cargo airlines business plan

Air Cargo Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Transportation Sector

Do you want to start an air cargo company and need to write a plan? If YES, here is a sample air cargo business plan template & feasibility report. 

Air cargo business is one of the few businesses that are restricted to location and of course the presence of airports and it requires core professionals to handle. It is a business that an investor with the right skills and connection can start. Below is a sample air cargo company business plan template that will help you successfully launch your own business.

A Sample Air Cargo Company Business Plan Template

1. industry overview.

The Global Cargo Airlines industry includes businesses that provide air transportation for commercial and private cargo on either scheduled or non-scheduled routes. The industry also includes express services and air transportation that is part of a national postal system, while courier services are excluded from this industry’s operations.

Some of the key factors that will contribute to growth in this industry include growth in the manufacturing sector, consumption, international trade and also increase in technology reliance will provide new opportunities for logistics consulting and advisory services, particularly for distribution chain networks and logistics.

We are not ruling out the fact that technology can also cut some jobs in the industry. The Global Cargo Airlines Industry is indeed a very thriving industry in most countries of the world. It is a major sector of the economy of the united states and it generates over 1 billion annually from more than 6,275 registered and licensed air cargo / freight packing and logistics companies.

The industry is responsible for the employment of over 31,785 people. Experts project the industry to grow at a 1.9 percent annual rate between 2014 and 2019. FedEx Express and UPS Airlines Inc have a dominant market share in this industry in the United States.

Research conducted by IBISWORLD shows that over the five years to 2019, the Global Cargo Airlines industry has experienced constrained growth amid a chronic excess of cargo capacity and mounting competition from maritime transportation.

Additionally, demand for industry services has remained relatively weak during the five-year period despite rising global income levels and increased production activity among developed economies.

In fact, the total value of world trade has decreased at an annualized rate of 0.4 percent over the five years to 2019. At the same time, substantial declines in the world price of crude oil have prevented industry operators from generating revenue through fuel surcharge fees, further limiting industry growth.

Overall, industry revenue is estimated to increase at an annualized rate going forward. Starting and operating an air cargo company can be capital intensive and challenging, but the truth is that it can be rewarding at the same time.

One good thing about the industry is that it is open for both big time investors who have the capacity to start the business with their own cargo airplane and aspiring entrepreneurs who may want to start as middlemen between air cargo operators and customers.

2. Executive Summary

Eagle Express® Air Cargo, Inc. is a registered and licensed air cargo services company that will be based in New York City – New York. We are in business to provide air cargo services such as domestic air transit deliveries, international air transit deliveries, ground deliveries, messengers and local deliveries et al.

Eagle Express® Air Cargo, Inc. has been able to secure all relevant licenses and permits to operate throughout the United States and other countries of the world. We will ensure that we abide by the rules and regulations guiding The Freight Packaging industry.

Our customers can be rest assured that they will get quality services at competitive rates. We will ensure the safety of goods under our care and our customers will get value for their money. At Eagle Express® Air Cargo, Inc. our goal is to provide excellent services to our customers and we pride ourselves on the integrity and competence of our company and our employees.

At Eagle Express® Air Cargo, Inc. we are passionate in the pursuit of excellence and financial success with uncompromising services and integrity which is why we have decided to start our own air cargo services business. We are quite optimistic that our values and quality of service offering will help us drive our business to enviable heights and also help us attract the number of clients that will make the business highly profitable.

We are quite aware that in order to become the number one choice in our city, we must continue to deliver timely and quality services.

We are open to the use of latest technology in The Global Cargo Airlines industry. No doubt our excellent customer service and the quality of services we offer will position us to always welcome repeated customers and handle massive deals both from government agencies and industrial giants.

Our client’s best interest will always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

Eagle Express® Air Cargo, Inc. is a family business; it is owned by Spencer James Teddy and his immediate family members.

The company will be fully financed by the Spencer JT family. Mr. Spencer James Teddy has a diploma in Transport and Logistics Management, BSc. Business Administration and over 20 years of hands on experience working for some of the leading in companies in the Global Cargo Airlines industry .

3. Our Products and Services

Eagle Express® Air Cargo, Inc. is established with the aim of maximizing profits in The Global Cargo Airlines industry. We want to compete favorably with leading air cargo/freight packaging and logistics companies in the United States which is why we will ensure that every service carried out meets and even surpass our customers’ expectations.

We will work hard to ensure that Eagle Express® Air Cargo, Inc. is not just accepted in New York City – New York but also in other cities in the United States of America and Canada. Our service offerings are listed below;

• Air transportation of cargo
• Air transportation of national postal systems
• Chartered airfreight services
• Scheduled airfreight transportation

4. Our Mission and Vision Statement

Our Vision is to become one of the preferred choice when it comes to air cargo/freight packaging and logistics services in the whole of the United States of America.

Our mission is to ensure that we build a successful air cargo services company that will operate in the whole of the United States of America; a company that will grow to be listed amongst the top 5 air cargo services companies in the whole of the United States of America.

Our Business Structure

Our business structure will be designed in such a way that it can accommodate both full – time employees and part-time/contract staff; those who just want to take some time off to generate additional income.

We intend starting the business with a handful of employees (documentation officers, professional material handlers/yard spotters and back office staff) and some of the available sales and marketing roles will be handled by freelance marketers. Adequate provision and competitive packages have been prepared for all our employees.

At Eagle Express® Air Cargo, Inc. we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company.

For now, we will partner with air cargo operators and contract the maintenance of our planes to a service provider, we don’t intend to maintain a very large overhead from the onset. But as soon as the business grows and stabilizes, we will assemble our own in- house maintenance team. Below are the business structure and the roles that will be available at Eagle Express® Air Cargo, Inc.;

• Chief Operating Officer (Owner)

Admin and HR Manager

Air Cargo and Logistics Manager

• Marketing and Sales Executive (Business Developer)
• Material Handlers/Yard Spotters/Forklifts Operators
• Customer Services Executive/Front Desk Officer

5. Job Roles and Responsibilities

Chief Operating Officer (Owner):

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Responsible for coordinating loads and journeys
• Responsible for operating IT systems for the organization
• Responsible for negotiating and agreeing contracts for the organization
• Responsible for developing and confirming schedules
• Responsible for planning for and negotiating technical difficulties
• Responsible for preparing paperwork for regulatory bodies
• Responsible for implementing health and safety standards
• Handles the planning routes and load scheduling for multi-drop deliveries.
• Handles booking in deliveries and liaising with customers.
• Responsible for ensuring all partners in the supply chain are working effectively and efficiently to ensure smooth operations.
• Responsible for developing transportation relationships.
• Responsible for monitoring transport costs
• In charge of negotiating and bargaining transportation prices
• Responsible for dealing with the effects of congestion
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Design job descriptions with KPI to drive performance management for clients
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defining job positions for recruitment and managing interviewing process
• Carrying out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversee the smooth running of the daily office activities.

Marketing and Sales Executives (Business Developers)

• Identify, prioritize, and reach out to new clients, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts
• Writing winning proposal documents, negotiate fees and rates in line with organizations’ policy
• Responsible for handling business research, market surveys and feasibility studies for clients
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Document all customer contact and information
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managers with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Material Handlers/Yard Spotters/Forklift Operators

• Responsible for packing goods for transportation
• Responsible for crating goods for transportation
• Responsible for wrapping goods for transportation
• Freight consolidation
• In charge of trade document preparation
• Responsible for storing goods prior to and after freight
• Responsible for handling packing services for motor carrier and storage services

Customer Service Officer

• Welcomes clients and visitors by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized – customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products and, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries

6. SWOT Analysis

Going by our vision, our mission and the kind of business we want to set up, we don’t have any other option than to follow due process. Following due process involves hiring business consultant to help us conduct SWOT analysis for our business.

Eagle Express® Air Cargo, Inc. hired the services of a seasoned business consultant with bias in startups in the U.S. to help us conduct a thorough SWOT analysis and to guide us in formulating business strategies that will help us grow our business and favorable compete in the Global Cargo Airlines industry.

Here is a summary from the result of the SWOT analysis that was conducted on behalf of Eagle Express® Air Cargo, Inc.;

Our strengths are strong management, robust network (serving some of the largest population centers in the U.S.), size advantages, cost advantages, customer loyalty and strong reputation amongst domestic and industry players.

Our business is centrally located in the airport in New York City – New York; our location is in fact one of our major strengths. Another strength that counts for us is the power of our team; our workforce and management. Our team are experts in the Global Cargo Airlines industry.

Our weaknesses are lack of finance, cost structure, lack of scale compared to our peers who have already gained ground in the industry. As a new business which is owned by an individual (family), and we may not have the financial muscle to acquire our cargo airline for now. As a new business, we are also quite aware that it will take time for us to build trust with our clients.

• Opportunities:

The opportunities that are available to us as an air cargo services company in the United States are online market, new services, new technology, and of course the opening of new markets. We are centrally located in one of the busiest industrial areas in New York and we are open to all the opportunities that the city has to offer.

Our business concept also positioned us to be the preferred choice in New York City – New York. The truth is that there are no standard air cargo company within the area where ours is going to be located; the closest to our proposed location is about 15 miles away. In a nutshell, we do not have any direct competition within our target market area .

Some of the threats that we are likely going to face are mature markets, bad economy (economy downturn), stiff competition, and volatile operational costs.

Other threats that are likely going to confront Eagle Express® Air Cargo, Inc. is unfavorable government policies , seasonal fluctuations, demographic/social factors, downturn in the economy which is likely going to affect consumers spending and of course emergence of new competitors within the same location where ours is located.

7. MARKET ANALYSIS

• Market Trends

The market trends as it involves the Global Cargo Airlines industry especially in the United States is indeed dynamic and at the same time challenging.

But one thing is certain, once an air cargo company can gain credibility, it will be much easier for the company to secure permanent deals/contracts with organizations, big time merchants and warehouse operators who are involved in moving goods and materials from one location to another on a regular basis.

Most players in the Global Cargo Airlines industry are positioning their businesses to maximize profits in the industry. It is an established fact that some of the key factors that will contribute to growth in this industry include growth in the manufacturing sector, consumption, international trade and also increase in technology reliance. We are not ruling out the fact that technology can also cut some jobs in the industry.

Lastly, operators in this industry know that some of the major factors that count positively in this line of business are competence, trust, honesty, good relationship management and of course timely and safe pick-ups and deliveries. Hence, they will ensure that they portray their company in this light.

8. Our Target Market

Our target markets are basically every one; organizations and individual as well who have cause to move documents, goods and materials from one location to another. In other words, our target market is the whole of the United States of America and below is a list of the people and organizations that we have plans to do business with;

• Merchants and Warehouse Operators
• Retailers who would want to move their goods from one location to another via air
• Manufacturers (Chemical manufacturers, and Textiles manufactures et al)
• Corporate organizations who would want to move cargo via air
• Government agencies who have cause to move goods and materials from one location to another locations via cargo

Our competitive advantage

The competitions that exist in the Global Cargo Airlines industry is stiff because anyone that has the finance and business expertise can decide to start this type of business howbeit on a small scale servicing a city or more. Although, the Global Cargo Airlines industry requires some form of training and expertise, but that does not in any way stop any serious-minded entrepreneur to start the business and still make good profit out of it.

The Business model we will be operating on, ease of payment, wide range of services and our excellent customer service culture will definitely count as a competitive advantage for Eagle Express® Air Cargo, Inc.

So also, we have a team that can go all the way to give our clients value for their money; a team that are trained and equipped to pay attention to details and deliver cargo and consignments safely, and on time both locally, nationally and international level.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Eagle Express® Air Cargo, Inc. will ensure that we leverage on our strength and the opportunities available to us in the U.S. market to generate enough income that will help us drive the business to stability. We will go all the way to explore every available sources of income in the Global Cargo Airlines industry. Below are the sources we intend exploring to generate income for Eagle Express® Air Cargo, Inc.;

• Airfreight transportation integrated services

10. Sales Forecast

One thing is certain; there would always be individuals and corporate organizations in the United States of America who would always need the services of air cargo companies for the various purposes.

We are well positioned to take on the available market in New York City – New York and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base beyond New York City – New York to other cities in the United States of America where we intend marketing our services.

We have been able to examine the Global Cargo Airlines industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Eagle Express® Air Cargo, Inc., it is based on the location of our business and the wide range of services that we will be offering;

• First Fiscal Year (FY1):  $1.5 million
• Second Fiscal Year (FY2):  $2.5 million
• Third Fiscal Year (FY3):  $3.5 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. There won’t be any major competitor offering same services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

The marketing strategy adopted by Eagle Express® Air Cargo, Inc. is going to be driven basically by professionalism, excellent customer service, honesty and quality service delivery.

We will ensure that we build a loyal customer base. We want to drive sales via the output of our jobs and via referral from our satisfied customers. We are quite aware of how satisfied customers drive business growth especially air cargo/freight packaging and logistics services.

Eagle Express® Air Cargo, Inc. is strategically located and we are going to maximize the opportunities that are available which is why we spent more to locate the business in a location that will be visible and enable us to access our target market.

Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis so as to be equipped to meet their targets and the overall goal of Eagle Express® Air Cargo, Inc.

Our goal is to grow Eagle Express® Air Cargo, Inc. to become the leading air cargo services company in New York City – New York which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force to reckon with in the Global Cargo Airlines industry. Eagle Express® Air Cargo, Inc. is set to make use of the following marketing and sales strategies to attract clients;

• Introduce our air cargo services business by sending introductory letters alongside our brochure to corporate organizations, merchants and warehouse operators, households and key stakeholders in New York City – New York
• Print out fliers and business cards and strategically drop them in offices, libraries, public facilities and train stations et al.
• Use friends and family to spread word about our business
• Post information about our company and the services we offer on bulletin boards in places like schools, libraries, and local coffee shops et al
• Place a small or classified advertisement in the newspaper, or local publication about our company and the services we offer
• Leverage on referral networks such as agencies that will attract clients who would need our customized services
• Advertise our business in relevant magazines, newspapers, TV and radio stations
• Attend relevant expos, seminars, and business fairs et al to market our services
• Engage in direct marketing approach
• Encourage the use of Word of mouth marketing from loyal and satisfied students
• Join local chambers of commerce and industry to market our services.

11. Publicity and Advertising Strategy

Any business that wants to grow beyond the corner of the street they are operating must be ready and willing to utilize every available means to advertise and promote the business. We intend growing our business beyond New York City – New York which is why we have perfected plans to build our brand via every available means.

We have been able to work with our brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market.

We are set to become the number one choice for both corporate clients and households in the whole of New York and beyond which is why we have made provisions for effective publicity and advertisement of our air cargo services company. Below are the platforms Eagle Express® Air Cargo, Inc. intends leveraging on to promote and advertise the business;

• Place adverts on both print (newspapers and magazines) and electronic media platforms
• Sponsor relevant community – based events / programs
• Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, YouTube, Google + et al to promote our services
• Install our billboards in strategic locations all around New York City – New York
• Distribute our fliers and handbills in target areas
• Contact corporate organizations and households by calling them up and informing them of Eagle Express® Air Cargo, Inc. and the services we offer
• List our company in local directories/yellow pages
• Advertise our company in our official website and employ strategies that will help us pull traffic to the site.
• Ensure that all our staff members wear our branded shirts and all our trucks and vans are well branded with our company logo et al.

12. Our Pricing Strategy

Eagle Express® Air Cargo, Inc. has perfected our plans to charge competitive rates since we have minimal overhead compared to our competition in the industry.

We will ensure that we leverage on price to win over customers; our prices will be affordable and negotiable. The fact that our business door is open to both individuals and corporate organizations means that we will have different price range for different category of clients. As the business grows, we will continue to review our pricing system to accommodate a wide range of clientele.

• Payment Options

The payment policy adopted by Eagle Express® Air Cargo, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Eagle Express® Air Cargo, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via Point of Sale Machines (POS Machine)
• Payment via bank draft
• Payment via mobile money

In view of the above, we have chosen banking platforms that will enable our client make payment for our services without any stress on their part.

