conclude that the current trend does not portend well for a startup airline in these times!!

depending on local circumstance and opportunity probably yes but their market study says go......you wet blanket

dred give it your blessing....it is high risk .....high reward...their economists are privy to more info than you in local factors....lets roll the dice....we only have incompetence and fraud to fear and that does not exist in the D.R.

"we only have incompetence and fraud to fear and that does not exist in the DR. goulet, you have me confused. now i do not know which side of the debate you take. i cite economic conditions and trends, you cite fraud and incompetence. which of these two sets of factors do you think is more pernicious?

I was being facetious about fraud and incompetence in the D.R......you mean to say it does exist?

some of my acquaintenances have suggested to me that it does, but i am skeptical. they also have been known to disseminate the vicious rumor that there is also a group of corrupt political and military figures. knowing this to be categorically untrue, i am beginning to discount the assertion that there is fraud and incompetence here. it's just sour grapes!!

thats the spirit and remember.....they are not happy until you are not happy

just whom might this THEY be?do you, incidentally, number yourself among their ranks?

the frauds and incompetents ? on a bad day yes........ nobodys perfect

HMmmmm... where in the world is there a country that LACKS FRAUD AND INCOMPETENCE at governmental level? I anyone had locates that country..please Indulge me with the answer so I can move there ASAP....LOL. I agree with you dreadlocks.. it is risky..well see what happens.
Mr Thelmo. The 30% share was a means devised to involve the Gov., and give them some kind of "control", it is a political strategy. The party in power already took the country out of category 2 (which was one of the campaign promises), now they are trying to launch the airline before the end of the presidential period (may 16 is election day) that way they can get some extra votes for election day. The Gov. involvement assures the shareholders that there will not be obstacles in the certification process (which has been done in almost record time by dominican standards) of Air Dominicana and assures the government some extra votes once the company is up an running because it allows them to say "we did this too, we

are part of this company, we we we we....etc" There was no money given to Air Dom, byt the DR Gov, just colaboration...

ramsesmontes, i am perplexed. you say in your last remark that no money was given to air dom by the DR govt. how , then, did they acquire 30% shares?

ramses, i like some of the reasons you give for government pushing ahead: the political capital to be gained. as long as the airline does not fold before may 16, who cares? they will already have spent the political capital gained by the announcements!

and no, goulet: i mean those who are not happy intil i am not happy.

http://online.wsj.com/article/SB1....037892591.html?mod=googlenews_wsj another one bites the dust ....Skybus folds the tents

what does that make this week? four?

falling like flies, i would say.

i have read all your comments and its really funny how every one is commenting on what the press has said. did you know what is the name of one of spain biggest charter companies name well ill tell you its called futura and if you did not know they are providing the aircraft 737-300 they are doing all the traning and they are doing most of the manegament, right now the airlines bigest interest is to fly down south how many airlines have routes from south America to Punta Cana so fat they have a full flight everyday until september so tell me if that is not profit. tell me if that is not business.

remingo: on what authority do you have it that the South America to Punta Cana route will be a full flight every day? do you have a study to prove that? where in south america? brazil? do you realise the losses you incur to fly an air liner below break-even to a destination which is so far away? i am a little weary of all the posters who claim that these guys have a fool proof strategy. every airline which starts up believes the same. do you think that the investors in all the airlines which are going broke every day did not think they would be profitable? you ask how many airlines have flights from punta cana to south america. i would say none. maybe the answer is none because the number crunchers of other airlines do not see it as a profitable route!!

Gee, I hope that by posting a message I don’t run the risk of being perceived negatively by my compatriots. It is all great and well to see our country’s name on an airline, even if it were not 100% backed by Dominicans Capital. I enjoy the topic of economics and would have to assume that those that have their capital invested in this venture have accessed all risks of financial failure adequately. In a different light, we should not fault the thinkers for being creative in starting this airline, despite the financial turmoils that abates us worldwide - those ruin even the Bears Sterns, Long Term Capital Managements and Nobel laureate alike.

With the general statements above, I wish them all the luck in the world. One can only look from the outside and guess at the plan B, plan C, and plan D management may have in store if things quickly do not fare well for the venture. With that I do not mean to say that they lack competency, just that I’ve have been around and seen how markets just make fools out of even the geniuses that run long tail probabilities of ruin.

