8 things to ponder before starting an Airline!


3 min read
29 Apr
29Apr
  1. Well informed facts & figures - Airline business is growing worldwide at a rapid phase. So there are enough opportunities for the birth of new airlines. Well informed facts and figures starts with identifying the real purpose. For example starting services to small and secondary airports in a certain country and connecting with a main airport can be recognized as a real need. This need supports the purpose of the travellers to have the ease of taking a plane from their hometown rather than having to take the trouble to travel by road or train to a main airport. People living in big countries such as Russia, China, Brazil and India will consider this type of an airline as a great value to their growing travel requirements. Another fact is identifying the demographical and geographical relationships which exits among the cities you want to air connect. Understanding the local culture, business trends and relationships provides great knowledge about the airline potential customer base. This geo local knowledge will help designing the airlines' marketing strategy and personalization of service delivery activities.
  2. The ideal aircraft - Many start up airlines have achieved negative business results by selecting the aircraft first without giving enough attention to the route plan. Introducing the wrong aircraft when starting a new route can be disastrous. It is important that once the airline management defines the route plan the ideal aircraft is selected. The break down of the aircraft cost is extremely essential and must be looked at from a multi dimensional analytical point of view. It means that the costs must be broken down to an itemized level per each segment. Thorough study on the segment costs and revenues over seasonality and time provides great confidence and visibility on the route which must be done atleaset for 3 years in to the future. One must use different type of aircrafts in this study and conclude the ideal aircraft which gives the best value on the investment capital of the airline company.
  3. Industry knowledge & experience - Most Start Up airlines have failed due to lack of industry knowledge & experience at the higher management level. As a result millions of dollars have been lost in vain. The answer to this challenge lies in sound industry knowledge. Airline business can be very complicated at times. That is why a start up airline need people with sound industry knowledge in all departments such as Commercial, Operations, Safety and Quality. A successful airline is only possible when all these departments functions as one in complete harmony. Having people in these departments with proper industry knowledge and experience enables the harmonious functionality. 
  4. Be ready to be different - Start up airline must embrace the culture of being open minded and doing things differently from the very beginning. For example the airline may be established with a culture of remote working for its employees by the use of advanced technology. Or it may be that every employee is entitled to own shares of the airline. The airline opens more doors towards sustainable profiteering by having a business model which has clear goals on creating value for the society. The airline may have a methodology to capture their value creation excellence in the same way they capture the figures on monetary returns. It is very possible for an airline to have seminars on air, deliver personal development courses while people fly.
  5. Partner selection - Whether it is going to be an IT services provider or an individual as a consultant it is essential to focus on establishing the right partner relationship. Example: There are many companies who provides different IT applications for airlines. Among them selecting big players with well known brands might not be the most suitable for a Start-Up airline. One of the reasons can be the high costs which you pay only for their name. Secondly a fresh airline with fresh concepts of service delivery can find it difficult to customize certain system functionalities with big companies. Sometimes a smaller company can provide a Start Up airline a more dynamic, versatile and flexible system functions to retail its products and services. And these companies can charge you very little or no charges and less waiting time to process change requests with prioritized attention compared to big companies with big names.  
  6. Networking - Knowing the right people, right companies is a fresh breath for an airline Start-Up at all times! They are the ones who strengthen and nurture a new airline company from its birth. They provide the airline with great facilitation to get things done. It can be an approval from the local Civil Aviation authority or a ground handling partner who will compromise on their rates investing in the promising future of the new carrier. Maintaining the right relationships reward the airline with possibilities and opportunities to steer the business forward.  
  7. Revenue Management & Pricing - An Airline Start-Up without a revenue management & a pricing strategy is like a robot without AI. Dynamic revenue management applied with design pricing principals provide the start up carrier to bundle and unbundle their products and services, get the appropriate pricing charged for the value being offered. The dynamic approach towards pricing and revenue management backed with analytics will tell the airline to sometimes lower the prices to or sell more ancillary revenue products or services on particular flight to achieve more profit. RM and pricing is the intelligence which drives the airline towards sustainability and optimal performance.  
  8. Customer First attitude - Defining a great customer service strategy comes right after having the idea of starting an airline. The whole thinking should genuinely create a definite purpose on serving the customers well. It can be your local travel agent or someone who is flying for the first time. Mapping the customers journey imaginatively and delivering quality service at each touch point of the customers life cycle is way to win their loyalty. Having the correct technological tools becomes very essential in this pre planning process where the new airline thinks how to serve their customers exceptionally. Kindness, open mindedness, sincerity, undivided attention are some of the qualities where the airline has to cultivate from the start. The good thing is that there are enough people and great technology in today's world where the airline can get help to rise and shine in terms of customer first ,data centric attitude.


Want to learn more on starting your airline?

At JJ Ship Equip Agencies airline division, we provide personalized consultation on airline start up projects. We are able to spread your wings in the air very fast! We are able to plan and manage all technical, commercial and operational activities for your brand new airline.

Email us, service@jjshipequip.com for a free initial consultation on your Airline Start-Up project!

Connect with the author on LinkedIn,

https://www.linkedin.com/in/dinesh-l-hapuarachchi-jjshipequipagencies/


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