If you are intending to establish an airline, the areas outlined below should be carefully considered.
- Market research including routes and the creation of a robust business plan for the airline.
- Choice of jurisdiction and location for the operating base
(and, if different, head office and aircraft owning/leasing vehicles) driven by various factors including:
- market analysis of the appropriate operating hub;
- ability to meet nationality or other requirements to qualify to operate routes under bilateral or multilateral open skies agreements (EU, EU-US, ASEAN);
- relationship with and understanding of the requirements of the relevant civil aviation authority or equivalent;
- relationship with and understanding of the likely attitude of the transport ministry/other government authorities (for example, will they support the creation of a competitor to a national flag carrier and will that support will flow through to state entities that approve licences, planning permissions, work visas and so on?);
- tax considerations;
- “bankability” of the jurisdiction and the security registration structure for financiers;
- availability and cost of appropriate staff and suppliers; and
- public relations/marketing presentation.
- The acquisition or formation of a company to operate the airline (and if appropriate/required to hold aircraft and/or employ staff in different jurisdictions).
- Implementation of advertising and promotional arrangements to alert the market to the launch of operations as a passenger or cargo carrier or both.
- Organisation in advance of distribution and sales (including facilities for telephone and on-line sales of product and merchant acquirer or other arrangements with credit card and payment processing providers).
- Completion of financial and tax planning to facilitate commencement of operations, for example working capital requirements, aircraft finance requirements, cash flow projections and revenue budgets.
- Attracting and agreeing terms of investment, capital base and off-balance sheet financing, for example private equity, IPO, and other possible forms of financing.
- Arrangement of payment procedures for transit charges with air navigation authorities.
- Arrangement of reporting, credit acquisition and payment procedures for the EU Emissions Trading Scheme if the airline will operate in or into the EU.
Rights and Licences
- The acquisition of all necessary licences, consents, permits, declarations, filings, registrations, approvals and certificates (including the Air Operator’s Certificate) to possess, operate and maintain aircraft in passenger-carrying, revenue-earning service.
- Ensure a designated carrier under relevant bilateral/ multilateral air transport agreements.
Acquisition of Assets and Rights
- The acquisition of the right routes, operating rights and landing/take-off slots.
- Agreements with relevant airports (including agreement of per pax charges and location of facilities within airport) and/or service providers for provision of check-in and sales desks, passenger and baggage handling, lounge access, catering, cleaning, aircraft stands, hangar use/access, fuel supply and other required facilities.
- The acquisition of the right aircraft, ready to launch operations on schedule; agreeing operating leases (the most likely arrangement for a start-up airline) or making arrangements to operate initially as a “virtual” airline (having an existing airline with an AOC and aircraft operate under your brand).
- The employment of sufficient flight and cabin crew, support and administrative employees to launch operations on time and obtain all necessary work permits and security clearances for them.
- The acquisition of the required hull, liability and war risk and other insurance coverage in time for the commencement of operations.
- Agreement of planned maintenance programmes with all manufacturers and suppliers of major equipment and components and putting in place MRO agreements as required with external maintenance providers.
- The acquisition and fit-out of base premises and offices and maintenance facilities.
- Putting in place commission and other arrangements in relation to anticipated ancillary revenue streams (for example arrangements with hotels, car hire, airport parking and coach/bus/train transfers).