7 Steps to Start an Airline
Introduction
Have you ever Googled “how to start an airline” and the first result appears on a page on Boeing’s website? For starters, Boeing does not claim that it is easy, nor do many other companies.
Running a profitable airline is even more difficult, and the process requires constant learning and adaptation, whether you start an airline or establish yourself as an industry leader.
Similarly, the first result when searching for defunct airlines is a convenient Wikipedia entry entitled “List of defunct airlines. The list is divided into categories according to the size of the list, and it is full of companies that sold passenger jets, such as Boeing, General Electric, Boeing Co. and General Motors.
If you can’t come to terms with it, here are a few things to consider and familiarize yourself with when you start. While low-cost airlines can invent and reinvent other sources of revenue, the most important factor for an airline is a bone-level load factor.
1. Load factor
The load factors are one of the most important indicators for determining the profitability of an airline.
In the current climate, 80% is accepted as a comfortable load factor for an airline and it is measured by the number of passengers on the flight that the airline operates. In other words, you should occupy at least 80% of the seats before departure and be occupied by 80% -90% of the passengers in the seat next to you. The seat and seat belt are what passengers are entitled to when buying a ticket, so they are the most important factor in their load factors.
2. Ancillary revenues
There are two types of seat belts, one for passengers entitled to purchase tickets and the other for the crew.
Everything else is fair game, such as the number of people in the seat next to you, the size of the seats, and the length of the seat belt.
For an example kulula, which has expanded its lines to include seat stretching zones, offering three to four inches more legroom for the price of $100 (100.8 euros). It’s also a great opportunity for budding airline managers to flex their creative muscles. If government funding or a bailout is not an option, the money that comes from the extra benefits can help the airline boost its profits. There must be a balance between operating costs and benefits for the customer, such as better service and customer service.
3. Fuel
Many airlines buy fuel in large quantities to protect themselves from price increases, and kerosene is bought by charging passengers a fuel surcharge. Fuel surcharges are in addition to the taxes on tickets and can result in tickets becoming more expensive than basic fares.
If you buy fuel in US dollars, the exchange rate can have a devastating effect on your profits. If you stock up on fuel before prices rise, you win, but if you buy before the price falls, you lose, so it’s a gamble.
4. Fleet maintenance
It is part of the operation of an airline to ensure that your aircraft is safe for your passengers and complies with CAA safety regulations.
There are also other expensive costs for doing business – your aircraft need maintenance and you need to pay a third party to do that maintenance. You must meet agreed deadlines with payment organizations.
5. Suppliers
SAA Technical is a great way to diversify your business and operate in a more competitive market than a national carrier you are not founding. If you do not set up a national airline, you pay for all maintenance yourself.
Otherwise, your flights could simply leave the ground, and that means a loss, customers get angry and you have to pick up the pieces of the resulting bad publicity.
6. Distribution
A good start, however, is to set up a dedicated website where customers can easily book and manage their bookings. Have a simple interface and behave like an airline that sells its seats to meet the aforementioned load factors.
7. Personality check
CEOs tend to have flamboyant personalities who love the media, no doubt about that, but successful airlines are not flagships. If you think Leary of Ryanair is a great example of a successful airline with a flamewar CEO, take a minute and think for a second. Successful airlines don’t have to be brand ambassadors, they just have the right mix of marketing, customer service, and customer experience.
When you reach the level of a wayward airline owner, you are dealing with unscrupulous rivals who are doing their utmost to wipe you out. If you’re bored, don’t even try: the utility costs you charge never seem to bring huge profits.