start me up is a consultancy service that brings together the crucial elements necessary to launch a successfully operating airline.
Developed by Airbus’ dedicated professionals and based on wide knowledge and years of international expertise, the ‘V-plan’ is the driving tool for entrepreneurs towards an airline launch. The ‘V-plan’ is a 17 step road-map that will guide investors and entrepreneurs form the ‘airline idea’ stage through to the ‘take-off’ stage, with the crucial half-way ‘go/no go’ check-point.
The project feasibility step will determine whether the basic airline idea could ‘fly’. A
preliminary study is undertaken to establish the viability of the investors or entrepreneur’s
idea. It will examine the proposed market, the growth potential, existing competitors and
prevailing market dynamics. If the idea passes this initial feasibility test, it is carried over
to the business planning stage.
In modern airline management, there are a number of different formats for a
successful and practical business planning and airline launch. The formats that we may
recommend to our clients will largely depend on the complexity of the organization,
products and services, and on those that will consider and use the business plan; e.g.,
investors, founder, management, Board of Directors, etc.
A generic format of the business plan includes:
The most significant part of any business study is proper market analysis with
forecasting and recommendations. The Airbus Global Market Forecast gives a broad
analysis of the global traffic developments and year-by-year fleet evolution of the world’s
largest aircraft operators. It also focuses on the demand for passenger cargo aircraft over
a certain period.
One of the key drivers of a successful airline is its network and schedule. The
business plan will determine the optimal model, whether hub and spoke, point-to-point,
feeder, charter, etc. This will be used to determine the network strategy - routes,
frequency, aircraft type and aircraft capacity among other factors.
Analysed in parallel with the network and business model, will be the aircraft fleet for
the new airline. Airbus offers a wide choice of aircraft suitable for every airline concept
and network; domestic, regional and long-haul. The aircraft evaluation step will examine
the aircraft costs, revenue, capacity (passenger and cargo), performance, technical fit and
profitability.
Commercial aviation industry of the last couple of years has gone through cycles of
both positive and negative commercial trends, with many uncontrollable factors exerting
massive pressure on operating expenses and costs. These cycles have allowed some
carriers to achieve great prosperity from the situation at hand, thanks to their pragmatic
and innovative approaches to modern airline business practices, while others have taken
their toll; substantial financial losses were reported, including bankruptcies - some
carriers were even forced into liquidation.
Fortunately however, people will always fly; likely more and more. As the individual
state economies open to the global market, so will the need to for quality and safe air
travel across the meridians. Finding the right business formula while carefully controlling
the financial aspects of the operation should ensure that new and existing airlines continue
achieving their passengers but also shareholders objectives, even during difficult times.
The progressive deregulation of the aviation industry in most countries for example,
opens many new opportunities to entrepreneurs with multiple airline concepts and models
to choose from and implement.
The current business models are (non-exclusive):
Financial analysis refers to the assessment of the economic viability, stability and
profitability of the future carrier or aviation venture. This detailed analysis will help the
investors or the entrepreneur decide whether to progress with the business model and the
materialization of the idea, or invest funds elsewhere.
A detailed financial plan will be built outlining the following elements and providing
the entrepreneur with the expected level and length of return on investment:
By this stage, the new airline project will reach a vital crossroad - the Go/No Go
decision. Principals will need to decide whether the levels of profitability forecast and the
level of risk foreseen will merit the investment they are about to make.
If the answer is affirmative, start me up moves forward with concrete plans for
setting up the airline. An exciting, yet long and tough road now lies ahead before the first
passengers board and first flight leaves the runway. A period of intense research, analysis,
planning and consultations will lead to the ultimate goal – a successful, stable,
competitive and growing new airline.
However, if all conclusions point towards a negative outcome, investors and
entrepreneurs can rest assured that the minimal investment made during the business
evaluation of their concept and idea, was money well spent; more importantly, the
“saving” they achieved as a result.
