STARTING AN

AIRLINE
 WHY NEW AIRLINE FAILS?

AIRLINE
MANAGEMENT
TEAM

EITHER
IS LACKING FAIL

CAPITALISATION
 THE BASICS

an idea / dream / vision / niche market

solid aviation business plan

experienced management team

more than adequate funding

certification

aircraft selection

suppliers

The Idea


It will no doubt change and develop over time
but it's your starting point and the reason you
have made this undertaking.
 Business Plan
POOR
BUSINESS
NO PLAN
NO NO
BUSINESS
FOCUS AIRLINE
PLAN

Unless you have unlimited resources, this document
will be the most important element of your start-up.
− A well written and presented business plan will
attract interest from potential members of your
management team, investors and suppliers
(Aircraft Lessors, CAA/FAA, Airports etc.).

Management Team


Depending on your current experience and
situation, you will need to gather an
experienced management team, some you
will bring on board straight away, others will
join along the way.
− Assume your airline management experience is
limited, therefore, you will need to bring
someone in who will have the necessary
experience to take your airline from an idea to
take-off.
− Also, any potential investor may well want to impose their
own personnel on you in exchange for their cash!

Funding


Unless you have unlimited funds you will
need to find investors, which is a challenging
undertaking. This is particularly true in
today's market, where investors view the
airline industry as a long-term high risk
venture.

Once your business plan is ready, you have a only a
small window of opportunity to raise the initial
investment, especially if your target market is
seasonal and operations need to start by a certain
date. Otherwise, it could be another season before
you start and by then another airline may have
filled your market!

Where to find the money?


this can be raised through different sources,
such as investment houses, banks,
government & local grants and individuals
(wealthy ones of course!).
− An Initial Public Offering (IPO) should not be
considered by a start-up.
− Try to keep the number of investors to a small
group.

A.O.C. Certification


Aviation certification - Air Operator's
Certificate (AOC) - primarily exists to ensure
that the methods and procedures undertaken
by all operators of commercial aircraft meet
minimum safety standards, as defined by
each government Aviation Authority (CAA or
FAA etc.).

You will need to contact your countries regulatory
body to see what is required for your airline. Most
countries require that a minimum safety, financial and
ownership rules are met and adhered to. Certification
can take between 9-18 months to achieve, from initial
application to receiving certification.

Aircraft Selection


A major step in your aircraft selection
process is identifying the needs of your
intended routes (airfield characteristics,
ETOPS etc.). Issues such as capacity
(passenger & cargo), utilisation and range
are all factors in your selection. In addition,
engine type may also play a role in your
airframe selection.

Another issues to take into consideration is
regulatory, such as noise, airframe age and let's face
it... certain types are just not welcome anymore!

Suppliers


Another important group that you may need
to target your business plan towards are your
suppliers... aircraft lessors and airport
authorities. For other services you may need
a line of credit, such as fuel suppliers, FBO
stations, maintenance facilities etc.