The issue of airline startup is very complicated, it is manage by a huge aviation consultant companies and airline manufactures such Boeing and Airbus. that customize the results to fitted to their interests and products, off course their aircraft are the best in the world but when the airlines falls to make a profits, then it become a management issue, so either to make good start for new established airlines or implement turn around program for existing one.
Youth Involvement in an Innovative Coconut Value Chain by Mwalimu Menza
Airline Startup
1. The issue of airline startup is
very complicated, it is manage
by a huge aviation consultant
companies and airline
manufactures such Boeing and
Airbus. that customize the
results to fitted to their
interests and products, off
course their aircraft are the
Mohammed S. Awad best in the world but when the
Research Scholar airlines falls to make a profits,
then it become a management issue, so either to
make good start for new established airlines or implement turn around program for existing one.
So to make a good start for an airline both manufactures lunch an outstanding teams to facilitate
the starting up phase, they do that as they care about their brand name ( Boeing or Airbus ), so
they want to ensure that the airline industry business is healthy in spite of the tight margin of
profit. Everyone has its own way for analysis of starting up of airline, we are going to address
road map by Boeing , start me up by Airbus, one from airline industry, and finally a new
approach that based on the airline inputs only.
1- Airbus Approach:
The Start Me Up V- Plan
Both approaches ( Airbus and Boeing ) started
by Airline Idea, the first thing what type of
service we want to deliver, is it Legacy Airline,
Hybrid, or LCC (Low Cost Carriers) and what
business model to follow, what are the trends
and the potential in regions/market, can we
capture the proposed share, then a business
plan should be set up, when the financial model
shows a positive signal in first year or may be
later ( two years ), the business plan should be
minimum for 5 years operations, this should
include network structure, aircraft selection,
and operating model, whence the business plan
in hand, then we secure the aircrafts, and
involve in AOC process, recruit management,
business capitulation, facilities staff
operational plan, departments setup, and
takeoff.
2. 2- Boeing Approach:
Startup Boeing - Roadmap
Also Boeing started by Airline Idea, as
mentioned previously, the steps are more
explore by Boeing, as General Industry &
Competitive Analysis, Target Market
Analysis and Service Offering, Route
Structure Development, Schedule
Development, Market Strategy and SWOT
Analysis, Aircraft Evaluation and Fleet
Planning, Market Share (Revenue)
Forecasting, Operating Plan (Expense),
Financial Model Development,
Development, Management Team
Recruiting
That most of steps mentioned by Airbus,
the new thing is the Business Plan Development Iterations, the model can be adjusted to meet the
demand and get right picture of business.
Whence the investors are comfortable, the process can be extended further to Business
Capitalization, Airline Operator certification, aircraft sourcing, staff/Facilities and Inter into the
Service.
3- Airline Industry Approach
Most of consultancy firm follow two stages
approach e.g : (www.eagleconsulting.aero) in
the following outline:
- Planning
o Concept Formulation
o Feasibility Assessment
o Business Plan Development
- Implementation
o Implementation Planning.
o Funding Soured
o Management Recruitment
o Air Operating Certification
o Aircraft Sourced
o Operational Set Up
3. 4- U curve Approach:
Based on my experience and published research
papers, airline can be define by four categories
i.e Demands, Fares, Distances, and Cost.
Which developed the optimum operating curve of the
proposed network of airline startup.
Further my current concern is to address the
feasibility parts of Airline Startup.
The approach started by Airline Idea, i.e LCC,
Hybrid, Legacy, or Network airline.
Another issue is market estimation – Demand
forecasting either on the existing network, or
establishing new destinations.
The basic analysis formula is
The model constructed by Five main parts
1- Developing Integer program
2- Implemented U curve technique, and
3- Defining Optimum operating curve
4- Setting Optimum Fare strategy
5- Improve route profitability
The new concept in this model is how to
define the right aircraft without the interface
and guidance of the manufactures, and it
follows by benchmarking study to position the
right cost to right the business model based on
airline ( Fleet/Aircraft) input.
Conclusions:
No doubts about the facility that offers by manufactures, but definitely that analysis will be
biased, sure we will not get any manufacture analysis support the other competitor manufacture
argument. That why a third party should be involve in process of airline startup. While for U
curve approach, it relay on the airline side and information that reflects the optimum operating
curve and with benchmarking study we can position the other operators cost on line to utilize
their operating experience in our figure which gives a correct picture about the business to use
the right size of Aircrafts for proposed network.