How To Start An Airline. Get your aviation business airborne

Hello, my name is Ben Lovegrove and in this
video I’m going to talk about starting and running an airline. For some with a keen interest in aviation
starting and running their own airline would be the fulfillment of a long held dream. If you’re obsessed with aeroplanes what could
be better than running a business that involves flying passengers and freight. The satisfaction of seeing your fleet (even
if it’s just one aircraft) and knowing your company is making a profit must be immense. But as we’ll see starting an airline is far
from easy, and running an airline, making a profit, and maintaining momentum over several
years is harder still. Obviously, in a short video like this it won’t
be possible to cover all the aspects in detail but we can take a very high level view of
this idea. A Brief Look At Airlines. The word airline conjures up images of fleets
of aircraft that cost tens of millions each to buy and operate and which fly intercontinental
routes. However, some airlines consist of one or two
small aircraft flying in-country with a small team of pilots and administration staff running
the show. For example, the Austrian based People’s
Viennaline once had a fleet of just two aircraft. One of its routes used to be one of the world’s
shortest, with a flight lasting just eight minutes. They flew passengers from St. Gallen-Altenrhein
Airport, Switzerland to Friedrichshafen Airport, Germany, thus saving them from a 77 km road
trip around Lake Constance. However, the route has since been withdrawn
and the airline has rebranded itself as simply ‘People’s’. This is an example of how airlines have to
quickly adapt to changes in demand if they are to prosper. Airlines are launched for a variety of reasons;
someone spots a gap in the market, an obvious need, or just has a new idea. If you’ve read Sir Richard Branson’s autobiography
you may be aware that Virgin Atlantic Airlines exists today due to an idea he had in 1984. Branson was in Puerto Rico airport about to
fly to the British Virgin Islands when the flight was cancelled. So he hired an aircraft and wrote “Virgin
Airlines” on a blackboard, then invited other delayed passengers to pay $39 for a seat to
BVI. It wasn’t long before he had sold every seat
and the idea for Virgin Atlantic Airlines was born. But this one rare example of a good idea developed
by someone who had the capital and drive to see it through. Market Analysis & Research. There is little point in starting any business
without first doing the market research. To do so is a gamble with the odds stacked against
you. Comprehensive market analysis will reveal
areas that it might be possible to exploit – put simply, a gap in the market. Your market analysis should reveal the anticipated
growth in passengers and freight in any given region. From this you can determine what type of aircraft
would be most suitable to meet the expected demand. For example, most of the routes from one capital
city to another are full and competition is fierce. However, there may be opportunities from regional
airports feeding the major airports, or routes from one regional airport to another. Regions and Environments. Having worked out where there is likely to
be demand your next task is to research the regulations, standards, and procedures for
any airline in that region. Remember that these regulations will apply
whether you fly one aircraft or one hundred. The aviation industry is highly regulated
so being aware of all those that can affect you is essential. As well as local and regional regulations
you’ll also need to know your own rights, particularly those pertaining to the nine
Freedoms of the Air. These were formulated and agreed at the Chicago
Convention in 1944. The Business Plan. Now you’ve identified a demand that needs
to be fulfilled and you’re familiar with the operating regulations in the country in question. Next comes your business plan. This is another
vital task that will take a considerable amount of time and effort to complete. However, it’s essential not only so that you
have a plan to implement but so that you have a realistic plan that you can share with potential
investors. You may have seen the BBC TV program called
Dragon’s Den in which entrepreneurs pitch their ideas to a panel of business gurus with
the hope that they will be persuaded to invest in the business and mentor the business owners. These attempts frequently fail because the
business owners have not done their homework and cannot recall key figures from the business
plan. Your airline’s business plan should cover
everything; from the identified opportunities to brand development, from risks and obstacles
to operational procedures. It should conclude with an investment figure
i.e. how much money you’ll need to get this airline off the ground (pun intended). Sourcing Your Aircraft. With your business plan complete and the capital
in the bank it’s time to start implementing the plan. The first task is to acquire your aircraft.
This is the bit you’ve been looking forward to! There are several options for financing the
aircraft and which you choose will depend largely on your business plan and capital. Most new airlines lease their aircraft since
there is a glut, with many in storage. Companies that own these aircraft have to
pay for the storage and insurance so they are keen to lease them to operators. There are several types of lease, wetlease,
operational, or financial. If you have enough investment you can buy
your aircraft outright. Get Certified. In order to operate as a airline you’ll need
the appropriate licence from the aviation authority in the country in which you intend
to operate. For example, in the UK you’ll need to obtain
an Air Operators Certificate from the CAA. This process may take several months and you
cannot operate legally without it. So it’s a process that needs to be built into
your project plan. You’ll also need a 3 letter code from the
ICAO which will be used to identify your aircraft to air traffic controllers. Getting Up & Running. So now your aircraft are on the apron, you
have recruited pilots to fly them, and all the other staff required to run your business. You have routes to fly and either passengers
or cargo to carry. For the first few months you’ll eat into your
capital as you pay all your overheads and running costs, including salaries for pilots
and all other staff. Your business plan should have given you some
idea of how much money you’ll need to reach each milestone. But no matter how good your forecasts, in
aviation the chances are that you’ll need more and more. Aircraft don’t earn any money if they’re on
the ground. However, now that you’re operating you can
start invoicing for freight or you’ll start earning from carrying passengers. Your next task is to keep your aircraft flying
with full cargo holds or occupied seats. If it works then you can start considering
expansion but don’t move too fast. Your investors will be expecting a return
on their investment and it would be a shame to ruin your business’s prospects by expanding
too rapidly. You’ll still have a lot of running costs including
maintenance and spares for aircraft, salaries, fees, taxes, and so on. Conclusion. Given the difficulties in starting an airline
it’s surprising just how many are launched each year. In 2017 for example, 79 new airlines were
launched globally but 25 went out of business. Aviation is a constantly evolving industry
and there will be more gaps in the market to exploit by those watching and ready to
move into action when they appear. A new small airline due to launch in 2019 is Firnas Airways.
The idea and development of this airline was the subject of a Channel 4 documentary in
2018. It plans to operate a charter service based at Oxford (Kidlington) Airport using
a BAE Jetstream 31, which has 19 seats. So 2019 may be the year we see a new airline
operating out of the UK. Thanks for watching. If you found anything
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8 thoughts on “How To Start An Airline. Get your aviation business airborne

  1. Need to think of any smaller business or productions related to Aircraft and grow it bigger eventually, i believe there are many other options in this vast and expanding airline industry.

  2. Ben lovegrove I like to start my career in this industry for that I done in aeronautical engineering so pls help me too get job in this industry

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