Nothing would please me more than a well run, and long lasting Dominican Airline. Likewise we should not hold our breath in anticipation for the airline to fail. After all, why should we win that race? I vow not to start a restaurant or a supermarket chain or an airline. However many airlines are born, and many even last. As far as management quality is concerned my ballot is cast in favor of Warren E. Buffett and no one else. It would be interesting to learn what expert and experienced airline already serving the destinations Air Dominican endeavors think of their proposed business plan / scheme. I for one being fully aware that all Dominicans like to cut corners will not be purchasing any shares of this airline if made available for purchase even it was traded at the NY Stock exchange.

well dred i do not a study saying that they have a full flight until September but i know for shore the only country in south America is not only Brazil, also the 737-300 has about 5 hrs flight time and you need about 6 to get to brazil and besaids in south america you have s colombia, venezuela, ecuador, mexico, and many others also the carabean islands and if you check who are the local investors you will find that all the mayor hotel owners in punta cana have an investment. menaing that they will do what ever they have to do to fill every seat and every room they have. so far i have check and they have at least until september with full flights. another mayor investor is the airport managers and they are expected to reduce the landing tax on the air line, also the handling companies. and do not forget air euriopa does fly to punta cana from spain so i dont dought some flights from madrid to colombia air europa / air dominicana.

this is a win win situation

Air Dominicana is mostly of private investment, government investment in the new airline is minimum and will always be like that, actually, it will decrease with time. Not only is it mostly funded by private investment, but it should always be at least 51% dominican.

Air Dominicana will succeed.

more pessimism http://www.nytimes.com/2008/04/10/business/10air.html

People need real reasons to board that plane and not a plane from an airline that already has a running start. By that I mean, the ones that actually are getting people there and have a track record. It will take lots of capital to absorb the losses that will without a doubt be there from the start. Capital is and should be allocated in anticipation of those losses resulting from things unknown today. The only thing people with financial interest can do is promote, compete and assist with manpower in what may be needed in auxiliary ways to try and give this airline the added push it will definitely need. Let’s put forward that the airline will be more competent later on than at the start, and it is at the start that it will meet its greatest challenges.

What can hotel owners and airport managers do to fill an airplane from April to September, moreover how can one ascertain that the flights will be full at this time when tickets have not been sold. Just where is the capacity building that will from the opening day fill these flights both ways? I don’t mean to be rude but also, how can we make positive affirmations that it will succeed, and by that what does it take to succeed? Is it operating with profits and for how long? Is it operating without glitches? Is it the evermore expansion of a fleet? What does it mean to be successful, first lets consider those. The airplane has to plan with a pennant type of business flow, where less business will be at hand to begin and resulting in the largest losses at the beginning of the project and less losses as the plane performs and more people learn of the available capacity at competitive prices to and from.

people remember this is a charter airline key word charter. meaning they are dealing with touroperators if are looking for a vacation in puntacana and you get a good deal on a full package including air transportation and hotel accomodation are you going to care what airline you fly or do you care about what price and what service you will get. if the hotel owner reduce their profits on the rooms and by that they will be able to reduce the total package meanong that they will still make the same amount of money just split half here half there that there is a risk yes i know there is a risk but then again dond breath because you might take the risk of getting T.B or SARS. meaning risk you take everyday. so if you ask me i think they will succeed they have the elements to make a good company with are capital, manegment, desirer, and dedication.

Air Dominicana will succeed

another problem for the airlines pops uphttp://biz.yahoo.com/ap/080411/airlines_outlook.html?.v=10

luis, you have posted a series of very well reasoned arguments regarding airline startups. one of the common fallacies that most of the posters in this column display is the belief that if we can fill all the seats, the airline has to be a success. that is why they keep telling us that it is a charter etc, to assure us that more often than not it will be flying at capacity. people, there are other considerations.do you believe that the six airlines which folded in the last two weeks did so because they were all flying empty? luis has about said it all: in order to survive the first six months, the airline has to be very heavily capitalised. secondly, minor setbacks can ruin the balance sheet, such as breakdowns. look at the current mess at american, which is going to result is about 300 million in direct losses: forget the lawsuits.

