So, you are
considering building or buying an airline?
country of the world, there is nothing that we know
of that is so over-regulated and complex as an
operating airline. What is the first thing you will
need? For most of our clients it’s an initial
requirement for delivering a well written
professional business plan to potential lessors and
Feasibility Studies &
Be sure you
know what you want and what to expect when pursuing
a new venture. A lot of time, resources and hard
money can be saved in knowing what to do, what not
to do and the order in which to do it. A good rule
of thumb is to never commission a business plan
until a feasibility study has been written.
study is normally less than 40% of the cost of a
formal business plan and although a feasibility
study will not be anywhere close to the in-depth
“nuts and bolts” view of a business plan, it will do
exactly what the name implies. It will show if a
project is feasible before other steps are taken or
indeed paid for.
The differences between a
feasibility study and
a business plan.
study is designed to discover if a business or
project is “feasible” or not: (In short, does the
business or project warrant further investment of
time, money and further study or is it a
non-starter?) A feasibility study is a relatively
inexpensive way to safeguard against the wastage of
If a project is
seen to be feasible from the results of the study,
the next logical step is to commission a full
investment made in the feasibility study itself then
be wasted? No, because the research and information
uncovered in the study will be of good use in the
business planning stage and will reduce research
time and therefore the cost of the business plan.
A business plan
is designed to “plan” in advance how a business or
project will be started, implemented and managed:
(In short, a working “blue print” for the entire
operation of the business or project). Business
plans are commissioned for one of three reasons:
Reorganization, investment / funding or a management
blueprint for new operation.
plans to fail, he only fails to plan!
A Business Plan
is a detailed blueprint for building a given
company. A business plan contains all that the
Feasibility study has plus specific time-lines,
detailed budgets with monthly and seasonal
forecasts, letters of intent, resumes of staff,
background, competition, strengths & weaknesses,
work sheets and a full notations, appendix and all
related and required documents that will be
referenced as the company is being developed.
business plan will show what revenues can be
expected and when to expect them, what overheads and
expenses will need to be paid and exactly when they
will be due. It will also show staffing levels and
salaries along with costs of employment, sales
levels with monthly and seasonal trends, setup
costs, building/office costs, utility and telephone
costs, legal, insurance and accounting costs, office
furniture and supplies costs and a myriad of other
cost projections as well as legal requirements and
conformation to regulations.
In addition to
the revenue projections and costs, the business plan
will feature sections on demographics, sales and
sales methodology, objectives, expansion plans,
contingency exercises, product and services market
introductions, regulatory requirements and the laws
of City, State and Federal governments relating to
the business / project and much more. A well-written
business plan can help maximize potential and
minimize overheads, liabilities and risk associated
with any project.
Over the years
we have written many feasibility studies and
business plans for new and expanding airline
operators. We have started several airlines from
scratch and are able to offer hands-on assistance
and support from day one until the project is
We can assist
in writing your business plan and when complete, can
present it to banks and lessors worldwide.
What does a
Business plan show and why do your need one?
imagine that you have a valuable aircraft you are
offering to new and existing operators for lease.
What is the first thing you want to know? Of course,
can the client ( lessee) make the payments? Can he
succeed and remain in business for the term of the
lease? Can I expect to have my aircraft returned in
as good condition as when delivered?
These are the
practical every day considerations of any lessor.
The lessor is predictably most comfortable leasing
to old, well established air carriers and
conversely, he is the least comfortable leasing to a
start-up. In fact, many Lessors simply will not
provide aircraft to start-up air carriers. What
lenders and lessors absolutely deplore and are
frightened to death of is having to repossess their
aircraft. Default is the big scary word that haunts
the dreams of lessors and secured parties
For any new
carrier approaching a lender or lessor, the single
document that means the difference between a
positive or negative decision is 100% , the Business
plan. If the plan is well written and the lender and
his advisors can see clearly in acceptable format,
exactly how your new company is going to succeed,
make the payments and avoid default, you have a
Your plan has
to show, in standard airline terminology and
acceptable, recognizable format, a minimum of five
year, month by month financial projections
reflecting every possible overhead contrasted
against variable revenues.
The plan has to
introduce your staff and contain detailed resumes on
all the key personnel and principals. The marketing
plan has to show in detail how you will penetrate
the proposed markets and allow your reader to see
that you do indeed understand the mechanics of the
An airline is
exactly equal to the sum of its parts and no more.
You will have to show how you intend to operate and
maintain the aircraft. Where and how they will be
maintained, a detailed list of equipment that you
will be providing for ground servicing is required.
