Airline Creation

[chrisy08]

This may sound a very silly question however I am interested to know... What is involved and how would you go about creating your own airline like BMIBaby, Flybe etc etc??

Im not exactly going to create my own airline, but i'd be very interested to know how you start it off, how much it costs etc.

:ok:

[robo283]

1. Find a backer with shedloads of money to burn.

2. Go to a manufacturer (try Airbus or Boeing, though this list is not exhaustive) and choose a few aircraft of about the right size. Reasonably large is a good start as you won't have many a/c to start off with so you need as many seats as possible. Second hand is also a possibility.

3. Find somewhere handy to base them (they will need to be parked somewhere when they aren't flying). At the moment you might want to try Durham Tees Valley or Doncaster-Sheffield-Barnsley-Rotherham Friar Tuck International as there is loads of space.

4. Find somewhere to fly to. See where is popular from other airports, is within range of your aircraft, and isn't served from your base. Try Tenerife, Palma or Malaga in Summer, Geneva or Munich in Winter or city destinations such as Paris and Amsterdam all year round. Forget about Heathrow, it's full.

5. Find a catchy name. Avoid the needlessly humourous, anything too grandiose or any reference to Beans. No one will take you seriously.

6. Get some crew. Drivers are hard to come by, cabin staff are slightly easier to recruit and train. Try a wet lease package.

7. Sit back and watch the money roll in.........:ok:

[niknak]

It's difficult to give an off the cuff figure, but the region of £millions comes to mind.
In the first instance you have to form the company, get approval from the CAA to operate, source you aircraft, lease them and pay a bond up front, employ a few but very expensive specialists to recruit and train pilots, cabin crews and engineers, do your marketing and constantly monitor what the competition is doing.

All that has to be done before you have earnt a bean.

Just take our word for it, even for the smallest of operations, it's very seriously expensive and even in the best economic environments, few attempt it and even fewer succeed.

[chrisy08]

Where exactly would you find a backer who would be willing to back you. Its like going to Dragons Den :sad:

Yep I understand that their would be alot involved to even create the airline because before anything you have to get license from CAA.

Thank You for the info you have given.

[TwinAisle]

This might help...

You can forget going down the bank route. Banks don't lend vast sums to start ups, especially in the current climate, so you'll need large equity based investors, or a pre-launch IPO.

Right now it is an excellent time to do this, provided you can convince your backers that it is an excellent time!

You won't even get to know how much money the authority will need you to have in place (before they grant you a licence) until you prepare a business plan that shows, over a two year period, how you intend to run the airline. You'll have to show proof of lease costs, fuel costs, salary estimates, passenger forecasts, yield forecasts, fuel burn and route charges - and and and and and....

And after you have completed your plan, the CAA will take a very hard and objective look and tell you how much money they will want to see in your bank - and I have never seen them put your estimate down! Remember, their cash requirement, based on their assumptions not yours, will be drawn on the basis of looking at the lowest cash position on your forecast, and making that equivalent to roughly three months worth of costs, assuming no revenue... so not a small amount!

I would propose the following:

1. Work out your USPs;
2. Produce a two year plan, with cash flows, P&L and balance sheet projections;
3. Gather all the proof (not supposition) you can about your plan;
4. Get all your postholders in place (and pay them), making sure that they are all acceptable to the CAA, then apply for your AOC;
5. Start producing your manuals for CAA approval;
6. Apply for your operating licence (another cheque, btw);
7. Work with the CAA to reach a concensus about your cash needs;
8. In the meantime, set up your reservation systems, ground and airport contracts, fuel contracts, payment engines, aircraft leases, emergency comms plan, base and line maintenance providers, quality systems, safety management systems, and talk nicely to IATA in Canada about getting your two letter code;
9. Go and raise the money that the CAA tell you you need, and get your forex and fuel hedging policies in place;
10. Pay your deposit to the credit card companies, so they will give you your merchant numbers;
11. Build your website, and test it. Then test it again, and again, and again - stress test it, security test it etc etc;
12. Sign agreements with all your ancillary revenue providers; car hire, hotels, insurance; dynamic currency converters, car parking, lounges etc etc;
13. Design and purchase uniforms and a corporate identity;
14. Develop all your flight and cabin crew training programmes, and start recruiting your team;
15. Recruit your marketing, commercial, and revenue management/protection teams;
16. Get engineering reviews on your new fleet, and get the leases signed;
17. Get asked by the CAA to test fly - do that successfully and then get your AOC issued;
18. Get your operating licence issued;
19. Start your marketing and PR efforts, and go on sale;
20. Do something else for three months whilst you presell your flights - do some ACMI for someone else, or some charters;
21. Get your magazine produced;
22. Get your caterers signed up;
23. First flight..... and then the hard work starts....

Still want to do it?

TA

[xtypeman]

TA

You forgot to get your form 4 postholders approved by the CAA

XT

[Ballymoss]

You forgot to get your form 4 postholders approved by the CAA

No, he even got that in!

4. Get all your postholders in place (and pay them), making sure that they are all acceptable to the CAA

Now, who would be stupid enough to bother? As the saying goes, 'want to make a million in aviation, start off with (any figure significantly in excess of that)'

Rgds
The Moss:ok:

[chrisy08]

TA,

Thank you for the amount of information you provided me with.

Yes, it would be very good. If im honest, I thrive on challenges and it would be an amazing challenge. Would just have to find an investor :bored: hard enough to start with :sad:

C-08

[MUFC_fan]

I think the best example to look at (at the moment) is Manx2.

There is a debate as to whether you can class them as an airline. Some say they are a 'ticketing agent' as they have a fleet of ACMI aircraft whic operate their routes.

However, if the company decides where to fly those planes to and from, what prices it sets and who it flies I consider it an airline.

The company basically met the requirements of the CAA and leased in their aircraft. They probably did it the easiest way in that they handed most of the work over to the ACMI companies and saved themselves a fortune on CAA bills in that they do not currently have an AOC and own none of their aircraft.

At the moment they seem to be doing well and with over 60% of their passengers on business and flying camals for aircraft they are not seeing much slow down on their business during the economic slow down and rising fuel prices, or atleast not from where we are standing.

If you wanted to look at going into something like this then the boring answer is to go into an airline and work your way up, learn the trade and come out of it with a lot of experience, contacts and a clear idea of what you want to do.

But as I said, that is the boring idea - just going out there and doing it soud much more fun!:ok:

[PPRuNe Pop]

This is a subject covered many times before.

Further info is available by using search.