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AirlineStartup

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MohammedAwad,AdenRegionalDirectoratYemeniaAirways
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PublishedonJan08,2013

Theissueofairlinestartupisverycomplicated,itismanagebyahugeaviationconsultant
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AirlineStartup
1. 1.Theissueofairlinestartupisverycomplicated,itismanagebyahugeaviationconsultantcompanies
andairlinemanufacturessuchBoeingandAirbus.thatcustomizetheresultstofittedtotheirinterestsand
products,offcoursetheiraircraftaretheMohammedS.AwadbestintheworldbutwhentheResearch
Scholarairlinesfallstomakeaprofits,thenitbecomeamanagementissue,soeithertomakegoodstartfor
newestablishedairlinesorimplementturnaroundprogramforexistingone.Sotomakeagoodstartforan
airlinebothmanufactureslunchanoutstandingteamstofacilitatethestartingupphase,theydothatasthey
careabouttheirbrandname(BoeingorAirbus),sotheywanttoensurethattheairlineindustrybusinessis
healthyinspiteofthetightmarginofprofit.Everyonehasitsownwayforanalysisofstartingupofairline,
wearegoingtoaddressroadmapbyBoeing,startmeupbyAirbus,onefromairlineindustry,andfinally
anewapproachthatbasedontheairlineinputsonly.1AirbusApproach:TheStartMeUpVPlanBoth
approaches(AirbusandBoeing)startedbyAirlineIdea,thefirstthingwhattypeofservicewewantto
deliver,isitLegacyAirline,Hybrid,orLCC(LowCostCarriers)andwhatbusinessmodeltofollow,what
arethetrendsandthepotentialinregions/market,canwecapturetheproposedshare,thenabusinessplan
shouldbesetup,whenthefinancialmodelshowsapositivesignalinfirstyearormaybelater(twoyears),
thebusinessplanshouldbeminimumfor5yearsoperations,thisshouldincludenetworkstructure,aircraft
selection,andoperatingmodel,whencethebusinessplaninhand,thenwesecuretheaircrafts,andinvolve
inAOCprocess,recruitmanagement,businesscapitulation,facilitiesstaffoperationalplan,departments
setup,andtakeoff.
2. 2.2BoeingApproach:StartupBoeingRoadmapAlsoBoeingstartedbyAirlineIdea,asmentioned
previously,thestepsaremoreexplorebyBoeing,asGeneralIndustry&CompetitiveAnalysis,Target
MarketAnalysisandServiceOffering,RouteStructureDevelopment,ScheduleDevelopment,Market
StrategyandSWOTAnalysis,AircraftEvaluationandFleetPlanning,MarketShare(Revenue)Forecasting,
OperatingPlan(Expense),FinancialModelDevelopment,Development,ManagementTeamRecruitingThat
mostofstepsmentionedbyAirbus,thenewthingistheBusinessPlanDevelopmentIterations,themodel
canbeadjustedtomeetthedemandandgetrightpictureofbusiness.Whencetheinvestorsarecomfortable,
theprocesscanbeextendedfurthertoBusinessCapitalization,AirlineOperatorcertification,aircraft
sourcing,staff/FacilitiesandInterintotheService.3AirlineIndustryApproachMostofconsultancyfirm
followtwostagesapproache.g:(www.eagleconsulting.aero)inthefollowingoutline:PlanningoConcept
FormulationoFeasibilityAssessmentoBusinessPlanDevelopmentImplementationoImplementation
Planning.oFundingSouredoManagementRecruitmentoAirOperatingCertificationoAircraftSourced
oOperationalSetUp
3. 3.4UcurveApproach:Basedonmyexperienceandpublishedresearchpapers,airlinecanbedefineby
fourcategoriesi.eDemands,Fares,Distances,andCost.Whichdevelopedtheoptimumoperatingcurveof
theproposednetworkofairlinestartup.Furthermycurrentconcernistoaddressthefeasibilitypartsof
AirlineStartup.TheapproachstartedbyAirlineIdea,i.eLCC,Hybrid,Legacy,orNetworkairline.Another
issueismarketestimationDemandforecastingeitherontheexistingnetwork,orestablishingnew
destinations.ThebasicanalysisformulaisThemodelconstructedbyFivemainparts1DevelopingInteger
program2ImplementedUcurvetechnique,and3DefiningOptimumoperatingcurve4Setting
OptimumFarestrategy5ImproverouteprofitabilityThenewconceptinthismodelishowtodefinethe
rightaircraftwithouttheinterfaceandguidanceofthemanufactures,anditfollowsbybenchmarkingstudy
topositiontherightcosttorightthebusinessmodelbasedonairline(Fleet/Aircraft)input.Conclusions:No
doubtsaboutthefacilitythatoffersbymanufactures,butdefinitelythatanalysiswillbebiased,surewewill
notgetanymanufactureanalysissupporttheothercompetitormanufactureargument.Thatwhyathird
partyshouldbeinvolveinprocessofairlinestartup.WhileforUcurveapproach,itrelayontheairlineside
andinformationthatreflectstheoptimumoperatingcurveandwithbenchmarkingstudywecanposition

theotheroperatorscostonlinetoutilizetheiroperatingexperienceinourfigurewhichgivesacorrect
pictureaboutthebusinesstousetherightsizeofAircraftsforproposednetwork.
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