13. Startup Expenditure (Budget)

Having done our due diligence , this is what it would cost us to start Eagle Express® Air Cargo, Inc. in the United of America;

• The total fee for incorporating the Business in the United States of America – $750.
• The budget for Liability insurance , permits and license – $25,500
• The amount needed to acquire a suitable Office facility in New York City – New York for 6 months (Re – Construction of the facility inclusive) – $250,000.
• The cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al): $15,000
• The cost of logistics chain software, accounting software, CRM software and Payroll Software – $q3,000
• Other start-up expenses including stationery – $1000
• Phone and Utilities (gas, sewer, water and electric) deposits – ($3,500).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $120,000
• The cost of acquiring forklifts – $17,000
• The cost of launching our official Website: $600
• Additional Expenditure (Business cards, Signage, Adverts and Promotions et al): $2,500

Going by the report from our market research and feasibility studies, we will need about $600,000 to set up a standard air cargo services business in New York City. Please note that we don’t own our cargo airline hence the reason for the budgeted amount.

Eagle Express® Air Cargo, Inc. is a family business that is owned and financed by Spencer James Teddy and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about $100,000 ( Personal savings $80,000 and soft loan from family members $20,000) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Eagle Express® Air Cargo, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to offer our air cargo services a little bit cheaper than what is obtainable in the market and also to ensure timely and safe deliveries. We are prepared to survive on lower profit margin for a while.

Eagle Express® Air Cargo, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check:>Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Renting of office facility and renovation of the facility: Completed
• Conducting Feasibility Studies and market survey: Completed
• Startup Capital Generation: Completed
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: Completed
• Recruitment of employees and drivers: In Progress
• Purchase of the needed forklift, furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR) : In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with key players in the industry (networking and membership of relevant organizations and chambers of commerce) and cargo airline operators: Completed

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How to Start an Air Cargo Company

by Andra Picincu

Published on 2 Jan 2020

Air-freight traffic is expected to reach 62.4 million tons globally by 2020. Emerging trends such as air-cargo digitization and the demand for temperature-sensitive goods are driving this market forward. From small businesses to pharmaceutical giants, organizations worldwide rely on air-freight companies to transport their products. As an entrepreneur, you may start an air-cargo business as long as you have the financial and technological resources to break into this field.

Running an air-cargo business requires a good understanding of the industry as well as a local and global professional network. Consider focusing on a specific niche such as the transportation of medical supplies or military goods to gain a competitive advantage.

What Is Air Cargo?

First of all, make sure you understand how this business model works. The terms "air cargo" and "air freight" are often used interchangeably, but they're not the same. Air cargo refers to the goods carried in an aircraft and comprises air freight among other services, such as airmail and air express. Air freight, on the other hand, is the actual carriage of goods by plane.

According to the International Air Transport Association, air-cargo companies transport goods worth over $6 trillion annually , accounting for more than one-third of world trade by value. This kind of business has the potential to save lives. Without it, pharmaceutical companies wouldn't be able to ship vaccines, medical equipment and drugs worldwide in a timely manner. Additionally, numerous products, including medications, require a temperature-controlled environment, and that's something cargo airlines can provide.

Pharmaceutical companies are not the only ones that use these services, though. Approximately 7.4 billion postal parcels are sent annually by airmail. These packages contain a variety of goods, from wine and Swiss watches to electronics, diamonds and even live animals. Air freight is the fastest means of transportation, making it ideal for shipping time-sensitive or high-value goods.

Running an Air-Cargo Business

The first step in starting an air-cargo business is to gather information about the market, your target audience and your competitors. In 2019, global cargo airlines generated about $111 billion in revenue , with UPS Airlines, FedEx Express, Korean Air Cargo, DHL Aviation and Emirates holding the largest market share. In this industry, you'll compete against global, national and regional cargo airlines and maritime transportation providers.

In general, large air-freight companies use new aircraft to transport their goods. Smaller airlines typically use older aircraft that are not suitable for carrying passengers, such as the Airbus 300, Douglas DC-8 and Boeing 707. Some use modified turboprop-powered aircraft like the British Aerospace ATP or even military planes. Their services vary too; some airlines carry general cargo such as jewelry, while others transport special cargo, which requires certain storage conditions or temperatures.

Not all products can be transported by air. Explosives and flammable substances, firearms, power banks and other potentially dangerous goods are not allowed on planes. The shipping process itself is quite straightforward: As an air-cargo business, you will work with logistics providers and local carriers that will pick up the freight at your warehouse, transport it to the airport and load it onto a plane. Your carrier will arrange for handling, storage and delivery once the goods arrive at the destination airport.

Make a Business Plan

Before getting started, you need to make a business plan that covers these aspects and others. Research the industry, define your target audience and determine what types of services you want to provide. For example, you may offer scheduled, chartered or express air-freight transportation or specialize in the delivery of certain goods, such as medical products. The key is to find a specific market to serve.

Consider your startup costs and capital requirements as well. To run this kind of business, it's necessary to have a plane or fleet of planes and build relationships with commercial carriers and logistics experts. If you're planning to operate internationally, you'll need to have contacts in the countries to which you ship. The legal requirements will vary too depending on whether you provide domestic or global delivery and the type of cargo in which you specialize.

Unless you'll operate the planes yourself, you don't need a pilot's license. However, you do need a general business license, an air-carrier and operator certification from the Federal Aviation Administration and licenses and permits for transporting specific goods. Also, make sure your pilots are fully certified and insured. Furthermore, your business plan should cover your mission statement, organizational structure, financial projections, objectives, marketing strategy and any legal requirements that may apply in your state.

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Cargo Airline Business Plan Template

Explore Options to Get a Business Plan.

Are you interested in starting your own cargo airline Business?

Legal and Regulatory Requirements

Financing options, fleet and equipment, marketing and sales strategies, operations and logistics, human resources and management.

Why write a business plan?

• Business Plans can help to articulate and flesh out the business’s goals and objectives. This can be beneficial not only for the business owner, but also for potential investors or partners
• Business Plans can serve as a roadmap for the business, helping to keep it on track and on target. This is especially important for businesses that are growing and evolving, as it can be easy to get sidetracked without a clear plan in place.
• Business plans can be a valuable tool for communicating the business’s vision to employees, customers, and other key stakeholders.
• Business plans are one of the most affordable and straightforward ways of ensuring your business is successful.
• Business plans allow you to understand your competition better to critically analyze your unique business proposition and differentiate yourself from the market.
• Business Plans allow you to better understand your customer. Conducting a customer analysis is essential to create better products and services and market more effectively.
• Business Plans allow you to determine the financial needs of the business leading to a better understanding of how much capital is needed to start the business and how much fundraising is needed.
• Business Plans allow you to put your business model in words and analyze it further to improve revenues or fill the holes in your strategy.
• Business plans allow you to attract investors and partners into the business as they can read an explanation about the business.
• Business plans allow you to position your brand by understanding your company’s role in the marketplace.
• Business Plans allow you to uncover new opportunities by undergoing the process of brainstorming while drafting your business plan which allows you to see your business in a new light. This allows you to come up with new ideas for products/services, business and marketing strategies.
• Business Plans allow you to access the growth and success of your business by comparing actual operational results versus the forecasts and assumptions in your business plan. This allows you to update your business plan to a business growth plan and ensure the long-term success and survival of your business.

Business Plan Content

• Executive Summary
• Company Overview
• Industry Analysis
• Consumer Analysis
• Competitor Analysis & Advantages
• Marketing Strategies & Plan
• Plan of Action
• Management Team

The financial forecast template is an extensive Microsoft Excel sheet with Sheets on Required Start-up Capital, Salary & Wage Plans, 5-year Income Statement, 5-year Cash-Flow Statement, 5-Year Balance Sheet, 5-Year Financial Highlights and other accounting statements that would cost in excess of £1000 if obtained by an accountant.

The financial forecast has been excluded from the business plan template. If you’d like to receive the financial forecast template for your start-up, please contact us at [email protected] . Our consultants will be happy to discuss your business plan and provide you with the financial forecast template to accompany your business plan.

Instructions for the Business Plan Template

To complete your perfect cargo airline business plan, fill out the form below and download our cargo airline business plan template. The template is a word document that can be edited to include information about your cargo airline business. The document contains instructions to complete the business plan and will go over all sections of the plan. Instructions are given in the document in red font and some tips are also included in blue font. The free template includes all sections excluding the financial forecast. If you need any additional help with drafting your business plan from our business plan template, please set up a complimentary 30-minute consultation with one of our consultants.

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Airline Business Plan

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write An Airline Business Plan?

Writing an airline business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

Market Opportunity:

Airline services:.

Highlight the airline services you offer your clients. The USPs and differentiators you offer are always a plus.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business Description:

Describe your business in this section by providing all the basic information:

Describe what kind of airline company you run and the name of it. You may specialize in one of the following airline businesses:

• Full-service carriers
• Low-cost carriers
• Regional airlines
• Charter airlines
• Cargo airlines
• Describe the legal structure of your airline company, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission Statement:

Business history:.

If you’re an established airline service provider, briefly describe your business history, like—when it was founded, how it evolved over time, etc.

Future Goals

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

Market size and growth potential:

Describe your market size and growth potential and whether you will target a niche or a much broader market.

Competitive Analysis:

Market trends:.

Analyze emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your airline business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Airline Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your services:

Mention the airline services your business will offer. This list may include services like,

• Passenger flight
• Baggage handling
• In-flight services
• Seating options
• Loyalty programs
• Special assistance

Quality measures

: This section should explain how you maintain quality standards and consistently provide the highest quality service.

Additional Services

In short, this section of your airline plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and your unique services. Identifying USPs will help you plan your marketing strategies.

Pricing Strategy:

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your airline company business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your airline business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

Operational process:, equipment & software:.

Include the list of equipment and software required for the airline, such as aircraft, baggage handling systems, flight operations systems, revenue management systems, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your airline business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

Introduce your management and key members of your team, and explain their roles and responsibilities.

Organizational structure:

Compensation plan:, advisors/consultants:.

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

This section should describe the key personnel for your airline business, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should summarize your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

Financing Needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your airline business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample airline business plan will provide an idea for writing a successful airline plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our airline business plan pdf .

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Frequently asked questions, why do you need an airline business plan.

A business plan is an essential tool for anyone looking to start or run a successful airline business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your airline company.

How to get funding for your airline business?

There are several ways to get funding for your airline business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your airline business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your airline business plan and outline your vision as you have in your mind.

What is the easiest way to write your airline business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any airline business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

How do I write a good market analysis in an airline business plan?

Market analysis is one of the key components of your business plan that requires deep research and a thorough understanding of your industry. We can categorize the process of writing a good market analysis section into the following steps:

• Stating the objective of your market analysis—e.g., investor funding.
• Industry study—market size, growth potential, market trends, etc.
• Identifying target market—based on user behavior and demographics.
• Analyzing direct and indirect competitors.
• Calculating market share—understanding TAM, SAM, and SOM.
• Knowing regulations and restrictions
• Organizing data and writing the first draft.

Writing a marketing analysis section can be overwhelming, but using ChatGPT for market research can make things easier.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Start Air Cargo Business: A Comprehensive Guide for Beginners

Have you ever considered starting your own air cargo business? If you’ve got a passion for logistics, a keen business sense and a willingness to work hard, this could be the perfect venture for you. With the rise of e-commerce and global trade, air cargo businesses have become increasingly important and profitable.

In this article, we’re going to explore the key steps you need to take to start your own air cargo business. We’ll take a comprehensive look at everything from choosing the right aircraft to hiring staff, marketing and growing your business. Whether you’re just starting out or have some experience in the business, this guide will provide you with valuable insights and practical tips to help you achieve your goals.

Starting an air cargo business is no easy feat, but it can be a highly rewarding one. You’ll be able to travel the world, meet fascinating people, and play a crucial role in the global economy. With a little guidance and perseverance, you can turn your dreams into reality and start your own successful air cargo business. So, let’s get started! Market research for air cargo business

Before starting an air cargo business, it is essential to conduct market research to understand the industry’s dynamics, potential customers, competitors, and opportunities. It enables you to develop a business plan, identify potential challenges, and determine the feasibility of your venture.

• Identify industry trends – the air cargo industry is evolving with advances in technology, regulations, and global economic changes. Common trends include the use of drones, e-commerce, and sustainable fuel alternatives. Understanding the latest trends can help you establish a competitive and innovative brand.
• Understand customer demand – knowing the needs of existing and potential customers can enable you to tailor your services to their needs. Research on what kind of products are in high demand and analyze the growth rate of the industry. Understanding customer demands, shipping profiles, customer service expectations or delivery times can help you position your business competitively.
• Study the competition – Air cargo is a hyper-competitive industry, and the key is to provide efficient services while keeping costs lower than the competition. Analyze your primary competitors, including their offerings, pricing strategies, marketing strategies, and areas where they thrive and where they fall short. It enables you to evaluate your strengths and weaknesses and determine what you need to improve to surpass your competitors.

Legal Requirements for Starting an Air Cargo Business

Starting an air cargo business involves a lot of legal requirements that must be met. Compliance with these regulations ensures that you are operating legally and protects your business from legal consequences. Here are some of the legal requirements you need to know before starting an air cargo business:

• Registration: You need to register your business with the relevant authorities. This includes registering with the Federal Aviation Administration (FAA) and obtaining a certificate of registration.
• Licensing: You need to obtain the necessary licensing from the FAA. The type of licensing you need will depend on the size of your aircraft, the type of cargo you intend to transport, and the routes you plan to fly.
• Insurance: You will need to obtain liability insurance that covers your aircraft, cargo, and any public liability claims. The amount of insurance you need will depend on the type of cargo you are transporting and the size of your aircraft.

Compliance Regulations for Starting an Air Cargo Business

Aside from the legal requirements, there are also numerous compliance regulations that you need to comply with to operate an air cargo business legally. Here are some of the commonly known compliance regulations:

• Environmental Regulations: You need to comply with environmental regulations to reduce emissions and mitigate the impact of air cargo operations on the environment.
• Aircraft Maintenance: You must comply with the FAA’s standards for aircraft maintenance to ensure that your aircraft remains airworthy and safe to operate.
• Cargo Safety and Security: You need to comply with the Transportation Security Administration’s regulations regarding cargo safety and security. You must ensure that your cargo is screened for any security threats before transporting it.

Cargo Documents and Record Keeping

Record-keeping is also a critical aspect of starting an air cargo business. You need to keep proper records of all your cargo transactions. Some of the important records you need to keep include:

• Bills of Lading: This document serves as a receipt for your cargo. It includes the details of the cargo and payment terms.
• Air Waybills: This document is used to keep track of the cargo as it moves through different stages of shipping. It includes the recipient’s details and the carrier’s information.
• Cargo Manifests: This document includes a list of all the cargo on board your aircraft. It is used for customs and security purposes.

Keeping accurate records will help you track your cargo, maintain compliance, and manage your financials. Failure to maintain accurate records could lead to legal consequences and financial losses.

Starting an air cargo business requires compliance with numerous legal and regulatory requirements. Understanding these requirements is a crucial step in getting your business off the ground. Be sure to research the applicable regulations and seek professional guidance to ensure that your air cargo business meets all legal and compliance standards.

Equipment and facilities needed for air cargo business

Starting an air cargo business requires a significant investment in equipment and infrastructure. Here are the key pieces of equipment and facilities you’ll need:

• Freighters or cargo planes: Air cargo businesses require aircraft that are specifically designed for carrying cargo. Many companies use converted passenger planes, while others use larger, custom-built freighter planes. You’ll need to determine the size and capacity of the aircraft based on your business needs.
• Ground equipment: In addition to planes, you’ll need specialized ground equipment for loading and unloading cargo. This includes items like forklifts, pallet loaders, and cargo containers. The ground equipment should be chosen based on the size and weight of the cargo you’re planning to transport.
• Warehousing facilities: Air cargo businesses require warehousing facilities for storage and processing of cargo. You’ll need to have a dedicated facility that is equipped with temperature-controlled zones, loading docks, and storage racks. Additionally, the facility will need to be spacious enough to accommodate the expected volume of shipments.

