Prepare for takeoff

It’s been said that it takes three things to start a successful airline. One, a good business plan. Two, a talented team of managers. And three, money - lots and lots of money.

If you want to start an airline, and you need money or you lack good management, we probably can’t help you. But, for the past several years, a team at Boeing has definitely been able to assist a lot of potential operators with their business plans.

Part of that effort is a website called StartupBoeing, which has had about 1.4 million visits since we launched it in 2006.

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You might ask, why get into this aspect of the business? Well, let’s call it “opportunity development.” Healthy startup airlines make good sense for the aviation industry.

Believe it or not, there is opportunity right now. In a downturn what do you see with the big carriers? They pull out of certain markets. And as they do, they create opportunities. So if the right customer comes in and positions themselves in the right spot, they may be successful.

Of course the ultimate question is: “When the economy rebounds and those big carriers move back into those markets, can the startups sustain the opportunity?”

In other words, don’t expect to see huge volumes of airlines starting up. This remains a very difficult business to succeed in. To quote from the StartupBoeing home page, “Starting an airline is tough. Running a profitable airline is even tougher.”

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Click on the screen image to go to StartupBoeing.

You’ve probably heard the saying that goes something like, “Running an airline is a great way to turn a billionaire into a millionaire.” Clearly, in our industry, even good business people or people with a lot of money can make bad choices. That’s why we’ve seen a number of airline business failures.

But we do get a lot of inquiries. StartupBoeing.com was created to answer most of the questions from people interested in starting up an airline. We’ve now logged more than 2,500 requests for guidance. We’ve reviewed more than 100 business plans and we’ve worked with the Sales teams on more than 20 solid prospects. A handful of probable startup airlines are now in development.

So how does Boeing get involved? First, we identify prospects, the ones with the best potential, and work with them to figure out the market and possible niche opportunities. Then we work with them to develop a business plan. We look at the total cost to get going, and then what airplanes will be needed to achieve that. The input and advice we give is based on what we think will work in the marketplace, not just what works for Boeing.

Oftentimes startups begin with used airplanes. 99% of the success stories have been from people who started out with used or leased airplanes. So the key is to identify the business model, the team that’s going to succeed and help them find the resources they need.

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On StartupBoeing you can find Information and images of all of our airplanes - going all the way back to the 707 and DC-8 (above).

After establishing the business model, the next important step is identifying a well-analyzed market opportunity. Without that, no potential partner can understand the risks. We want to identify the best potential among startups and secondary carriers and to move them quickly along a path to getting the support they need from Boeing - and perhaps becoming Boeing customers.

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There’s a world of information available on StartupBoeing, including a useful glossary of terms and abbreviations. For instance, how does Boeing define Operating Empty Weight (OEW)? You’ll find the answer and other definitions by clicking the image above.

StartupBoeing.com also has a wider purpose as a resource to pass on information to our customers - and also as a resource for existing airlines, financial institutions, consultants and the leasing community. It’s a place for neutral industry data. We want to help make the industry healthy and make airlines safe, reliable and profitable.

We’ve seen a lot of value not only in startups coming in to the site, but even with students using the resources. For instance, Embry-Riddle Aeronautical University’s Hunt Library has it on their recommended website list.

Boeing is a bit different from our competitors. We put our airplane performance data out there for everyone to see, and then we take it one step further and put it out there in a form that’s easy to download, in pdf files. In fact we’ve had more than 1.85 million files downloaded from the site - more than a quarter million just in 2010 so far.

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Flight decks of the 737 - the most accepted jetliner among startup airlines - then and now. Startups Ryanair and Southwest early on operated 737-200s (top) and now fly large fleets of Next-Generation 737s (bottom).

The data is there to help the industry make smart decisions - to identify and create healthy customers and then introduce them to the people within Boeing who can help them succeed.

We know that the future will be a test of new business models, and this is a time of opportunity. If you were to drive past our delivery center at Boeing Field and look at all the 737 tails, it might occur to you how few of those airlines you would have seen even 10 or 15 years ago. It’s remarkable, and the startup evolution worldwide hasn’t reached even half of its potential.

Our forecast shows that travel will continue to grow and airplanes will be in demand - and as they have since the beginning of commercial aviation, startups will be an important part of that growth.

So, check out the StartupBoeing site, and let me know what you think.

Comments (4)

P.Sumantri (France):

I am one of those regular users of your "StartupBoeing" pages. For example, my 777-300ER payload-range estimator written with only 200 lines of Tcl/Tk script is based on the performance data provided in there. You can find the small calculator here: http://wp.me/piMZI-H2

Don't expect it to be very accurate because the performance of the 777-300ER has been "distilled" to only 6 floating-points (or 6 real numbers).

A "likely" and achievable improvement for the 777-300ER was defined using the same calculator, which runs beautifully on my cellular phone. It's in my post "Likelihood" here: http://wp.me/piMZI-Iz

Chris C (South Africa):

I've referred to StartUp Boeing on a number of occasions, and have found it to be incredibly interesting, resourceful and well worth the read. For fellow readers who may not have seen it yet, and who are interested, here's the link to the photo of the phenomenal 747-8's flight-deck: http://www.boeing.com/commercial/startup/pdf/747-8_fltdeck.pdf

By the way, the 737-200's flight-deck is just awesome...a great flying machine and a great machine to learn to fly on for airline pilots.

Norman (Long Beach, California, United States):

Just as important as having the money is having the right plan, in the nineties when Long Beach Airport had almost no flights, a lot of start up airlines began operation but failed a short time afterward, Presidential Air was a big example, their planes A300-B4-203s where always breaking down, Win Air lasted a few months in 1998 serving western cities to some success with 737-200s, they quit when investors apparently ran out.

Airlines like Air Tran are better funded and have far superior business plans and having the right aircraft helped as passenger capacity, fuel efficiency and TBO are contributing factors to the airlines success. Having the right aircraft has also contributed to the success and growth of Southwest Airlines from the nineties onward and Ryanair from the last decade to now.

The biggest beneficiaries for Startup Boeing are the many of the newly started airlines around the world in fast growing economies like Fly Dubai, Spice Jet and Lion Air and airline that have yet to start will have all the advantages before they start and more examples of how to proceed with operations and how to keep themselves in business.

Paulo M (Johannesburg, RSA):

This is a great resource library for airlines - and for anyone interested in how the industry works really. Often the joke is you make a million dollars by starting an airline with two million! :)

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