dred I see you made bail

not really, Goulet. i am posting from Attica.

and by the way, Goulet, i am still awaiting the million or so that you promised to send to my commissary account. courvoisier does not grow on trees, you know!

stop drinking that cognac it will give you nothing but headaches.......all brands

Attica eh I will go dig up Bill Kunstler to get you out .....I think the ACLU has him freeze dried some where for a display

Air dominicana is a long shot but the rewards will be enormous if it is able to stay in the air......Lets roll the dice......shoot the 50 Gs......please no snake eyes

i hear all of that Goulet, but no mention of my commissary donation!! by the way, since the last time i posted, we lost two more airlines. Fronteir, and i forget the other. that's six in two weeks. thanks for posting info you consider useful for my argument. i don't want air dominicana to fail, but people must understand that optimism is not in the conceptual toolkit of project analysts!

The airline business is not just for the well meaning start ups, this environment is the most challenging because all around us people are having the toughest time with disposable income (the money left over after you have paid all your responsibilities and bills), that is, people are not overspending and are cutting back all that is not elemental and first priority in their lives. Just recently Frontier filed for Bankruptcy protection indicating that First data kept a larger percentage of the ticket purchases people made in reserve and anticipation for when First Data would have to reimburse the passenger if and when the airline was not able to honor its flights. All screws and bolts are being tightened on businesses. Consumers are not spending, and when they are, they are looking for rock bottom prices.

Their razor thin margins being the norm could not withstand those pressures, and lets not even get started on the creditors, who are not making capital easy to come by, not even to municipalities, who see that their rates for loans have gone up (the price of money/ perceived risk) and are being squeezed and they are not like the Federal Government who can just print more money. Those realities swallow also the dearest of feeble business-THE AIRLINES. Some have gone belly up did nothing wrong, The fact is that other were better prepared for this crisis. They were just victims of the imbalances in market psychologies and of THE real material costs.

The cost of doing business keeps going up, so the operating margins are being evaporated from all business, but more so from those that provide nonessential services and goods. Traveling unless it is for business is nonessential. All travel will suffer that is to say that even the person cleaning the sands at the beaches in Punta Cana who earns about US$1.00 / hour (perhaps) is going to be squeezed, you can imagine that the food quality will take a hit, and that the hotel operators will enter a price war as well competing both nationally and internationally, now more than ever. That is the game of survival, and it is being accentuate today*** more than yesterday. Airlines did not foresee the decline in consumption of the product they offer, and did not foresee the rapid rise of the fuel cost.

Suffice it to say that counties and cities are under treat of bankruptcies. Just Google key words: towns or city with bankruptcy and it is scary. I don’t see this airline starting up during this financial storm. They have some serious market contradictions that do not favor a startup. They may make more money by not starting costs and operations than to endeavor in this market. This brings me to an interesting questions, what then to do with capital in The Dominican Republic TODAY. What are better ideas in putting capital to work-aside from loan sharking? This is a question all can contribute without fear.

Luis1600, you have said it all, my friend. unfortunately, optimism is not a component of the analytical calculus when viability is being analysed.

Dude, I was reading up on Juan José Hidalgo, the President of Grupo Globalia and Air Europa. He seems to be one tough cookie and not a joke. He is at the top of this Air Dominicana venture. I believe the Government is going along for both show, merit and to give us all a feel that this is in some way the incarnation of the airline which we treasured and hated when it left our luggage behind-Compañia Dominicana De Aviacion.

However other Airlines also seek to begin operations, while others are fresh from closing their operation in and about the Dominican Republic. Add Sol Dominicana Airlines and Merengue Airline Dominicana to the mix of starters to the worst market ever, and we have a showdown of multiple dimensions.

Back to Mr. Hidalgo, perhaps he is loaded which can only mean he is testing the waters with the Caribbean venture. However, a loss is a loss is a loss, and if having capital means deep discounts then the public will feast. In retrospect there is experience in Juan Jose Hidalgo and that is the best argument for Air Dominicana at this time.

On another note, I have been to Punta Cana twice in the last 2 years and I flown for 8 nights, All inclusive and before taxed it was $599.00. I considered my stay, the setting and the food all free given that that is about what people pay to fly to Republica Dominicana half the time.