The Importance of Equipment and Facilities

Having the right equipment and facilities is essential to running a successful air cargo business. Without them, you’ll struggle to keep up with demand, and you may run into costly delays or lost shipments.

When choosing equipment and facilities, it’s important to consider not only your current needs but also your future growth plans. You’ll want to make sure that your equipment and facilities can accommodate increased demand, and that they can be upgraded or expanded as your business grows.

The Cost of Equipment and Facilities

The cost of equipment and facilities can vary widely depending on the size and scope of your business. Here are some rough estimates for each:

While these costs may seem daunting, remember that the right equipment and facilities are an investment in the long-term success of your business. By taking the time and resources to properly equip your operation, you’ll set yourself up for growth and profitability.

Choosing the Right Aircraft for Air Cargo Business

When starting an air cargo business, choosing the right aircraft is essential. Not only will it determine the amount and types of cargo that can be transported, but it will also affect operational costs and revenue. Here are some factors to consider when choosing the right aircraft for your air cargo business:

• The maximum payload capacity of the aircraft
• The range of the aircraft
• The type of cargo that will be transported

The maximum payload capacity of the aircraft is the maximum weight of the cargo that the aircraft can carry. This is a crucial factor to consider as it will determine the size of the cargo that can be transported. It is also important to note that the payload capacity is affected by the range of the aircraft. The farther the aircraft needs to travel, the more fuel it will consume, which will affect the maximum payload it can carry.

The range of the aircraft is the maximum distance that the aircraft can fly without refueling. This is important as it will determine the destinations that the aircraft can reach. It is also important to consider the demand for air cargo transportation in the destinations that the aircraft can serve.

The type of cargo that will be transported is also an important factor to consider. Different types of cargo require different types of aircraft. For example, perishable goods require refrigerated cargo planes, and oversized cargo requires cargo planes with larger doors and reinforced floors.

It is important to research and compare different aircraft types to determine the best fit for your air cargo business. Consider all the factors and the specific needs of your target market before making a final decision.

Recruiting and Training Staff for Air Cargo Business

The success of an air cargo business largely depends on the recruitment and training of staff. In order to create a team of competent and efficient employees, the following steps must be taken:

• Identify Job Roles: Begin by defining the specific roles and responsibilities for each position in your air cargo business. Determine the qualifications, experience, and skill sets required for each job. This will help you to target the right candidates for each position.
• Develop a Recruitment Strategy: A recruitment strategy should be developed to attract the right candidates. This is particularly important when starting out in the air cargo industry where there may be a strong competition for top talent. Some strategies to consider are using job portals, career fairs, and social media to reach out to potential applicants.
• Conduct Interviews and Assessments: A company can use various methods to assess potential hires like personality and aptitude tests or job sampling. Interviewees should be evaluated for their skills, experience, and qualifications as well as their attitude and aptitude for the job. This can be done through both phone and face-to-face interactions.

Once you have identified the right candidates, it’s time to train your new staff. Training should be done on two levels – job-specific training and general training.

• Job-Specific Training: This refers to the training that focuses specifically on the job role of each employee. Employees should receive training on the procedures, practices, and regulations surrounding air cargo. Training should also cover safety measures and compliance with industry regulations.
• General Training: Once the employees have job-specific training, the business owners should focus on general training that helps to develop core competencies such as customer service, communication, and leadership, as well as problem-solving.

Training Methods for Employees in Air Cargo Business

There are various training methods that owners of air cargo businesses can implement to ensure that they have a well-trained and effective workforce. These include:

• On-The-Job Training: This type of training involves new employees being paired with a mentor or trainer who has experience in the job role and is able to guide them through the learning process.
• Online Training: Online training is an effective method of delivering general training to new and existing staff, as it is flexible and can be done remotely. Computer-based training such as e-learning modules or instructional videos can deliver training content efficiently.
• In-House Training: This method of training involves hiring a professional trainer who specializes in air cargo practices and may have significant experience in the industry. Employees receive training specifically tailored to the needs of the business.

Recruiting and training are some of the most crucial steps when starting an air cargo business as they form the foundation of any company. It is important to find the right people for the job and then train them effectively to ensure that your business can thrive. With a well-trained workforce in place, companies can enjoy increased efficiency and productivity.

Each method of training has its own set of advantages and disadvantages. Choosing the right training method for your air cargo business depends on many factors like the specific learning needs of your employees, business practices, and management goals.

Formulating a business plan for air cargo business

Starting an air cargo business can be a challenging and rewarding endeavor. To create a successful venture, it is essential to formulate a solid business plan. Here are the steps to follow:

• Executive summary: This section provides an overview of your business, including your mission, target market, and key objectives.
• Market analysis: Conduct research on the air cargo industry and identify your competitors, target customers, and geography.
• Business description: Describe your company’s products or services, organizational structure, and management team.
• Marketing strategy: Outline how you plan to promote your business and attract customers, including advertising, public relations, and social media.
• Financial plan: This section should cover projected income and expenses, funding sources, and financial projections for the first few years of the business.
• Operations plan: Detail the day-to-day management of your air cargo business, including personnel requirements, equipment needs, and regulatory compliance.

Creating a business plan can be a time-consuming process, but it is essential for success. Get a professional business plan writer if needed, or seek advice and support from industry associations and mentors.

Marketing strategy for air cargo business

Marketing is an essential aspect of any business, and the air cargo industry is no exception. A strong marketing strategy will help your air cargo business stand out from the competition and attract clients. Here are some tips to help you develop an effective marketing strategy:

• Identify your target market: Knowing who your ideal customers are is crucial to tailoring your marketing efforts to their needs. Are you targeting businesses that regularly ship large quantities of goods? Or are you catering to individuals and small enterprises that occasionally need to ship goods?
• Create a unique selling proposition: What sets your air cargo business apart from the competition? Is it your quick delivery times, affordable prices, or excellent customer service? Highlight your unique selling proposition in all of your marketing materials to attract potential customers.
• Develop a strong online presence: In today’s digital age, having a website and social media presence is crucial for any business. Make sure your website is easy to navigate and includes information about your services, pricing, and contact information. Use social media to share updates about your business, such as new routes, shipping success stories, and testimonials from satisfied customers.

In addition to these tips, consider partnering with companies that complement your air cargo business, such as freight forwarders or logistics providers. Collaborating with these businesses can help expand your reach and attract new clients.

To track your marketing efforts, consider using analytics tools to monitor website traffic, social media engagement, and other metrics. This will help you identify what’s working and what’s not so you can make adjustments to your marketing strategy as needed.

A strong marketing strategy is crucial for any air cargo business looking to succeed in a competitive industry. By identifying your target market, highlighting your unique selling proposition, developing a strong online presence, and partnering with complementary businesses, you can attract new customers and grow your business.

Handling and Processing Cargo for Air Cargo Business

The key to any successful air cargo business is the proper handling and processing of cargo. Here are some important factors to consider when starting an air cargo business:

• Packaging and Labeling: To ensure safety during transport, all cargo must be properly packaged and labeled. This includes using sturdy containers, securing the cargo with padding or straps, and labeling the package with clear and accurate identification.
• Documentation: Proper documentation is crucial to the success of any air cargo business. This includes bills of lading, customs forms, and other necessary paperwork. All documents should be accurate and up-to-date.
• Handling Equipment: To move cargo efficiently, air cargo businesses need the proper handling equipment. This includes forklifts, conveyor belts, and other specialized equipment needed for specific types of cargo.

Once the cargo is properly packaged, labeled, and documented, it must be processed through the air cargo system. This includes:

• Acceptance: The cargo is checked in and verified against the documentation, and any necessary security checks are performed.
• Processing: The cargo is sorted and moved to the appropriate aircraft for transport.
• Transfer: If the cargo must be transferred to another aircraft, it is moved to the transfer area and checked against the documentation before being loaded onto the new aircraft.
• Delivery: The cargo is unloaded from the aircraft and transported to its final destination.

In addition to proper handling and processing, air cargo businesses must comply with all regulations and safety standards, including those established by the International Air Transport Association (IATA) and the International Civil Aviation Organization (ICAO).

By following these guidelines and taking the necessary precautions, you can ensure the safe and efficient handling and processing of air cargo for your business.

Pricing Strategy for Air Cargo Business

The pricing strategy for an air cargo business is crucial for profitability. The price charged for cargo transportation services must cover the cost of operations, maintenance, and expansion. To develop the right pricing strategy for an air cargo business, the following factors need to be considered:

• Costs: The pricing strategy for an air cargo business must cover the fixed costs of transportation, handling, fuel, and labor, as well as variable costs like maintenance and repair. The business owner must evaluate all expenditures and expenses and set a price that covers these costs.
• Competition: The pricing plan must also consider the prices charged by competitors in the air cargo industry. The business owner must identify the price range used by competitors to determine whether to charge a lower, equal, or higher price. Setting a lower price than competitors may attract clients, but the profit margin will decrease.
• Market demand: The level of market demand for air cargo services will determine the pricing strategy. The owner of the business must examine how customers perceive the value of air cargo services and set a price that reflects this perceived value. A business that offers a unique or valuable service may charge more for cargo transportation services because of the value-add service they provide.

To succeed in air cargo business, a business owner must have the right pricing strategy. There is no single formula for setting the right price for air cargo transportation services. Choosing a pricing plan that covers all costs, considers competitors’ pricing, and the market demand will help keep the business profitable.

Here is an example of a pricing table for air cargo business, illustrating different price ranges according to distance or weight:

This table indicates that the price per mile increases as the distance increases since the fuel and handling costs increase as well. It is essential to have a pricing strategy that covers all costs while remaining competitive and provides value for the customer.

Identifying potential challenges and risks for air cargo business

Starting an air cargo business can be lucrative, but it also comes with potential challenges and risks that need to be identified and addressed. Here are ten factors to consider:

• Competition: Air cargo is a competitive industry, and new entrants may face challenges from established players with deeper pockets.
• Regulations: Air cargo must comply with strict regulations from federal agencies, including the FAA and TSA.
• Fuel Costs: Fuel costs can account for a significant portion of the air cargo business’s expenses and fluctuate rapidly, making forecasting challenging.
• Weather Disruptions: Weather disruptions, like winter storms or hurricanes, can cause delays or cancelations, resulting in higher costs and loss of revenue.
• Technology: The air cargo business relies heavily on technology, and operators must stay up-to-date on the latest technology trends to remain competitive.
• Security: Air cargo is a high-security industry, and cargo operators must be vigilant to protect their cargo from theft or damage.
• Cargo Damage: Cargo damage can occur during transport, causing financial losses and damage to a company’s reputation.
• Operational Risks: Operational risks include accidents, equipment malfunctions, and other issues that can cause disruptions to the air cargo business.
• International Regulations: Operating an air cargo business across international borders can be complicated due to varying regulations and customs rules.
• Labour Costs: Labour costs can be high in the air cargo business, particularly in areas where there is a high demand for skilled labour.

Addressing potential challenges and risks in air cargo business

To mitigate potential challenges and risks in the air cargo business, it is essential to have a solid business plan in place that includes:

• Competitive analysis and differentiation strategies to stand out in the competitive air cargo market.
• Compliance with all relevant regulatory requirements.
• A fuel hedging strategy to minimize fuel cost fluctuations.
• A contingency plan for sudden weather disruptions.
• Investments in the latest technology to ensure efficient and effective operations.
• A comprehensive cargo security plan.
• An insurance policy that covers cargo damage.
• Regular equipment maintenance and safety training for employees to minimize operational risks.
• A clear understanding of international regulations and customs rules to operate successfully across borders.
• A labour cost strategy that balances the need for skilled labour with the need to remain cost-competitive.

The Bottom Line

Starting an air cargo business comes with potential challenges and risks, but with proper planning, preparation, and risk mitigation strategies, it can be a profitable and rewarding business venture.

Frequently Asked Questions about How to Start an Air Cargo Business

1. what are the basic requirements to start an air cargo business.

To start an air cargo business, you need to obtain proper licenses and permits, secure financing, and acquire the necessary equipment and facilities. Additionally, you must comply with all the safety regulations set forth by government agencies.

2. How do I choose an appropriate business name?

Your business name should be easy to remember and unique. It should also reflect your company’s vision and values. You may want to do a trademark search to ensure that your name isn’t already taken.

3. How do I find clients for my air cargo business?

You can start by reaching out to potential clients and building relationships with them. Attend trade shows and conferences relevant to the industry to make connections. Consider partnering with shipping agents who can help you find new clients.

4. How can I make my air cargo business stand out in the market?

Differentiate your business by offering unique services and a superior customer experience. Build a strong brand with a distinctive logo and marketing strategy. Consistently provide high-quality services that meet or exceed your clients’ expectations.

5. How do I manage my inventory and track shipments?

Utilize advanced technology to track your inventory and shipments, including real-time tracking updates and electronic data interchange (EDI) systems. Consider hiring a logistics manager or outsourcing your logistics to a third-party provider.

6. What are the funding options available for starting an air cargo business?

You can seek out loans from banks or other financial institutions, tap into your personal savings, or consider fundraising through equity investments. You may also be able to secure government grants or other forms of financing.

7. What are the biggest challenges facing the air cargo industry?

The air cargo industry faces several challenges, including global economic fluctuations, complex regulations, and competition from other modes of transportation. Airline safety concerns and security regulations also impact the industry.

Closing Thoughts

Thank you for reading this guide on how to start an air cargo business. Starting a business is never easy, but with the right strategies and mindset, you can move forward with confidence. Remember to stay focused and dedicated to providing top-notch services to your clients. We hope our guide has provided you with useful insights, and we wish you success in your new venture. Don’t forget to visit us again for more useful articles.

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How to Start an Air Cargo Business in 5 Steps

How to start an air cargo business?

It is a daunting task to start an air cargo business in the United States. Simply knowing the basics is not sufficient; you have to be proactive and knowledgeable about every aspect that goes on. Air cargo businesses are not limited to the conventional air-freight traffic; it extends to the latest trends that are coming up, such as digital record-maintenance and others.

You could be planning to emerge as a giant in the air freight business, or you expect yourself to be an entrepreneur only. It doesn’t matter; you ought to have the financial cushion and technology to crack into this business. 

Apart from finances and technology, you are supposed to have an in-depth understanding of the local and global market, even if you want to restrict your business to the country. Niching down is another advantage, and you can stand out in the market. For instance, you deal only with medical supplies or essentials; then you can beat the terrible competition around you. 

We will elaborate on the entire process and provide you with a sample business plan in this article. But before that, let us skim through the benefits of starting an air cargo business and the challenges involved in it. 

Also Read: 10 Aviation Related Business Ideas you can Start Now

Benefits of starting an air cargo business: 

1. creates value for customers and yourself .

Air cargo is a service that very few people provide. When you help out a customer to move his goods and resolve a related issue, you work on something different, and that adds value to your life. The more customer satisfaction, the better you feel about yourself. 

2. Better client retention

When a client is satisfied and happy with the services you provide, there are no chances that they will shift to another service provider. So, your services are distinguishable, and your clients will stick to your services for an extended time. 

3. Provides an interesting outlet: 

You learn more about other businesses and serve plenty of clients. As a result, there is something new to look for every day, and you don’t feel bored with the things you do at your workplace. 

4. Provides an active workstyle

Air cargo business is not a desk job. It requires frequent movement of goods as well as requires you to move away from the desk. You feel energetic. 

5. An interpersonal way of working

Air cargo business requires you to interact with clients and staff on a regular basis. If you are into meeting and talking to people, then this business idea is for you. 

6. Continuous business

Even in low economic times, air cargo businesses never go without work. 

Challenges involved in an air cargo business 

It is wrong to predict that everything will be fine and there will be no obstacles when you set up a business. Problems will crop up, challenges will arise, and you will have to be ready for it and face them boldly. Following are a few challenges you will have to face, but you can surely overcome them through careful business planning and building a strong mindset. 

Technology issues:

With new trends coming up, it could happen that the systems you use become obsolete. Installation of new systems, training staff to utilize them well, and getting acquainted with the new way of work could be a severe challenge. 