Comments on spares, tooling, hangars and storage are
necessary. You will have to show exactly where you
will locate current and qualified pilots, where they
will be trained and what you intend to pay them.
of suitable cabin staff and who they will be trained
is also required, same with your counter and
reservations staff. There has to be a very detailed
set of projections indicating the number of
employees that you will have to retain both
initially and as the operations grows.
You will have
to have letters of intent included in the appendix
from all the relevant parties. For example, you will
need a letter from the civil aviation authority
under which you will be operating indicating that
they have reviewed and are in accord with your
plans. Similar letters from the airport authorities
along your proposed routes are required. A letter
from an insurance broker is an additional
requirement. In fact, for every statement in the
plan there has to be back- up documentation in the
The plan has to
detail every single area of the company so that
Lenders and Lessors can have confidence that you do
in fact, have a very clear idea of exactly what is
required for success. Absent a plan that reflects
all and more of the above, you will have little or
no chance of being judged lease or loan worthy.
are literally and easily at least 100 of hours of
detailed number crunching work in any Business Plan
that is worth the name. Do not expect to have a
reasonable plan delivered for a promise of some
nebulous reward in the future. We approach each
client on a personal and professional basis. We will
devote weeks of our time to your project. We are a
work for fee company not snake oil salesmen, brokers
or commissioned agents. We ask for 50% of our fees
in advance with the balance on delivery based on a
detailed performance agreement. There are only a few
companies in the world actually capable of doing
what we do and we are the only one who have actually
done what we tell others how to. All of our
personnel are lifetime hands-on professionals not
college kids hired by a New York consulting company.
A poorly written Business Plan is valueless and will
not be given consideration in the commercial
that you still want to get into this business,
please read over the following and, if you can
provide logical responses, send me an initial
letter and we will get back to you with a reasonable
proposal to write your Business Plan and help you
get into operations.
Partial and initial List of items
required for Business Plan
aircraft considered, LOPA,( mixed config?) Cargo,
Who is the
competition? What aircraft do they operate?
Where do you
want to go, proposed routes?
salaries you might propose, Captain, FO. FA's,
Mechanics office staff, officers, etc.?
Operations, Chief Pilot; experience, licenses,
names and CV
CV, Name and salary?
Ramp costs, gate and counter costs? Can you sub
utilities costs? How much office space do you
foresee initially requiring?
What would be
your estimated set-up costs for ( communications)
office , reservations, etc.?
connections costs in your area? What would it cost
to wire your proposed offices?
ATC charges, if
Hourly MX costs
estimated for routine and non- routine MX on any
existing or proposed aircraft?
you do or would set aside for the above?
compensation of management team and owners?
certification of any existing aircraft.
Bill of sale,
present valuation, specs, photos of any aircraft
owned or controlled presently?
Copy of your
AOC ( if you have one at this time) and other
government permits and licenses.
Photos of the
principals, photos of offices.
proposed, total time, total cycles, How many flights
would you operate/ month
letter from your bankers indicating initial
capitalization & net worth.
Copy of the
incorporation papers for your company.
your employees and pilots live? Could the pilots
Copies of all
existing employees’ resumes and licenses?
Are they or
would they be expatriates?
What are the
nationalities of the principals?
Who owns the
company? Principal stockholders?
What are the
assets of this company, Real estate, property,
securities, cash in banks?
How long has
the company been in existence?
Copy of any
existing Business plan?
business?, Experience of the principals in
chartered? State of incorporation?
Net worth of
statements for principals?
sign personally on any loan?
details of all assets?
Money in banks,
receivable monthly and copy of revenues and
overheads last year.
employees? Now and when in operation
principals and employees?
mandatory experience minimums for captains?
offices when in operation, mailing and street
claims to date, if yes, details?
contact info of Insurance broker? List of claims?
What would you
charge for typical tariffs? Passenger and cargo?
What do you
factor as costs: hourly, Airframe, crew, insurance,
fuel, G&A, etc?
How much do you
estimate to earn as a monthly gross and net from the
What are total
net earnings of the company presently, monthly,
identify the client base, your market?
whatever the Business Plan states in the text, must
be proven by documents in the appendices.
These are some
of the items and questions that would be required in
any Professional Business Plan Remember, to
successfully borrow money or someone else's
aircraft, the lessee or borrower has to be
transparent, honest, forthcoming and completely
reliable. It is the aim of the well written Business
Plan to create this impression.