Boeing wrote a step-by-step guide for starting a new airline. Here's what it wants potential founders — and customers — to know. (BA)
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- Boeing runs a program that helps innovators launch new startup airlines — and become potential customers
- The program, StartupBoeing, offers a detailed framework for anyone looking to get into the airline business. The company says it will work closely with serious parties to help get their airline running.
- While the COVID-19 pandemic has devastated airline industry, most experts anticipate a full recovery once treatments or vaccines are available.
- Visit Business Insider's homepage for more stories.
The airline business is notoriously fickle.
Back in 2007, Warren Buffett, chair of Berkshire Hathaway, said that "if a far-sighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down." About a decade later, he reversed his position and invested heavily in US airlines, only to dump his holdings this April as stocks plummeted amid the COVID-19 pandemic.
Such about-faces are understandable. Despite the difficulties of the airline business — an ongoing boom-bust cycle as demand mirrors the larger economy, intensive regulation, tremendous capital expenses, exposure to volatility in fuel prices, and even financial pain caused by bad weather — airlines can be profitable. With the right business model in the right market, they can prove downright lucrative.
Even today, as the coronavirus pandemic obliterates airline budget sheets and knock carriers into bankruptcy, investors see opportunities. Take David Neeleman, founder of JetBlue and Brazilian carrier Azul, who's getting ready to start his third airline, Breeze (albeit with a launch date delayed to next year).
Boeing, of course, is all for new airlines who might want to spend a big pile of money on its planes. Which explains why, since 2006, it has run a program aimed at helping new potential customers get off the ground.
StartupBoeing reserves its substantial support for serious enterprises, but it's not overly discriminating: It puts much of its advice on its website, for free, for anyone looking to get airborne.
So if you see a space in the market for a new airline and you think you have the stomach for one of the world's toughest industries, here's what Boeing thinks you — perhaps its next big customer — need to know.
Before anything else, Boeing suggests making sure you know what you're getting into.
Reuters
As a first step, Boeing invites prospective airline innovators can reach out to the StartupBoeing team.
Encouraging new airline startups is certainly a self-serving example of working to create your own demand — or in this case, facilitate it — but Boeing is blunt about the challenges.
"Starting an airline is tough. Running a profitable airline is even tougher," the planemaker says on its website. "Few businesses have as many variables and challenges as airlines."
The first actual step: market analysis.
Breeze
Some questions to ask yourself: Why start an airline? Is there a need for another one? What can your airline do that others aren't doing? What kind of market can it serve?
There's no point in starting a company if you don't know where it will slot in among competitors, and who its customers will be. That's why Boeing suggests studying the commercial aviation market closely before starting to invest.
The company publishes regular, comprehensive reports on commercial market outlook, forecasted air cargo demand, and the outlook of the aircraft financing market (more on that in a bit).
Additionally, there are consultants and agencies around the world which specialize in the commercial aviation market who can help get new airlines off the ground, so to speak.
Next, you'll need to master the operating environment.
Reuters
Along with the challenges that come with starting any business, new airlines have a whole set of unique hurdles. For one thing, the rules are many, and unforgiving.
"Startup airlines must be aware of and operate within a framework of regulations, standards and guidelines," Boeing says on its startup website.
You'll have to be up to speed on the Freedoms of the Air, a set of regulations dating back to 1944, which dictate where a country's airlines are allowed to fly or land. Same for ETOPS requirements, a collaborative set of standards that determine how airlines plan routes, are universal.
Safety standards, required training and equipment, labor laws, tax rules, security requirements, fuel and supply procurement, and more, can all vary on the federal, state, or local level. Once you've decided on your market, you'll have to find a way to operate within all of these frameworks.
See the rest of the story at Business Insider
See Also:
- Airbus' new eVTOL that aims to usher in an era of flying taxis just took its first public flight – take a look at CityAirbus
- Emirates will pay for your medical treatment, hotel quarantine, and even your funeral if you catch COVID-19 while traveling
- Whoever wins the 2020 presidential race will be the first to use the new Air Force One – here's what we know about the new $5.3 billion aircraft
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