Data security issues may also arise, and it could be hampering your business. It is always important to protect client-specific data as any leakage can cause serious issues to your company image. 

Difficulty to maintain standard revenue system: 

Let us tell you the margins in an air cargo business are around 10 percent, and it could be a hurdle to maintain the profits. The key is to avoid any negligence and be proactive enough to retain your existing profits. 

Staff turnover issues:

The air cargo industry is huge, but employees come, and go the place and you have to accept the fact. It is expensive to recruit, train, and re-train employees, and so, you have to set up relevant systems for them. Moreover, you can set up a rewarding system to appreciate the work of your employees. 

Steps to run an air cargo business:

1. collect maximum information about air cargo businesses and regulations .

Air cargo is a dynamic industry, and it is better if you acquaint yourself with it before entering into the same. You need to have comprehensive knowledge of the industry, the overall market, the rivals, and the audience you will be serving. Spend time researching on the internet and talking to mentors and experienced persons in the industry. 

Remember that you won’t be competing only against the global airlines but also with domestic airlines and maritime transportation services. So, it is better if you do not under-estimate any of them and be prepared financially and technically to compete with them. 

Note which products can be transported through the air and which cannot. We suggest picking up a niche in this business as you can’t ‘do it all.’ Hence, it is advisable if you stick to a particular kind of goods that most others do not deal, and specialize in the same. You will have a set of clients sticking to your services and not bothering about others. 

2. Think about the money matters

It is better if you understand beforehand that air cargo businesses require a great deal of money. Hence, there is no issue in setting up this business if you have a financial cushion and are really interested in entering this industry. 

You need to spend on employee recruitment, training, website creation, retail business and inventory expenses, office space expenses, equipment, vehicles, and others. 

Ensure that you have a systematic funding plan to enable the above tasks to happen. Also, note that the time taken to build this business is longer than the others. Hence, do not think that you can set up this business overnight; it might take around 1 to 2 years to build this business. 

3. Write a business plan 

A business plan is critical for every business that takes place. And when it comes to air cargo, you have to be diligent and specific while writing a business plan. Mentor consultation and seeking expert advice are must for preparing a realistic and effective business plan. 

Following are the components of a business plan: 

• Industry Overview – Since the air cargo industry is for both large-scaled investors and small business owners, you have potential in the same. 
• Executive Summary – Write about your company, vision, and mission and more about details such as license, names of founders and financers, and other details. 
• Products and services – What are your service offerings? Find out an appropriate niche you are interested in.
• Staff employed – Write about the employees, managers, and workers you will need for the organization. Allocate jobs and responsibilities to each member in this stage itself to avoid further confusion. 
• Challenges in the industry – The analysis of possible changes in the air cargo industry should be done by you and not through generic research. When you do the market analysis, you will figure out what kind of challenges you will be facing in the future. 
• Market analysis – A significant activity, market analysis is a must-do thing for every budding entrepreneur. You not only study the market trends but seek an idea with whom you will be competing in the future. 
• Target audience – If you choose a niche, you can find out your target audience immediately. Specify a target audience, or you will not know whom you are selling your services to. 
• Sales, marketing, advertising plans – All these are necessary if you want to step into the market and get new clients. Remember that there is no perfect strategy, and trial-and-error is an essential thing to do. 
• Pricing strategy and business revenue model – Pricing strategy can be fixed, but you might have to upgrade it later. So, don’t worry whether your pricing strategy is right or wrong. Choose a business revenue model that suits your requirements and not because it is trending in the market. 
• Funding – You have to be stringent when it comes to funding, as procrastination can tamper with your business. 
• Projections – Set milestones so that you know where you and your business are heading. It doesn’t mean you have to aim tremendously big, but you have to improve with the previous version of yours. 

4. Set up the corporation

When you are done with the planning, it is time to take action by setting up the corporation or partnership, depending upon your choice of personal liability. Ensure that you choose a unique business name and reflect enough on your brand image you want to project for future clients. 

While setting up the corporation, take care of opening your business account and seeking requisite licenses and permits. 

If your state wants you to take additional certifications or licenses, go for it.  Always be vigilant while following rules and regulations governing the state. 

In conclusion, setting up an air cargo business requires you to be financially and knowledge-wise strong beforehand. But we suggest going for this lucrative opportunity. 

To start an air cargo business you need to have a solid understanding of the logistics and regulations involved in the industry. You should have experience in the freight and transportation sector, as well as knowledge of relevant international standards, such as IATA regulations, Dangerous Goods regulations (where applicable), customs and excise regulations and any other applicable laws. Additionally, you should be well-acquainted with the market and know what services are offered by your competitors.

Depending on the country you are in and the services you are providing, you may require a variety of permits and licenses. Some of the most common include an Air Operator’s Certificate (AOC), which is issued by the relevant aviation authority (for example, the US Federal Aviation Administration) and enables an airline to operate. You may also need a freight forwarder license, a security clearance certificate and/or duty drawback accounts. In addition to these, depending on the goods being shipped, you may also require specific customs clearance certificates.

Winning customers for your business involves both proactive and reactive marketing. For example, you may wish to leverage social media platforms such as LinkedIn, Instagram and/or Twitter to reach potential customers, or use search engine optimization (SEO) to help customers find your website. You should also make an effort to build relationships with existing customers, by delivering a reliable and professional service that instils trust. Additionally, it can be beneficial to join an association or network of like-minded professionals in order to expand your reach and learn from the experience of others.

Starting an air cargo business is a complex undertaking that involves a range of challenges. Firstly, you will need to work hard and overcome various legal and regulatory requirements. Additionally, depending on the type of goods being shipped, you may need to identify potential customs and security issues that could hamper your operations. Further challenges include the need to build a reliable and reputable network of industry contacts, and the requirement for a robust financial system that can be trusted by clients and ensure that payments are processed quickly and efficiently. Lastly, it is important to remember that the air cargo market is highly competitive and requires constant innovation to ensure you remain ahead of your competitors.

From a financial perspective, costs will vary greatly depending on the size and scope of your business. However, some of the most common costs associated with starting an air cargo business include obtaining the necessary permits and licenses, covering aircraft, facility and equipment costs, appointing staff, and investing in software or other systems. In addition, you may need to budget for insurance, marketing, customer service, warehousing and distribution costs, taxes, and regulatory compliance.

Developing an efficient operational process should focus on creating an optimized work flow that is tailored to the size and scope of your business. This should include everything from customer onboarding, to cargo processing, transport and delivery. To ensure that all processes are efficient, it is important to develop good data and tracking processes and to employ a customer relationship management (CRM) system that tracks customer interactions throughout the entire supply chain. Additionally, the use of software for automation and analytics can help you better understand and streamline your processes, enabling you to reduce costs and increase efficiency.

A customer-oriented approach is essential for success in the air cargo industry. Taking a customer-centric approach means understanding and being responsive to the customer’s needs and striving to exceed expectations. This should include proactively addressing any customer complaints and issues quickly and effectively, and providing services that fulfil customer requirements and keep them coming back. Additionally, ensuring that the customer experience is consistent, easy to use and tailored to their individual needs helps to build customer loyalty and trust.

Ensuring the safety of shipments is of paramount importance in the air cargo industry. This should start with ensuring that all staff members involved in the shipment process receive the appropriate training and certification, including training in safe handling and loading of cargo. Additionally, all cargo should be packed, handled and secured securely and in accordance with relevant regulations, and routed in a way that minimizes the risk of damage or loss. It is also important to maintain comprehensive policies and procedures for inspecting, securing and protecting cargo, and to make sure that stability control systems, smoke and fire detection systems and other safety protocols are in place in all areas where cargo is stored or handled.

An effective communication system is essential for any air cargo business. This should include an effective way of communicating with customers, stakeholders and other external parties, as well as internal communication within the team. For example, you may need to use an automated system for tracking and tracing shipments, as well as sending automated messages to customers regarding flight delays or changes. Building a strong communication system starts by clearly documenting all processes, developing clear roles and responsibilities within the team and establishing systems for tracking, measuring and analysing performance. Additionally, having good customer service practices in place helps to ensure that customers can easily get in touch and receive a prompt response to any queries.

Several key factors that can determine success or failure when starting an air cargo business include developing an effective operational process, implementing efficient communication protocols, staying up to date with the latest industry trends and employing a customer-oriented approach. Additionally, you need to build a strong financial system, invest in robust infrastructure and technology, create a sustainable logistics network and maintain partnerships with reliable vendors and suppliers. Lastly, it is important to be agile and innovate where necessary, so that your business is in the best position to respond to the ever-changing air cargo industry.

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Airline Business Plan: Writing Effective Airline Business Plans

To write a successful airline business plan , you must take several important trends in the airline industry and broader economy into account. What affect will these important trends have on the new airline?

• Continuing volatility in oil and other commodity markets
• A decline in personal disposable income as the economy slows
• Anxiety over flying and travel restrictions as a result of terrorist attacks and war
• Recent financial hardships and bankruptcies of major airline companies

Important Airline Business Plan Questions to Answer

To write a convincing aviation business plan and successfully launch your new airline, you must have confident answers to the following questions:

• What is the market demand for your new airline business?
• How will you prove the feasibility of your new airline?
• What kind of financing will you need, and how much?
• What types of investors will you seek capital from?
• What relevant past experience does your management team have, which you can leverage in your business plan?
• What strategic partnerships will you forge?
• What is your marketing plan and how will you grow your airline’s customer base?
• What are your airline’s future financial projections?
• What is your new airline’s “unfair competitive advantage” and how will you create barriers to entry?

How to Finish Your Airline Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Click here to finish your business plan today.

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how a Growthink business plan consultant can create your business plan for you.  

Airline Business Plan FAQs

What is the easiest way to complete my airline business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Airline Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of airline you are operating and the status; for example, are you a startup, do you have an airline that you would like to grow, or are you operating a chain of airlines?

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How to Start an Air Cargo Business: A Step-by-Step Guide

By Happy Sharer

Introduction

The demand for air freight services has been steadily increasing in recent years. With the growth of e-commerce and global shipping, starting an air cargo business can be a great opportunity to capitalize on this trend. Whether you’re looking to start a large-scale operation or a smaller business that offers specialized services, there are several steps you’ll need to take to get your business up and running.

What is an Air Cargo Business?

An air cargo business is any organization that transports goods or people by air. This can include international airlines, domestic carriers, freight forwarders, and charter companies. The types of goods carried can vary, from mail, parcels, and food to hazardous materials, live animals, and even military equipment. Depending on the size and scope of the business, these services may be provided locally, regionally, or even globally.

Overview of the Steps to Starting an Air Cargo Business

Starting an air cargo business is a complex process that involves a number of steps. Below is an overview of the steps you’ll need to take to get your business up and running:

• Research the local regulations and licensing requirements for air cargo businesses.
• Create a business plan for your air cargo business.
• Find a suitable location to operate your air cargo business.
• Acquire necessary equipment and vehicles to operate your air cargo business.

Research the Local Regulations and Licensing Requirements for Air Cargo Businesses

Before you can start your air cargo business, you’ll need to make sure you understand the local regulations and licensing requirements. Depending on your location, you may need to obtain certain permits or licenses before you can legally operate your business.

Check with Your Local Government

The first step is to contact your local government and inquire about any regulations or licensing requirements for air cargo businesses. You should also find out if there are any other restrictions or requirements related to operating an air cargo business in your area. For example, some areas may require businesses to obtain a special permit or license to transport hazardous materials.

Identify Any Necessary Permits or Licenses

Once you’ve identified any necessary permits or licenses, you’ll need to obtain them before you can legally operate your air cargo business. Depending on your location, this may require filing an application, providing proof of insurance, and/or completing additional paperwork. Make sure to check with your local government to determine what is required.

Create a Business Plan for Your Air Cargo Business

Creating a business plan is an essential step in starting any business, and an air cargo business is no exception. A well-thought-out business plan will help you identify your objectives, estimate start-up costs, and develop a marketing strategy.

Outline Your Objectives

Your business plan should begin by outlining your objectives. What do you hope to accomplish with your air cargo business? Do you intend to offer local, regional, or global services? What type of cargo will you be transporting? Answering these questions will help you create a clear vision for your business.

Estimate Start-up Costs

You’ll also need to estimate the start-up costs associated with your air cargo business. This includes the cost of purchasing aircrafts, vehicles, and other necessary equipment, as well as any licensing or permitting fees. Additionally, you should factor in the cost of hiring qualified personnel to operate the equipment.

Develop a Marketing Strategy

Finally, you’ll need to develop a marketing strategy to attract customers to your air cargo business. Consider creating a website or social media accounts to advertise your services. You might also consider attending trade shows or partnering with other businesses to promote your services.

Find a Suitable Location to Operate Your Air Cargo Business

Once you’ve created a business plan, you’ll need to find a suitable location to operate your air cargo business. There are a few factors to consider when selecting a location, including accessibility to customers and security of the facility.

Consider Accessibility to Customers

When selecting a location, you should consider how accessible it is to potential customers. If you plan on serving local customers, you’ll want to choose a location that is easily accessible by car or public transportation. If you plan on offering regional or global services, you’ll want to choose a location that is close to an airport or other transportation hub.

Choose a Secure Facility

It’s also important to choose a secure facility to operate your air cargo business. You’ll want to make sure the facility has adequate security measures in place to protect your equipment and personnel. Additionally, you should make sure the facility is able to accommodate any necessary safety protocols, such as proper ventilation or temperature control.

Acquire Necessary Equipment and Vehicles to Operate Your Air Cargo Business

Once you’ve found a suitable location, you’ll need to acquire the necessary equipment and vehicles to operate your air cargo business. This includes aircrafts, trucks, and other necessary equipment.

Purchase Aircrafts, Trucks, and Other Necessary Equipment

You’ll need to purchase aircrafts, trucks, and other necessary equipment to operate your air cargo business. Make sure to research the different options available and select the best equipment for your needs. Additionally, you may need to invest in additional safety equipment, such as fire extinguishers and emergency response kits, depending on the type of cargo you plan on transporting.

Hire Qualified Personnel to Operate the Equipment

In addition to purchasing the necessary equipment, you’ll need to hire qualified personnel to operate it. Make sure to thoroughly vet any potential employees to ensure they have the necessary qualifications and experience to safely and effectively operate the equipment. You may also need to obtain additional certifications for certain types of cargo.

Starting an air cargo business is a great way to capitalize on the growing demand for air freight services. To get your business off the ground, you’ll need to research the local regulations and licensing requirements, create a business plan, find a suitable location, and acquire necessary equipment and vehicles. With the right preparation and dedication, you can launch a successful air cargo business.

Recap Steps to Starting an Air Cargo Business

• Research the local regulations and licensing requirements.
• Create a business plan.
• Find a suitable location.
• Acquire necessary equipment and vehicles.

Summary of Benefits of Starting an Air Cargo Business

Starting an air cargo business offers numerous benefits. Not only can you capitalize on the growing demand for air freight services, but you can also enjoy the freedom and flexibility of running your own business. With the right preparation and dedication, you can launch a successful air cargo business.

(Note: Is this article not meeting your expectations? Do you have knowledge or insights to share? Unlock new opportunities and expand your reach by joining our authors team. Click Registration to join us and share your expertise with our readers.)

Hi, I'm Happy Sharer and I love sharing interesting and useful knowledge with others. I have a passion for learning and enjoy explaining complex concepts in a simple way.

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Ahead of the curve: Getting cargo revenue management right as the cycle turns

Cargo airlines enjoyed a period of high revenue —driven by scarce capacity—during the pandemic. But after the boom of the past three years, yields are gradually falling from the 2021 peak. Belly cargo capacity is recovering, and demand is softening, leading to uncertainty as cargo airlines brace for the risk of a “back to normal” scenario.

This raises the issue of how cargo airlines can make sure that the “back to normal” is not a “hard landing”. In this environment, a new approach to revenue management could be the key that allows airlines to adjust their commercial strategies and continue to benefit from opportunities in the market.