Choosing the right aircraft type is another critical part of launching a new airline. The
evaluation process of the business plan will recommend the best aircraft type for the
particular airline concept; capacity, cabin layout and cost/profit levels as well as acquisition
options. At this stage, investors and entrepreneurs should concentrate on the process of
acquiring the aircraft and securing delivery slots for new airliners. To learn more about the
Airbus aircraft family, please click on the links below:
Certain business models may recommend the acquisition of used aircraft or acquiring
aircraft on lease – either prior to new aircraft delivery or as an initial soft-launch approach.
Airbus can assist new airlines in aircraft sourcing, acquisition and delivery management.
The customer will be provided with comprehensive reports on aircraft conditions -
including value assessment based on aircraft market value, maintenance records history,
documentation as well as physical inspection reports.
The Air Operator's Certificate (AOC) in a JAR-OPS environment (or Air Carrier
Certificate in the US) is an official document issued to an airline by the state civil aviation
authorities. This certificate is crucial and mandatory for any airline business – it also
affirms the airline’s competence and readiness to conduct safe operations in a well-
organized and planned manner, clearly defining responsibilities in various key posts within
the company.
The possession of a valid AOC is one of the main legal requirements for any new
airline before it can obtain an operating licence. Regulative authorities will at this stage
closely scrutinize the business plan that we discussed earlier.
Furthermore, the regulators will seek to meet and approve all the post-holders of the
new airline. Attention will be given to the level of practical airline experience each post-
holder has and the familiarity with the latest safety and operating practices.
Depending under which authority the operations will be conducted, a series of
manuals will need to be compiled and produced and submitted for approval during the
AOC application process. These include:
Operations manual
Safety manual
Ground operations manual
Maintenance manual
Security manual
Performance
Weight and balance
Minimum equipment lists
The start me up team offers its expertise in managing the entire AOC application
process together with the airline principles; from meeting the authorities, compiling the
manuals and ensuring compliance with international laws and regulations as well as those
of the issuing state, to recruiting the key post holders and evaluating the competence and
expertise of the existing team members.
Without the right people, a good business model and plan is doomed for failure.
Recruitment must be a strategic process that brings the best people into the new airline. It
is fundamentally important that candidates and future team members are carefully
selected, based on what they will offer the company; their skills and ability to accomplish
goals and objectives of the management, attitude, experience and drive for success. The
chosen candidates will be the key asset of the new airline and will directly impact several
crucial factors including morale, motivation, respect, retention, quality of service projects,
relationships with partners and the community, funding and investment and general ability
to successfully deliver plans and growth goals and development.
Business capitalization stage is defacto the financial planning stage of the airline in
formation. It details the financial requirements and the potential of the business
opportunity. The plan will elaborate the anticipated start-up cost, operating expenses and
the profitability potential among others. The financial plan is also crucial in identifying and
quantifying the financial requirements for starting the operation, as well as the allocation
and control of funds and funding thereafter.
Airline operations are heavily dependent on human capital, therefore choosing the
right team is decisive for launching and maintaining a successful aviation business.
Nowadays, when quality of services is the most powerful instrument of
passenger retention, repeat business and sales in general, staff satisfaction and corporate
stability is seen as a vital factor in any successful business. Stability can be achieved by
proper human resources management and forward planning, including the allocation of
funds for competitive salaries and packages, perks and benefits, social and personal
security etc.
Adequate and quality business facilities are another important element of a
successful airline operation. The start up airline should project future staff requirements,
sales office requirements, crew rest and training facilities, maintenance and storage
facilities, equipment and transport among others.
The Operations Plan stage describes the physical necessities of the business
operation, such as the physical location, facilities, staff, equipment, etc. Depending on the
chosen airline concept (scheduled/non-scheduled passenger or cargo airline, low-cost
airline, VIP charter operator); it may also include information about inventory
requirements and suppliers.
By combining the extensive resources of Airbus and its companies with specialised
aviation recruitment consultancies, start me up will help the new airline build-up its core
management team with the finest candidates available – who will in turn work towards
filling the rest of the functions of the organization. This stage will focus on:
The important tasks of setting up the airline will be handled by a number of senior
and key post-holders within the new organization. During the AOC process in particular,
the following departments will need to be established and productive:
The process