Over the past three years, the cargo market has been capacity driven and airlines with significant capacity pulled ahead of competitors. Recently, there seems to be a transition back to a demand-driven market: yields have declined, demand has slowed, and belly capacity continues to recover (Exhibit 1). Moving forward, rates are expected to decline further, although will likely remain above 2019 levels. 1 McKinsey analysis based on IATA and WorldACD data.

What this means is that new ways of working may be required for individual cargo airlines to remain competitive in this changing market. As belly capacity returns, the market will likely become increasingly competitive, and airlines that don’t have a robust commercial and revenue-management strategy in place might lose out and see their yields diminish faster than the average.

At the same time, many cargo airlines have invested considerably in their digital strategies since the pandemic began. In particular, online sales have boomed, and consequently, cargo airlines have access to much more data than was possible three years ago. A recent Freightos WebCargo report found that digitized air capacity across the industry reached 57 percent in Q1 2023, compared to 38 percent in Q1 2022, and only 3 percent in Q1 2019. 2 “WebCargo digital air cargo (DAC) monthly,” WebCargo, February 2023.

Taken together, the turning point in the market and the rise of digitization in the industry point to today being a crucial time to formulate next-generation revenue management for air cargo.

This article details three areas where cargo airlines can focus their efforts to re-think revenue management, specifically by relying on accurate forecasting to form actionable insights; using real-time monitoring for fast decision making; and taking a customer-centric approach.

Would you like to learn more about our Travel, Logistics & Infrastructure Practice ?

Using new tech to improve forecasts.

Forecasting demand and supply is the starting point for a cargo pricing and revenue-management strategy. However, cargo demand is extremely challenging to forecast, for several reasons.

First, booking tends to be a last-minute process and late bookings are a consistent feature in this environment. Typically, two weeks before departure, less than 40 percent of an airline’s capacity has been booked. Second, the market is volatile. Air freight is often used by shippers as a last-minute restocking option, which depends on many economic factors, so the need for air freight can change almost overnight. Third, the air freight market is composed of dozens of industries, and thousands of commodities, each with different drivers that make demand difficult to predict.

But, airlines can leverage technological advances to improve demand forecasts and deal with volatility. The availability of more granular data sources, and the advance of Machine Learning (ML) algorithms, make it possible for cargo airlines to pursue better demand forecasting solutions to gain deeper insights—and ultimately make more nimble revenue decisions.

For instance, due to the increase in online sales, cargo airlines have more data available about their customers’ behavior. This is particularly the case for airlines that have their own sales portals. Through digitalization, the air cargo industry has an opportunity to build a 360-degree view of demand across the entire customer journey which includes data that is above the sales funnel, such as which flights customers search for, lead times, how the cargo request was made, how long it took to fulfill, and if there was a cancelation or modification. Airlines can also look at step-based conversion rates showing how the airline performs at each stage of the sales funnel (discovery, flight selection, product selection, price offer, etcetera). Having all of this data in one place means that cargo airlines can improve their customer experience: better understand what customers want, and when they are likely to want it. This is the type of insight that companies in B2C industries, such as passenger airlines or hotels, typically have access to and cargo airlines could consider using a similar approach and leaning into the e-commerce aspect of sales.

It’s clear that Artificial Intelligence (AI) and ML are transforming sectors and industries across the world—and cargo airlines could harness the power of AI to better predict demand. A McKinsey Global Institute study identified that the travel, transport, and logistics sector has the most potential for incremental value from AI, amounting to $1.8 trillion in value. Within this sector, roughly half of this value is likely to come from commercial applications such as customer service and pricing. 3 “ Notes from the AI frontier: Insights from hundreds of use cases ,” McKinsey Global Institute, April 2018.

Cargo airlines are well positioned to increase forecasting accuracy through AI. For example, AI could make sense of the thousand or more commodities, as well as their inter-dependencies, within the supply chain. For instance, AI could determine how trends in raw materials and semi-manufactured products in one country could lead to a growth or decline in specific finished products in another—and how this would influence cargo demand.

There are a few pointers airlines could keep in mind when using AI for demand forecasting. It is important to select the right data as input, as it needs to be sufficiently granular. And using a blend of internal and external data can lead to greater forecasting accuracy as early as two weeks out, despite very few bookings being made at that time. Internal historical data is very important for improving forecasting quality, which tends to be overlooked.

Considering that the accuracy of ML algorithms increases with the amount of quality data being used, airlines will probably find that AI-enabled forecasts get more accurate over time. One cargo airline managed to improve its ability to predict demand significantly through the use of AI. Initially, the AI tool reduced the airline’s forecasting error from around 20 percent to 14 percent, and once it went live it continued to improve in accuracy.

The airline found that the AI model was much better at predicting seasonality patterns through multi-layered algorithms than traditional models. This allowed it to predict volume patterns to a high degree of accuracy from one to four weeks before departure. Furthermore, incorporating data on trends such as booking cancellations improved final volume predictions.

There are other untapped opportunities to leverage internal data, such as by predicting no-show rates for bookings by lane and by customer. Another airline followed this approach which led to better capacity management and, ultimately, improved profitability. Predicting cancellations allowed the airline to increase “overbooking” while still controlling for the risk of penalties (Exhibit 2). This, together with other specific use cases, helped to uplift load factors by around 8 percent after a 12-week pilot. Based on this success, the airline was able to identify potential network-wide savings worth tens of millions of dollars.

Finally, airlines need to make forecasting actionable. There is often a trade-off between pursuing the perfect forecast and moving ahead and making the right decision based on the information at hand. A fact of life is that pricing teams need to be prepared to be wrong, some portion of the time. The key is to make better-informed decisions at the right time.

Freight forwarders’ earnings amid carrier-rate volatility

Monitoring supply and demand in real time.

Booking curves have changed post-pandemic and these changes are likely to accelerate, given that the market is at a turning point. This is why it is now more important than ever for airlines to continuously monitor capacity booking, and be even more proactive when it comes to simulating demand—and do it more frequently.

For example, a cargo airline’s booking curve changed significantly over the course of the pandemic. In 2021 and 2022, the pace of booking accelerated and exceeded 2019 levels at the two-week before departure point. At one week before departure, the share of weight booked was considerably higher compared to pre-pandemic levels, resulting in less urgency to fill the flight at the last minute (Exhibit 3). In this particular example, any last-minute price reductions would probably have been less effective than in previous years, as most of the airline’s customers were already booking closer to the flight date. This example also illustrates the last-minute nature of the industry, where more than half of a flight’s capacity is often booked in the last week.

Given this operating environment, revenue-management decisions are highly sensitive to changes in demand and supply. Therefore, in the current uncertain market, airlines could improve revenue management by evaluating supply and demand in real time, at a granular level.

Airlines could, for instance, use dashboards to monitor how flights are being filled, and where the biggest opportunities lie, based on what capacity has been booked and what is expected, at any point in time. Forecasts, or estimates of what is expected, could be based on lagging indicators (historical data) and also on the leading indicators made possible by the trove of new data that comes with digitizing capacity.

Airlines could also be more proactive when it comes to stimulating demand. For example, an airline could evaluate how consistent customers are in providing their cargo and compare that to real-time data. If a customer has consistently provided cargo on the same lane 12 days before departure, but the revenue-management team notices on day 10 that the customer has not provided the cargo—it is time to act. Sales teams could contact the customer and ask what they need, if their needs have changed, or how the airline could tailor its products. Processes need to be in place to alert the sales team if a flight is not filling up as expected or to signal that they need to review pricing guidelines if a flight is filling up too quickly.

There is significant value at stake from acting at the right time. In an industry where critical decisions are made in the last week before a flight, airlines need to be agile and well-informed. Typically, yield volatility is at its highest in the last week—the spread is relatively stable until five days before departure when it starts to widen (Exhibit 4). Often, the final cargo shipments that are booked to fill a flight have the highest yield. This means that pricing and revenue-management decisions made in this timeframe have the most potential to either be very profitable or leave value on the table.

McKinsey analysis suggests that if airlines can focus on the yields that are below average in the last week before departure, and improve this by 30 percent, then overall revenue can increase by between 7 and 8 percent.

In today’s market, airlines need to be extremely fast to respond to shifts in supply and demand, and make the most of sudden opportunities, but decisions need to be carefully calculated. Airlines would benefit from having the data and analytics in place to enhance decision making, and also by having internal processes and a decision framework in place to coordinate among sales, network, and revenue-management teams. These measures would help to break down silos and ensure swifter response to market conditions.

Digital can be a great lever in achieving this, but only if airlines are equipped to successfully leverage the data that is available. For instance, if a flight departs on Thursday but most customers are searching for a Friday departure, that is critical information that needs to be passed on to the network team. Feedback loops are essential between teams for understanding the customer journey and gathering data on each aspect of it.

Putting the customer front and center

Building on the insights gathered about customers, their needs, and stages of the customer journey, airlines can form a comprehensive revenue strategy that puts the customer front and center.

Typically, cargo airlines base revenue-management decisions on flight profitability. They set price entry conditions based on expected demand and operating cost—as a basic principle.

However, airlines may struggle with managing revenue at an account level. For instance, decisions around how to price a large account’s cargo on a high-demand flight—while the same customer also provides volumes on other low-demand flights—are not so clear cut.

This is something that passenger airlines have figured out within their corporate sales programs, essentially looking at the longer-term customer relationship and the incentives offered, and overlaying that with the predictions generated by their pricing and revenue-management models for any individual flight.

To maximize effectiveness, cargo airlines could keep the following three lenses in mind when making revenue-management decisions: flight profitability, customer value, and product offering (Exhibit 5).

At its most basic level, revenue management is often based on destination origin or flight profitability. This approach relies on models, fed by historical data, that show demand and supply levels—essentially, how fast the flight is filling up. This is mostly valid for lower-demand flights and/or flights that have few large accounts.

However, for flights with large accounts and/or high demand where many shipments may compete for the same capacity, airlines could consider paying attention to the customer lens. This entails looking at the network-wide contribution of any key account. By doing so, airlines could prioritize customers with whom they have a strategic fit, for instance there may be a significant overlap between the customer’s cargo and the airline’s network in that they represent growth in markets that the airline may find attractive.

The airline could run simulations to prioritize high-value customers, based on profit contribution by origin destination across the network, augmented by a view on projected growth by account. In this way, the airline could make revenue-management decisions that would prioritize clients that are likely to grow in line with the airline’s network.

Products and deal structures could then be purpose-built and customized to clients’ requests. Again, for this to be effective, revenue-management and sales teams would need to work together and have a feedback loop in place. Sales staff could be more proactive in identifying customer potential, beyond traditional revenue-management guidelines. What may prove most effective is to pair up sales and revenue-management teams for a specific large account, to run the necessary simulations and bring fresh perspectives to bear.

In terms of product profitability, airlines could take into account products and services they provide, such as special handling verticals, which have their own value drivers and cost drivers. Other ancillaries could also be pursued—such as purchase of sustainable aviation fuel or flexible capacity options. Thanks to booking portals, cargo airlines now have a better understanding of what their customers want, and may be willing to pay for. Perhaps the industry can take inspiration from how passenger airlines are able to use passenger data to anticipate needs and preferences. Cargo, by definition, is B2B but an approach that leans toward B2C in terms of understanding customer profiles and personas can help cargo airlines to re-think their offerings and pricing structure in the digital age.

Here, AI/ML can be helpful in managing large amounts of data as inputs that can segment customers’ potential, not only based on historical revenue but also on a wide range of variables including booking patterns, route portfolio, cargo density, and predictability. For instance, a medium-sized customer with a diverse portfolio of routes, products, and verticals might have greater potential than a large customer operating in a small number of markets and with high share of “no shows”. This type of segmentation—that allows airlines to prioritize high-potential customers—is extremely important as customers are likely to review their booking needs and capacity-acquisition strategies in the changing market.

The time to act is now: A potential path ahead

In a volatile and uncertain market, where yields are likely to decline, each cargo airline will have to act wisely to protect its position. This requires airlines to be agile, make decisions quickly, and to implement new ways of working. Cargo airlines looking to re-think revenue management could consider the following three priorities to guide them on their journey:

• Harness the power of data. As a starting point, airlines can set about gathering high-quality data that can act as input for decision making. They can also survey all internal and external granular data sources and determine what could be of use, specifically in their context.
• Assess the value of advanced analytics. Airlines can assess how new tools such as ML can be applied to various areas of commercial decision making.
• Re-design internal processes. Processes can be designed around agile decision making and aim to break down silos between departments to gain a clearer view of the airlines’ customers and their requirements.

Naturally, the recipe for optimizing revenue management might be different for each airline. A good starting point could be to identify a long list of commercial use cases grouped according to three objectives: to improve capacity utilization, increase yields, and enhance customer experience. Each use case could be trialed and tested to prove its value on a small scale. But airlines shouldn’t stop there: what comes next is key. Choosing the right use cases to scale up is critical, and to do so while continuing to build digital capabilities and work in an integrated manner across the business.

Despite the challenges that cargo airlines could be facing in the coming months, there are opportunities to improve revenue management to remain competitive and profitable. This depends on a new approach to digital, and on ensuring that the customer remains center stage when making revenue-management decisions.

Soufiane Daher is a consultant in McKinsey’s Amsterdam office, Ludwig Hausmann is a partner in the Munich office, and Mark Williams is an associate partner in the Atlanta office.

The authors wish to thank FLYR Labs for the examples on which this article is based.

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Air Cargo Business Plan

Air cargo business is one of the businesses with a restriction to locations with airports, but this restriction really does not matter as a lot of people prefer getting their goods flown to them because of the swiftness.

The industry makes a profit off providing air transportation for cargo, either commercial or private cargo. The growth of this industry is heavily dependent on the manufacturing sector, consumption, economic upturn which will increase purchasing power, import and export will provide opportunities for the industry.

Running an air cargo company will definitely incur huge capital costs as it is capital intensive and really challenging, and cannot be operated on a small scale. These characteristics should not discourage potential investors from investing in the industry as it is very rewarding.

Although it has been noted that it is capital intensive and challenging as investors and entrepreneurs would have to own their own planes, aspiring entrepreneurs can start as middlemen between made cargo operators and customers.

1.0. Executive Summary

Get Across Inc. is a standard air cargo services company registered, licensed, and permitted to operate as an air cargo service company in Nigeria and the countries in which our services will be extended. The company will be located in Gwagwalada, Abuja. The location was chosen as it was strategically poised to garner trust and ease of access to airstrips. We are in business to make profits and also provide services like domestic deliveries, international deliveries.

Our customers can rest assured they will get the utmost value as we will provide the best and quality services at affordable and reasonable rates. The safety and proper handling of our customers’ cargo will be our priority and provide them excellent services and this will exhibit the competence of our company and cement our integrity.

2.0. Products and Services

Established to realize and exponentially maximize profits in the industry we wish to compete with leading companies in the industry and we will ensure that we execute and surpass the expectations of our customers.

The services we render are listed below;

• Cargo air transit
• Scheduled airfreight movement and delivery
• Booked airfreight services

3.0. Our Business Structure

We are in the industry to deliver excellent services and we are aiming to achieve this by getting the best and experienced hands on deck. We will ensure we hire qualified, hardworking, and creative individuals. The following positions will be available for occupancy at our establishment;

• Chief Operating Officer
• Admin Manager
• Air Cargo and Logistics Manager
• Marketing and Sales Executives

4.0. SWOT Analysis

Get Across Inc. is in business to become one of the leading air cargo companies in the whole of Lagos and we are fully aware that it will take the right business concept, management, and organization – structure to achieve our goal.

The presence of other several companies that are in the same industry as us and can also boast of impeccable and unique craft are located in the same area we are intending to kick off operations which is why we are following the due process of establishing a business. This is the summary of the SWOT analysis that was conducted;

One of the strengths we will rely on its strong management and this is the best we can ever get as it is from within and this will help provide quality consistently throughout whatever we do.

Also, another of our strengths is our business’s location; our proximity to airstrips is a major profit.

The fact that we are a new air cargo company we will need time to gain ground, build trust and be able to compete well with our competitors. Also, most of the capital will be directed into acquiring our planes and mechanical maintenances thus not enabling us to funnel a lot of money into marketing

Opportunities

The opportunities open to us as an air cargo company in Nigeria are limitless the prevalence of online shopping and new technology is a major factor that contributes to the thriving of the company. And also our location exposes us to arrays of opportunities.

Like any other business, one of the major threats that we are likely going to face is an economic downturn. It is a fact that an economic downturn affects purchasing or spending power. Another threat that may likely confront us is the arrival of a new air cargo company in the same location where ours is located. So also, unfavorable government policies may pose a threat for businesses such as ours.

5.0. Target Market

Although anyone who has a cause to receive or move goods faster within the borders and beyond the borders of the country is a prospect. We have narrowed our target market to the following;

• Warehouse owners
• Manufacturers
• Government agencies

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Building a cargo airline step by step

Kirsten de bruijn, who joined westjet airlines to head its cargo business in may this year, says it is super exciting to build a cargo airline like a start-up company..

Kirsten de Bruijn, Executive Vice-President of Cargo at WestJet

When Kirsten de Bruijn joined WestJet Airlines, a Canadian airline headquartered in Calgary, in May 2022 to head its cargo business, she carried with her a large portfolio of air cargo experience and more than 15 years in the airline industry that includes Qatar Airways Cargo, Emirates SkyCargo and Air France - KLM Martinair Cargo. During her time at Qatar Airways Cargo, de Bruijn managed the airline's global cargo sales organization including product development and marketing and was responsible for the freighter network planning department. At Emirates SkyCargo she served as Vice President, Cargo Pricing and Interline. She completed her Bachelor's degree from Zuyd Hogeschool and Global Business Consortium programme study from London Business School. On the sidelines of the IATA World Cargo Symposium in London last month, Reji John spoke to Kirsten de Bruijn, Executive Vice-President of Cargo at WestJet, in an exclusive interview for The STAT Trade Times. Edited excerpts.

What has been the brief to you when you joined WestJet as the head of cargo? It was very simple. We want to build our logistics arm within WestJet. It has been a passenger airline for the last 25 years. Canadian market has been much underserved with cargo capacity and we basically want to bring in a change. WestJet had already placed an order for four aircraft and they are going through certification right now. Our aim is to come up with a strategy for the coming years and a long term plan. But I've only started four months ago, so I'm still working on that.

It's been four months into your current role and how do you see your role taking shape? Good. I am getting to know the airline and also the Canadian market. It is not as straightforward as global air cargo with 99.9 per cent forwarding. Inter Canada doesn't need freight forwarders because it's obviously domestic. So we have a lot of direct shippers that we serve. So it's a different customer profile. So I'm really getting to know the customer segmentation of the Canadian markets and WestJet Cargo. I am reviewing the team and really investing in human capital. So I need a little bit more time, but we are getting there.

Can you briefly tell us the current cargo operational capabilities of WestJet? We have four freighters as of now. But we're quite a large airline; we have about 180 plus passenger planes. So it's not that we haven't been doing cargo. We have been doing cargo since the existence of WestJet but on the narrow body aircraft. We also have the B787-9s; so we do have wide body capability as well. We've started our journey with four 737-800BCFs (Boeing Converter Freighters), which we're hoping to start by next year after receiving the final aircraft certification. This is not yet a registered aircraft type in Canada.

WestJet has 4 737-800 Boeing Converter Freighters that are undergoing certification in Canada now.

Tell us about the overall cargo demand within Canada; a much underserved market as far as freight is concerned. It is a very large country and so serving that market you need aviation; you need air cargo. So really it is a matter of understanding the customer base. We do a lot of direct business with people who are shipping their goods or animals from A to B. We do work with freight forwarders, of course, for the international business mostly. We transport various products from pharma to general cargo to animals. We do a lot of animal transportation for the direct person like you and I. It is required and there is demand for more capacity. And still, we see supply chain challenges hitting us as a country because of the large land space. Then there is weather. Let's be fair, I mean, moving to the west of Calgary is going to be interesting when the winter comes. So in that regards, it's required. And we look forward to the future.

What can we expect from the recent partnership with GTA and how such a partnership will significantly benefit WestJet Cargo customers? GTA has a vast majority of companies that are all in the logistics space. So by partnering up with somebody that has the capability and knowledge from handling to freight forwarding really adds value to the value proposition of WestJet. We are also handled by them in our three big hubs. We recently announced the opening of GTA-dnata in Vancouver. We are opening the Calgary location in the first week of October and we are already handled by them in our Toronto hub. So by partnering with a company that has such vast experience really benefits the way we can offer the proposition to our customers

Do you have any specific focus areas in terms of a product or a commodity category? So I think intra-Canada there's obviously a lot of eCommerce but also a lot of perishable cargo. So those are two commodities that we see dominating the domestic transportation. And the good thing is what we don't specifically have because the wide body we have today is not really positioned intra-Canada is that we're moving from being a loose cargo carrier into our domestic Canada to pelletized commodities. We can then really add value in pharmaceuticals and pelletize perishables more than what we have been doing today. So that's really the new proposition that we have. As soon as we get our freighter certified we will have the freighter schedule, which is expected in the beginning of next year, we will be able to offer palletized cargo to our customers.

What is the long term vision of WestJet Cargo with a fleet of freighter? I am working on that. I started four months ago. So one of the assignments that I got and into the brief was what the long term vision is for WestJet Cargo. So next interview, you can ask me that, and I should have a little bit more clarity on that; a bit too early to tell now.

What will be some of your specific value-added services for your Canadian shippers once you have the freighter fleet operational by next year? So if you look into the eCommerce space in Canada, I think being able to offer the same day product with passenger capacity, obviously, depending on the load factor, that cargo might be bumped off because of payload or space. And if you really want to be in that domestic same-day market, because when people order stuff online, they want it now and not tomorrow. The freighter is going to give us that capability. It means very high on time performance. I think that is one of the first focus points that we will have to offer to our first and last mile partners.

You worked with very large airlines in the past; how do you now create excitement in your professional life as you build a start-up cargo airline step-by-step? The biggest difference is that it's small now; but it is like a start-up. So in all the bigger airlines that I've worked for, departments were in place, processes were in place and manuals were in place. WestJet needs to learn all of those things. So in the last four months I learned a lot because I don't have a department to go to. So you talk about network planning, scheduling and even operations in the proper manuals. It's like a blank slate. So it's like a start-up company; starting your own airline. So it's super exciting. And I find myself in discussions that I've never had to do before because everything was there already. So that is giving me the energy to go and start your own freighter operation. Like starting your own airline, which is great.

How do you keep yourself and your team prepared for uncertainties? I am generally a very positive person. So I don't think about the glass being half empty. And so giving the team the inspirational leadership that they want to come to work and actually make this happen because we need doers in WestJet. We are doing so many things and learning many new things and I think the road to success is very positive. People see that we, as a company, are investing in cargo. So the team that is currently there and the new members we are bringing in have a very positive feeling about the company. So that's already a very positive story. And obviously, I try to bring that message across to the team. They are also super excited that new team members are joining because they can learn from each other. So that's really like a breath of fresh air within our team.

I am an editor with STAT Media Group. Since November 2013 I have been writing stories on how goods move from A to B, B to C and A to all the way up to Z and everything in between across all modes of transport. Mail me at [email protected] if you have some interesting leads to stories – but only about cargo.

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Executive Summary executive summary is a brief introduction to your business plan. It describes your business, the problem that it solves, your target market, and financial highlights.">

Opportunity.

Economic growth and the requirements of redevelopment, not to mention the impending entry of several countries in the region to the European Union, are creating increased demand for air services between Western Europe and the countries of Southeast Europe and Turkey.

The market combines a variety of elements all of which demand a higher quality of air service than often currently available:

• Business travelers requiring convenience, reliability, speed, and schedules built around business needs.
• Government and international organization travelers, requiring the same elements.
• Personal and leisure travelers from the Southeast Europe/Turkey region who have the money to travel by air and who increasingly demand a higher level of service and convenience, but at an economical cost.
• The “Diaspora,” Personal and leisure travelers originally from the Southeast Europe/Turkey region, but now living and working in sizable numbers in the countries of Western Europe, with the same demands.
• Western European personal and leisure travelers, primarily traveling on the airline’s routes between Western European points.
• Seasonal (primarily summer, with some limited niche markets in the winter period) holiday travelers, primarily destined for Greece, Turkey, and the islands of the Mediterranean. Cost, reliability, convenience, and destination are their concerns.

The proposed new airline will appeal to all these distinct groups by offering better quality service (and in some cases, offering service where none now exists), at a higher level of safety, comfort, and convenience, and at reasonable fares, than currently available. The new airline also will focus on the niche markets identified in the Service Description section of this plan, enabling it to better serve and to become identified as the carrier of choice for those markets.

Competition

The overall airline industry operating between Western Europe and Southeastern Europe and Turkey consists of four primary segments:

• Established mainline European carriers (primarily Swiss International, Austrian, Lufthansa, Alitalia, Malev, Turkish) utilizing their Southeast European routes as spokes connecting to main hubs in Western Europe (or Budapest and Istanbul in the case of Malev and Turkish, respectively) and serving to feed traffic to their prime intra-European and trans-Atlantic routes (or domestic Turkish routes in the case of Turkish).
• Smaller, but generally well-established regional airlines primarily from Western Europe or the upper level of Eastern European states (primarily Swiss International, Tyrolean, and Adria) that perform essentially the same function as the mainline carriers or, in the case of carriers like Adria, link destinations in Southeast Europe to their own national capitals.
• Home-based Southeastern European carriers (such as ADA Air, Albanian Airlines, Avioimpex, Balkan Air, Hemus Air, JAT, and Tarom Airways) that often operate older, Soviet-built aircraft or turboprops, offer a generally lower level of service (though not always lower fares), and are often less highly regarded, including by travelers from Southeastern Europe. These airlines connect points within Southeast Europe, or they may connect Southeastern European destinations to major destinations in Western Europe.
• There also is a fourth segment worth noting, and that is the fairly significant charter market that exists within certain niche or seasonal markets. This market includes charter flights between Pristina and destinations in Switzerland and Germany, as well as primarily summer charters from Southeast Europe to New York and other destinations in North America. These charters are often operated by individual travel agencies or airlines, and often are categorized by a low level of service and utilization of older, often Soviet-built, aircraft. There also are the vacation charters that operate from Western Europe to Greece, Turkey, Cyprus, and the other holiday spots of Southeastern Europe and the Mediterranean.

It is anticipated that the proposed new airline would most closely fit into the second grouping above, but would compete effectively with all four main segments through a combination of a high level of safety and service, carefully selected routes, niche-market service, convenient schedules, reasonable and competitive fares, and modern, safe, comfortable aircraft. It also will offer service on under-served and unserved routes where little or no competition currently exists.

Air Leo will fill a niche in the growing air-travel and cargo markets linking Western Europe, and points beyond, to Southeastern Europe and Turkey; to achieve high, and profitable, load factors by identifying and serving key routes and city pairs currently unserved, under-served, or poorly served, and where significant unmet demand exists; and to set a new standard for air service and professionalism both within the target market region and beyond.

Expectations

Financial highlights by year, current alternatives.

The new airline’s main competitors will vary depending on market and route served, and the category of passenger. For the most part, competition can be expected as follows:

Business and Government/IO segments to and from Southeastern Europe

Austrian/Tyrolean

Swiss International

For SE European Regional and Diaspora Personal and Leisure Travelers

Balkan/Hemus

For Western European Personal and Leisure Travelers, as well as Business and Government/IO Travelers between Western European destinations

Air France/Air Inter

British Airways/CityFlyer 

Deutsche Air BA

TurkishJATKLM/KLM Cityhopper/KLM UK

For seasonal Holiday Travelers to Southeastern Europe and Turkey

British Airways

British Midlands

Hapag Lloyd

The larger, more established carriers often suffer from a lack of flexibility, and a focus on feeding their main intra-European and trans-Atlantic routes. The smaller regional carriers often are focused almost exclusively on their own core regional service. The Southeastern European airlines often suffer from poor service and poor reputations. And the larger, more established charter operators are focused on the holiday charter and package market.

Again, the extent of competition (and what is listed here is not comprehensive) dictates the importance of the new airline’s three-prong strategy to seek out unserved and under-served routes and city pairs, key niche markets where it can effectively compete or create its own market, and meeting peak travel demands on key regional, seasonal, and intermittent routes. It also points out the importance of standing out from the crowd through offering a higher level of service and convenience, and utilizing technology and a service-oriented staff to achieve recognition and passenger preference right from the outset.

Our advantages

In comparing the proposed new airline to its competitors, there are at least two levels of comparison that must be considered; the usually lower-standard airlines, both scheduled and charter, flying out of the Southeastern European region, and the higher-standard, more highly regarded airlines operating out of Western Europe.

Beating the former source of competition is both a reasonable and an essential goal. But comparing favorably, and even standing notably above, the latter also is an important objective since these airlines will represent direct competition to the new airline on many of its projected key routes, despite efforts to avoid such competition to the extent feasible.

Fortunately, several of the key distinguishing characteristics planned for the new carrier not only will enable it to fare extremely well in both levels of competitive comparison, but will actually be achievable at a savings in cost and resources. In other words, by being smart, the new airline can be significantly better than its competition while at the same time accruing lower overall costs, a remarkably good combination.

In comparing the proposed new carrier to both its Southeastern European and its Western European competition, it is important to look at those factors that determine how most travelers choose an airline. They include the following (and the order of importance is different for each traveler and each situation, but the most important factors are listed):

• Safety, actual and perceived;
• Cost, and range of fares offered;
• Destinations served;
• Availability of seats;
• Availability of fares;
• Convenience of flight schedules, times of arrivals and departures;
• Frequency of flights;
• Connections, including reliability and convenience of connections;
• Nature of flights: non-stop, direct, number of stops, aircraft changes;
• Availability of different classes of service;
• Onboard comfort, service, meals, and amenities;
• Type of aircraft, including jet or non-jet, size, and speed;
• Age and condition of aircraft;
• Ease and efficiency of reservations and ticketing;
• Reliability and on-time departures and arrivals;
• Ground service;
• Reliability and quality of baggage handling;
• Friendly, competent service in reservations, check-in, and in the air;
• Overall reputation of airline;
• Nationality of carrier;
• Factors of personal preference.

While no airline probably can excel in every one of these areas, the closer an airline comes to "excellent," or at least "good," ratings in each of these key areas, the better it will fare in its competitive standing.

Both in the overall design of the airline and its basic operational features, as well as in its management, quality control, and day-to-day operations, the proposed airline is expected to stand out positively in almost every regard.

Competition with Southeastern European carriers While not all Southeastern European carriers fit the stereotype presented here, and several are in the process of privatization and ostensible upgrading, most do operate at a lower level of service than is customary in Western Europe.

It is not uncommon for carriers in the region to operate older Soviet-built equipment (perceived to be less comfortable, less safe, and less reliable than its Western competition – perceptions that often are accurate).

For instance, such competing airlines as Avioimpex of the Former Yugoslav Republic of Macedonia, Albanian Airlines (Albania’s Kuwaiti-owned private carrier), ADA Air (a smaller private carrier in Albania with which BalkConsort has been partnered for certain purposes), Hemus Air and Bulgarian Airlines, both of Bulgaria, Tarom, Romania’s state carrier, and even Malev, the Hungarian airline, still operate Soviet-era aircraft in their fleets. In some cases, these aircraft are turbo-prop powered, and not pure jet.

While often it is relatively inexpensive to lease such aircraft, their operating costs tend to be significantly higher than newer, more fuel-efficient Western-built aircraft, and their safety, reliability, and noise factors are often poor, in some cases limiting their ability to operate in some markets.

Service levels are poor in general, among both scheduled and charter carriers, which represent a significant part of the market, particularly in service to Kosovo and Turkey, the two niche markets identified for the new carrier.

By utilizing modern, safe, reliable, and cost-effective Western-built regional jet aircraft, the proposed new airline will offer a far more attractive alternative to the traveler both from within and outside Southeast Europe, and will be able to operate with far lower fuel and maintenance costs than the competition.

The comfort, reliability, speed, and safety of the new airline’s aircraft all will enable it to be the airline of preference for virtually all business, government, and organizational travelers from both within and outside the target region when traveling to or within the region, and it also will be preferred by most leisure and personal travelers, including those from with the target region, as well.

Greater reliability and punctuality of the aircraft, augmented by state-of-the-art navigational devices that permit operation under a wider range of weather and visibility conditions, will enable the airline to compete most favorably on those bases also, and will ensure the least likelihood of flight cancellations, postponements, and missed or late connections.

On the basis of fares, the new airline will offer highly competitive fares which, in many cases, should be below those offered by its Southeastern European competition. Higher load factors, combined with greater efficiency both in operational costs as well as in reservations, ticketing, and check-in, will enable the new airline to be highly competitive from both a cost and a quality perspective, and will also enable it to retain a higher percentage of its revenues.

In short, the local competition, except in a few cases (such as Aegean/Cronus Airlines, and to a lesser extent Olympic Airways, from Greece; Adria from Slovenia; in some cases Malev, from Hungary; and the Turkish carriers) will not represent very strong competition to the new airline, and particularly in attracting the primary market groups at which the new carrier will be aimed.

Finally, the new carrier will be seeking out, as part of its business and marketing strategies, routes and city pairs that offer unserved or under-served demand. That strategy also will help reduce the threat from competition, and will enable the carrier to further establish itself as the carrier of choice in Southeast Europe.

Competition with Western European carriers The competitive picture is somewhat different when Western European carriers represent the competition. Many of the new airline’s competitive advantages relative to Southeastern European carriers are erased or at least minimized.

In most cases, the new airline will be competing with other carriers operating aircraft of a similar nature. Safety, comfort, convenience, and reliability, as well as in many cases cost, all are on a similar footing. To stand out from the crowd, the airline must do things either differently or better, or both, than its competitors, and it is here that both the design and the management of the new airline must be at their sharpest.

The competition in this region will include such well-established carriers as Swiss International, Austrian, Tyrolean, Lufthansa, KLM, British Airways, Air France, Alitalia, Sabena, and others of that nature. More recent, lower-cost, and "hipper" start-ups such as EasyJet, Go Fly, Bluebird, Virgin Express, and others like them will represent even more challenging competition in some cases.

But unlike any of its competitors, which may employ one or two or several elements of the proposed new airline’s marketing strategies, informational and electronic technologies, and management techniques, none of them – none – employ the full range of those elements that the proposed new airline will employ.

Consequently, the proposed new airline will be the real equivalent of a whole new generation of airline (regional or beyond), and will represent the kind of revolution in the aviation world that Pan Am, Icelandic, Laker Air, PEOPLExpress, Virgin Air Atlantic, EasyJet, and Air Blue represented in their day (and in some cases, their "day" is still today).

In that regard, the new airline might well be known as "TechnoAir" given its extensive deployment of state-of-the-art marketing, reservations, ticketing, check-in, baggage- and cargo-tracking, and operational and safety technologies.

The advantages of these technologies include a net cost saving to the airline, greater convenience and ease for the passenger, and an image and reputation that will cause the new airline to stand out from the pack. Combined with a staff and management that will be carefully recruited, selected, trained, and motivated to be the best of the best, and to be the most customer-oriented in the business, the new airline also will soon become known by its motto: "I’ve got a job to do, and I do it every day – for you!"

In other key areas – routes, schedules, and fares – the new airline also will be carefully designed to either compete highly effectively or, alternatively, to go where the competition is limited or non-existent.

Requirements for interline arrangements In order for the new airline to be able to obtain the interline arrangements such as code-shares, interline fare agreements, frequent-flyer mileage sharing, and so forth, that will be so important to its competitive posture and overall success, it must:

• Fly Western-built aircraft, preferably pure jet.
• Meet the standards to have a two-letter airline code.
• Meet the highest standards for safety, reliability, and service.
• Be accessible through normal reservations and ticketing systems.

Meeting these requirements, and negotiating the desired agreements, will be priorities from the outset in setting up the new airline. Additionally, partnering and interline arrangements will be carefully identified and sought that will offer the new airline strategic partnerships that will help give it the "cover" of larger, more established carriers, and also the status and service and growth potentials it will need to grow beyond its initial stage and to become a true presence in the aviation world.

Keys to Success

In descending order of importance, the five critical keys to success for the proposed new regional airline are:

• Employing an experienced, highly professional management team that combines vision; realism; financial ability; solid knowledge of the aviation business; familiarity with, and belief in, the utilization and benefits of the latest aviation, electronic, and informational technologies; on-the-ground knowledge of the region and markets to be served; realization of the crucial importance of an organization’s personnel to its success; and a total familiarity with, and commitment to, the overall mission and goals of the proposed new airline.
• Intelligent, progressive, and aggressive marketing that identifies the airline as a different kind of player , one that is sharper and smarter, and with a higher level of professionalism and operational standard than is the norm in the target region. Concentration on safety, with highly trained, dedicated, and professional personnel, caring for the passenger and the passenger’s needs and wants, the advantages offered by advanced technology, and straightforward, understandable, highly competitive tariffs and fare pricing, all will form key pillars of the marketing strategy.
• Identification, through careful market research, of unserved or under-served routes and city pairs  in the target market area with sufficient passenger demand to enable high load factors and profitable operations utilizing the category of aircraft envisaged.
• Use of an all-jet fleet of newer, modern, Western-built regional aircraft  that offer a high level of comfort, safety, and fuel and operational efficiency and flexibility, which meet all normal aviation standards, and which offer sufficient, but not excessive, passenger and cargo capacity on the envisaged routes.
• Use of advanced electronic and information technology  to reduce staffing and other operational costs; expand the potential market base; readily capture sales opportunities; simplify and speed passenger, baggage, and cargo handling; and enhance customer convenience and satisfaction.

Additional important, though less critical, keys to assuring the airline’s success include the following:

• Identifying, negotiating, and entering into, in the pre-operational stage and early on, beneficial associations, cooperations, and partnerships with larger, more established, highly regarded carriers  both within and beyond the target market region to offer interline arrangements, through fares, frequent-flyer mileage sharing, and convenient hubbing and long-distance onward connections to passengers. Successful execution of this element of the business plan is crucial to the overall success and growth of the airline, and must be kept in mind in the organizational plan and structuring of the airline.
• Establishing a high level of operational oversight and quality control  that will ensure that the airline always lives up to its marketing commitments and fulfills the promise of a high level of service, customer satisfaction, convenience, and safety, at a reasonable, highly competitive fare.
• Avoiding the temptation to go head-to-head with established carriers  on routes that already are well-served, unless solid evidence exists of additional, significant pent-up demand, or widespread customer dissatisfaction with existing services.
• Maintaining flexibility that enables the airline to always respond and adapt to changing market conditions and opportunities, without being erratic, and employing equipment, scheduling, and staffing on a basis that is sufficient to get the job done properly, efficiently, and at a high rate of return, without "overkill" or fielding costly excess capacity or, conversely, unduly cancelling scheduled flight operations.
• Identifying, developing, and quickly and cost-effectively exploiting opportunities  for new markets, new market concepts, and expanded sales potential.
• Supplementing regularly scheduled passenger service  with both regularly scheduled and also special cargo services when and where sufficient demand exists, and also with seasonal, peak-period, and other intermittent passenger services on certain key regional, seasonal, and variable routes where very high load factors can be predicted despite existing but lower-quality competition, or where competition cannot meet the demand. Larger, longer-range, or specialized aircraft may be employed on a charter or wet-lease basis to provide these supplemental, but potentially highly profitable, passenger and cargo services.
• Looking to combine the core aviation business with ancillary marketing concepts and activities  and ground-based operations that support, supplement, and complement the aviation elements of the business, including such activities as package-, group-, and charter-travel program offerings; value-added sales and customer services, both land- and Internet-based; construction and operation of enhanced passenger-, baggage-, and cargo-handling facilities and services; and other logical business pursuits both within and outside the immediate aviation business.
• Avoiding growth for growth’s sake , and instead looking for solid niche-enlargement opportunities that will allow incremental, but always profitable, expansion.

Marketing & Sales

Marketing plan.

The proposed new airline intends to cut out new territory as it goes about marketing itself. While it will clearly serve the target markets of Southeastern Europe and Turkey, it will just as clearly be a different kind of player on the field, and will seek to be known not only as a Western airline, but at the cutting edge of the aviation business in Europe.

The airline’s emphasis on the latest information and electronic technology, and its stress on comfort, convenience, safety and customer service, will be cornerstones on which the marketing strategy will be built.

The airline will utilize a combination of methods to achieve the recognition that it both desires and needs. A fairly large advertising budget is planned to buy the space and time to get its name and message in front of the largest possible group of potential customers that it can. Given the crowded field of European regional airlines, it is better to come on like a lion than a lamb, or you may be lost in the herd.

The airline will also utilize public relations to good advantage to extend and supplement its advertising budget.

There are a number of "hooks," aside simply from its newness, that the airline can utilize to get the media’s attention. The airline is opening up new markets, and it also is transcending the technological barrier with the latest technology in the business in Europe, or anywhere. It has big ambitions, but knows that it needs to serve the customer first to realize them. And it wants to know and serve its markets better than anyone else.

Everything about this airline, from its name to its colors, from the look of its planes to its airport kiosks, from its smart but informal crew uniforms to its advertisements and literature should set it apart. And it costs little more to do things freshly and smartly than the more ordinary way of doing things. An organization is new only once in its life, so the airline should grab that opportunity and get all the attention it can at the outset. And it needs to have both an adequate budget, as well as an outwardly directed management, to achieve that end.

The new airline will become known as one where all the staff practice the motto, "We have a job to do, and we do it every day – for you!""

The airline’s sales strategy will flow from its overall concept and marketing approach. Mass marketing, but with a personal touch utilizing airline employees as spokesmen and women to explain that "I have a job to do, and I do it everyday – for you!", will aim to steer as many people as possible either to the airline’s website, or to its telephone-based customer-service representatives. While clients are free to utilize their own travel agents, and the airline may also want to be accessible through general travel sites such as Travelocity, the more customers that can be encouraged to use the airline’s own reservations and ticketing services, the less revenue will have to be shared in the form of expensive commissions.

E-reservations and e-ticketing, combined with e-check-in, make the most sense for any customers who have online access, and also for the airline itself. But nonetheless, the airline must not lose sight of the fact that many people do not have access to the Internet, or do not care to use it to arrange their travel, or perhaps just prefer a more personal touch, and so other means of access must always be readily available.

The regional and specialized sales and marketing managers, as explained in the section on Personnel, will concentrate their effort on targeting specific clients that have the potential to offer corporate or group travel (including contract arrangements), or who are potential air-cargo customers. The airline will not have the resources to field a large sales team, and so these regional managers must target their efforts, and the airline must effectively utilize its mass marketing methods as well as the Internet to attract individual travelers who, once they experience the new airline, hopefully will feel a close affinity toward it and will become loyal and happy customers.

Locations & Facilities

Financial, traffic, and other studies currently are underway to determine the optimal prime basing location for the proposed new airline. Among the locations under study are the following eight:

• Luxembourg, Luxembourg;
• Berlin, Germany;
• London City Airport, London, United Kingdom;
• Stanstead Airport, London, United Kingdom;
• EuroAirport, Basel/Mulhouse, Switzerland/France;
• Amsterdam, The Netherlands;
• Cologne/Bonn, Germany;
• Munich, Germany.

In selecting a location to base the new airline, the following 11 major considerations are being evaluated, in roughly descending order of relative weight:

• The tax and business regime in place in the selected locale. A low profit tax rate and a regulatory and political climate supportive of business, and particularly foreign investment, are key considerations.
• The availability of relatively low-cost facilities suitable for basing both the business and aircraft-support operations, as well as the aircraft, is another key consideration.
• The availability of sufficient landing and parking slots and gate facilities to permit the desired level of service at the base airport.
• The ability to interconnect with one or more major carriers for onward interline arrangements both within Europe as well as to trans-Atlantic and global destinations.
• A location that, given the maximum range of the selected aircraft, will enable non-stop flights to the most important destinations within the new airline’s service area in Southeastern Europe and Turkey and, at most, one-stop service to more distant or secondary destinations.
• The existence of relatively high-traffic volume between the base location and one or more key interchange points to provide sufficiently high load factors between the base location and onward destinations and points of origin.
• The existence of a reasonably high level of cargo traffic, including opportunities for interline trans-shipment of both inbound and outbound cargo.
• The support of a larger airline with which the proposed new airline can establish a particularly close working relationship.
• The support of local airport and aviation authorities to facilitate establishment, certification, and ongoing operation of the airline and its aircraft.
• A location outside of the U.K. to facilitate British trade finance on acquisition of the new aircraft, should decisions be made to acquire British-built Avro aircraft as previously noted, as well as to purchase, rather than lease, the aircraft.
• A range of other factors, including the availability and cost of local skilled workers, the growth potential of the market selected, year-round climatic and weather conditions as they may affect flight operations, the "cache" of the locale for marketing purposes, the cost and convenience or difficulty involved in command and control of the airline involving key personnel, some of whom may be based at various other locations, and so forth.

It is anticipated that most routine maintenance will be performed at the base location, with some more minor maintenance and repairs relegated to other locations in the route network. In both cases, most of this routine maintenance and repair work will be contracted out to established and experienced service providers, reducing the need for the new airline to maintain its own extensive maintenance and repair teams and facilities.

The airline will, however, perform its own normal line maintenance at home base and will utilize locally available services away from home. Aircraft also may be based at key airline hub locations away from the home business base as well.

With acquisition of British-built aircraft, major overhauls and heavy maintenance may be performed at British Aerospace’s Woodford facility in the U.K. on a selective basis. In addition, it is anticipated that separate fixed-cost maintenance agreements will be entered into for both the airframes and the engines, or these elements will be included in any dry-leasing arrangements entered into.

Estimates for total labor and spare parts costs have been calculated as a fixed per-hour cost and included in the portion of this business plan dealing with anticipated operating costs.

Sufficient apron and hangar space for staging, parking, and storing, as needed on a short-term basis, up to the entire initial five-aircraft fleet will be required at the base location and any other hub locations selected.

As the fleet expands over time, additional parking and storage space will be needed either at the main base location or at regional hubs in the airline route network. Additionally, sufficient office space, preferably in one central location at or near the base airport, will be required to house the airline’s main administrative offices and its central reservations system.

While the airline may consider establishing its own sales offices in key market locations, in general sales will be handled through a combination of Internet marketing utilizing the airline’s own website as well as other Internet travel websites, designated general sales agents in given locales, and regular travel agencies everywhere.

Flight may be based on aerodynamics, but the proposed airline will be based on technology, and lots of it. Efficiency and convenience through use of the most up-to-date informational and electronic technologies, in addition to modern aviation and navigational technologies, are guiding principals of the proposed new airline. Technology will also be a cornerstone of the new airline’s marketing strategy.

Among the technological features  the  new airline will offer are:

• Internet marketing and online reservations (e-reservations) and sales (e-sales)  that will provide quick and easy access to airline schedules, flight availability, reservations, and ticketing to a wide range of customers worldwide. This eliminates payment of agency commissions and keeps costs low – savings that can be passed on to the customer.
• Electronic ticketing (e-ticketing)  which will enable passengers to obtain their tickets online and avoid the need to obtain paper tickets from airline offices, travel agencies, or at the airport. It also frees the airline from having to stock, track, and issue tickets and maintain paper trails of them. Again, more savings for both the airline and the customer.
• Electronic check-in (e-check-in)  that will virtually eliminate waiting in line to check-in for e-ticketed passengers, enabling them to confirm their identities, obtain their boarding passes, and check-in their baggage (and even purchase tickets upon check-in) utilizing a user-friendly kiosk that eliminates those last-minute frustrating waits to get to the counter. And it also greatly reduces the airline’s needs to staff check-in desks, control long lines, employ local contract ground staff, and expend money and resources on an antiquated system that only adds to the traveler’s inconvenience and frustration. Another win-win situation for both airline and passenger.
• Electronic baggage tracking (e-baggage tracking)  which will enable the airline to track any piece of baggage from check-in to final pick-up and claim. If courier services can track parcels as they move around the world, and enable customers to track their parcels using tracking numbers and online tracking systems, then why can’t the same system be used to assure that no passenger will ever again have to wonder where his or her baggage might be? There may still be contingencies (such as late check-in, lack of space, security restrictions, late connections, and so forth) that cause baggage not to be placed on a given aircraft, but at least both the airline and the customer can be assured that they both know exactly where the given item of baggage is at any moment, and when it might be expected to arrive at the destination. This could well be an exclusive feature of the proposed new airline since no other airline appears to be utilizing it at present.
• Electronic cargo tracking (e-cargo tracking)  is the same basic idea as e-baggage tracking, and will use the same basic system, only for tracking cargo and parcels.

It also will track all elements of a given passenger’s or customer’s transactions and interactions with the airline, from initial flight inquiry through reservations, ticketing, check-in, flight, connections, and final baggage pick-up, claim, and check-out, as well as any standing preferences, follow-up comments, inquiries, or problems. It also will monitor things like weather conditions, flight delays or projected delays, gate jam-ups, and other contingencies, and will automatically notify both appropriate airline personnel as well as passengers and customers of any advisories, warnings, or changes.  

• Electronic financial control  (e-finance) will enable complete electronic financial control and monitoring of the airline’s finances, clear advantages.
• Additional technological features will be incorporated on-board the aircraft  to provide flight crews with the latest navigational and communication technologies to assure the highest level of passenger safety and also airline reliability and punctuality. Included in this technology, in the case of the Avro aircraft, is all-digital ARINC 700 avionics with advanced Cat IIIb low weather-minimal landing capability to permit landings under the poorest permissible approach and visibility conditions

Equipment & Tools

Another issue still being evaluated and which will be decided is the question of how to acquire the aircraft. For a variety of reasons, including the ease with which the leases can be cancelled by the lessor and the lack of "ownership" of the aircraft, wet leasing has been ruled out except for short-term acquisition of aircraft that would be employed in meeting peak demand-type services as outlined elsewhere in this business plan.

The two remaining options both need to be examined from cost, flexibility, and finance points of view: Dry leasing the aircraft (generally on a five-year lease), or outright purchase. Both provide long-term control over the aircraft, and while both options tend to restrict changes in the fleet that might be preferred after the initial years of operation, market conditions and high demand for aircraft indicate that it would be relatively easy to be released from the leases, or to sell or lease the aircraft to new owners or operators, or to return them to their sources.

A number of leasing sources are available for the BAe Avro aircraft being considered, and some used aircraft also are available from time-to-time on the market from various sources. In addition, new aircraft can be acquired directly from the manufacturer on a variety of different plans and options, as well as used aircraft on occasion.

Cost factors employed assume dry leasing of new Avro RJ100 aircraft in 99-seat configurations, with a comparison for purchasing. It is anticipated that finance guarantees up to 85 percent of the acquisition cost of the aircraft could be obtained from the Export Credit Guarantee Department of the United Kingdom (ECGD) for purchasing British-built aircraft exported from the UK.

Ownership & Structure

Reflecting the overall nature of the organization envisaged, there is very little hierarchy in the organizational plan for the airline. In an operation where safety and accountability are so much at issue, obviously someone has to be in charge, and there also have to be clear lines of authority (and expertise) in the operational aspects of the airline. But beyond that, the organization is designed around flexibility, a high level of personal accountability and responsibility, and common cross-training and sharing of responsibilities as need arises and circumstances permit.

The levels of organization (reflected in the personnel and salary chart in the Personnel section of this plan) are as follows:

• President and chief executive officer (who reports to the Board of Directors of the airline company).
• Vice president and general manager.
• Functional vice presidents for the core areas of commercial activities, finance, and operations.
• Directors covering sales and marketing, communications, human resources, flight safety, flight operations, ground operations, maintenance, and information systems.
• Managers in sales and marketing, as well as in station management functions.
• Professional, engineering, ground handling, service, and other support personnel.

On the flight side, which reports to the director of flight operations and also responds to the director of flight safety, there are only three levels of personnel:

• First officer;
• Flight attendant.

Salary scales and levels of authority have been simplified and based on a rational scale allowing for similar levels, though of different natures, of functional work to be compensated at the same pay levels. The overall objective is to foster an atmosphere of cooperation and shared responsibility to the overall mission, which is to provide the customer and client with the best possible, safest, and most satisfying experience with the airline. Cross-training and cross-functioning are important parts of the organization plan, as explained in more detail elsewhere in this document.

Management team

A complete management team, covering the elements of administration, aviation, and finance, is being assembled. This team brings together a wide range of skills and backgrounds covering the key areas needed to form, launch, and operate the airline, and from a range of national origins.

6.3 Management Team Gaps

It is premature to speak of management team gaps until a core management team is named. The individuals who will play leading roles with the new airline will need to possess the widest possible range of the requisite skills. The current project team believes investors in the airline will want to play a key role in helping formulate core management. Once primary investment is established, that step can be undertaken, and it is anticipated that the core team will be finalized quickly.

The new airline will need people with skill, experience, energy, and vision to head up and serve in such areas as information management, flight safety, aviation operations, aviation maintenance, ground operations, sales and marketing, communications, and human resources management. Also good pilots, co-pilots, cabin crew members, and ground staff, and administrative staff.

BalkConsort anticipates putting together the best possible airline management team in the business, one that also shares the common vision of what this new airline truly can be and what it can become.

Financial Plan investor-ready personnel plan .">

Key assumptions.

In addition to the general financial and business assumptions presented in  the following table, the key parameters presented on the next page also were included as Operating Assumptions in formulating the financial portions of this business plan.

Every effort was made to be realistic in these Assumptions, and if anything they were formulated conservatively, particularly in calculating initial load factors and revenue yields which, in practice, should be considerably higher than offered here. Additionally, passenger and cargo fares were considered to be flat over the entire period covered by this plan to compensate for the possibility that additional competition could force fares to remain relatively constant over the period. However, the objective of this exercise was to show that the proposed operation will be profitable even with much lower revenues than would normally be expected, and the numbers do in fact confirm a profitable outcome.

Additionally, expected net revenues from offering peak-demand special flights also are calculated. They are set apart separately from the scheduled-service revenues to show that both types of service – and particularly the more important scheduled service – are viable and the airline will be profitable even without these additional revenues.

The assumptions utilized here are based on dry leasing new Avro RJ100s at a high level of outfitting and with necessary spares included. A separate set of figures is provided following the Operating Assumptions section which gives a cost comparison should the decision be made to purchase the aircraft new, utilizing ECGD export financing for 85 percent of the purchase price of the aircraft.

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

Start-up Expenses

Legal and consulting $200,000

Route and market study $100,000

Office supplies, stationery etc. $10,000

Brochures and marketing materials $30,000

Design consultants $60,000

Corporate insurance $20,000

Office rent $50,000

Software and systems development $100,000

Expensed equipment and off. furniture $150,000

Expensed vehicles (8) $100,000

Public relations and advertising $80,000

Crew, staff training and manuals $60,000

Other $30,000

TOTAL START-UP EXPENSES $990,000

Projected Profit and Loss

Projected balance sheet, projected cash flow statement.

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Simple Flying

How to start an airline: part 2 - developing a business plan.

It's time to plan your new airline - the operations, destinations, and fleet.

Welcome Aboard

So you have decided to start an airline. This is a big decision to take on a project that could quickly take over your life. But how do you actually go about it, and where do you begin? The process involved in starting an airline can be rewarding, enjoyable, and hopefully profitable too. But it can also be frustrating, fraught with challenges, and the next setback will always remain just around the next corner. But if you are determined to do this, let’s take a closer look at how you might go about achieving your goal.

The four key stages of planning

The first thing to do is develop a robust business plan for your airline . You should consider the four critical stages of planning, better known as what , where , how , and why . Your business plan could make all the difference between your airline becoming the next big deal or simply another casualty of the ruthless airline industry, itself littered with failures throughout its history.

Getting these first critical decisions right will improve your chances of succeeding and perhaps ensure your airline's survival chances in the future. Once you have rigorous and comprehensive answers to all four key stages, it will be time to draft your business plan.

Your airline business plan will act as the shop window for your airline that you will present to potential investors ; a document that can be peered throughout to see whether your offering is attractive enough to entice others inside and, hopefully, to part with their hard-earned dollars.

After all, unless you have bottomless pockets, you will be reliant on others to provide additional funding and investment to get your airline off the ground. We shall explore the whole issue of budget and finance in greater depth in the next part of this series.

The first stage of planning - What?

The first of the critical issues to address when you consider starting an airline is ' what '? What do you want to achieve exactly, bearing in mind that this may not be possible, cost-effective, safe, or even legal?

Focussing on developing your initial idea is all very well, but being flexible to change and ready for setbacks will be useful characteristics in your planning toolkit as you progress. You should develop an exact, detailed concept of what you want to do with your airline. What are your goals, and what do you need to achieve them.

What are your aims and ambitions? Do you want to start small and get bigger, or do you simply want to remain small and niche? Remember, many airlines survive because they stay small. Or are your aspirations to become a feeder carrier possibly, or a regional operator . Do you want to scale things up to become a short, medium, or even long-haul operator, flying the big jets to faraway destinations?

Is your airline going to be a scheduled carrier, a charter operator, or a combination of both? You might want to avoid the complications of fare-paying passengers altogether (often referred to in the airline world as ‘self-loading freight’) and specialize in the carriage of cargo only.

In principle, these are all feasible ventures, and the industry has successful examples in each sector. Honing on just one market segment initially and doing that well will be crucial before you even consider growing your business.

Once you have an established, well-developed concept of what you want your airline to be, you can progress to the next stage of the process.

The second stage of planning - Where?

Where you want to fly sits snugly alongside the ‘ what ’ question addressed above. You should be considering your proposed route structure , selecting your hub airports and your home base from the outset. You need to decide whether you wish to focus on being a point-to-point carrier or whether a hub-and-spoke operation might suit your airline better.

Remember that some airports you may wish to serve will be slot constrained, so a quick initiation into that airport's slot allocation process will be necessary. You may not be allocated a workable set of slots for your airline, so be prepared for some tough negotiating.

Recent startup airlines which appear to be making early progress with network planning are Breeze and Avelo in the US, selecting point-to-point routes to develop their business. PLAY in Iceland is aiming to build a viable hub-and-spoke network using Keflavik Airport (its home base) as its hub facility, offering decent levels of connectivity for passengers traveling over Iceland between the United States and Europe

Are you considering entering an existing market where you will compete with others, or will you target new, emerging markets, opening up regions and routes that would otherwise remain unserved by other carriers, such as Bonza , the excitable new startup in Australia?

Bearing in mind that you will require aircraft, crew, ground handling, maintenance provisions, and other services at each base you open dictates that you simply should not consider opening up a plethora of routes that are entirely unlinked to each other in any way.

Startup airlines regularly focus early operations on a single or minimal number of bases to start before they even consider expansion. An excellent current example of this is the new Flybe operation starting operations shortly. This new carrier (revived from the ashes of another carrier of the same name, which failed at the start of the pandemic) has limited its initial operation to just two small UK bases - Birmingham and Belfast City .

No doubt routes will be picked up and dropped from these bases in the early stages as Flybe refines its model. Yet, by staying small initially, the airline hopes to avoid having a dispersed network and fleet, which stretches resources and ultimately leads to operating a wide range of loss-making routes, just as its predecessor did.

While the 'what' question may have been based on intangibles, such as desire or ambition, the 'where' decisions will be primarily based on data and information.

Detailed route analysis using modeling and forecasting will be a prerequisite here. It will be imperative to have all your facts in numeric form so that forecasting and projections can be produced to act as your road map as you develop.

Route and network development consultancies can assist you in this process, as can the planning departments of airport authorities , as well as the leading commercial aircraft manufacturers.

Even a decision to fly a new 200-seat jet from point A to point B will find you with offers from all of these sources, each undoubtedly willing to provide planning assistance, particularly if there is something potentially in it for them. So don't be afraid to ask for help from those who know their industry best.

James Pearson , Simple Flying's very own in-house route and network planning expert, provides the following helpful advice for anyone considering a potential new airline's route structure -

Network planning requires solid research using multiple data sources, thinking creatively, and forecasting as accurately as possible. It also requires a strong gut instinct about what will work and why.

For low-cost and ultra-low-cost carriers especially, predicting market growth through stimulating demand is often essential. For many thin routes, this is crucial to make them viable, without which they would be too small.

Network planning isn't just a one-off process. It also requires continual market awareness to check what is happening to avail of more opportunities as they arise. No matter the work, not all routes will work or are expected to work. If they did, an airline wouldn't be experimenting enough.

The third stage of planning - How?

When considering the question of ' how' , there are various points to consider. Will you select just a single aircraft type for your operation, or does your plan call for several types? Without delving too deeply into economic theory relating to the principle of economies of scale, startup airlines have often seen success when focussing on a single type of aircraft - Southwest , Ryanair, or Wizz, all being good examples.

Selecting the correct aircraft type for your operation will be of utmost importance. Too small an aircraft, and you could be passing up the opportunity to fill more revenue-producing seats. Too large an airplane, you could risk flying around half-empty planes, burning fuel, and losing money, and lots of it.

Getting this balancing act is imperative to ensure your business plan's economics are correct. Your airline is financially viable so that your airline’s survival is assured, at least in the initial startup phase. Again, aircraft manufacturers' marketing departments will be all too eager to assist you in this process if there might be an aircraft sale or two for them!

The fourth stage of planning - Why?

Starting an airline is not easy; otherwise, everyone would be doing it, right? Going into the startup process thinking your airline will be flying before you know it would be foolhardy and misguided. You should give a great deal of consideration to why you wish to do this.

Why do you want to put yourself through months, if not years, of stress just to get to your airline's inaugural flight, let alone what may come afterward? Starting an airline simply as a vanity project has been repeatedly shown to be not enough reason to build a sustainable business.

You will need a good degree of passion, enthusiasm, resilience, and ambition to make this all come together. Starting an airline for fun is not a ‘thing’ in itself. You may have good intentions, grand designs, and enormous ambitions for your airline. Still, without established motives and deeply embedded aspirations, you may as well stop planning before you even get started.

And to address the 'elephant in the room' when it comes to airline startups, don’t expect to run a profitable business for several years at the very least . The startup costs involved in getting a new startup airline flying are far more considerable than even your forecasts will tell you. You need to make provision for this, given the multitude of setbacks that will undoubtedly come your way throughout the startup process.

As mentioned earlier in this article, If you are starting an airline simply to get rich quickly, you seriously need to rethink your whole ethos.

Failing to plan is planning to fail

Without comprehensive and credible plans in place, you are setting yourself up for a rapid fall. Any cracks in your business plan will quickly widen, be stretched to critical levels, and may simply just bring your whole project crumbling down before you even get going.

Yet, knowing what you want to do, where you intend to do it, how you intend to achieve it, and perhaps most importantly, why you are setting off on this arduous process and profoundly personal and life-changing journey will either attract investors to you or conversely confine your airline plans firmly to the drawing board.

Head in the air but feet on the ground

So, in summing up, be very clear about what you are aiming to achieve. Have big ideas and even bigger goals, but wherever your airline planning takes you, keeping your feet firmly on the ground will serve you well. Because remaining grounded throughout the planning process at all times, will hopefully ensure that your airline startup does not!

Next time, we shall look at airline funding and financing. Join us for 'How to Start An Airline: Part 3 - Finances', coming soon.

Air Cargo Marketing Plans and Air Cargo Development

More often, recognizing the importance of air cargo, airports are dedicating financial and professional resources to enhancing air cargo. It is important for an airport to develop a marketing plan when pursuing new or improved air cargo service. The ACI-NA Air Cargo Guide, Chapter 2, Developing an Air Cargo Market details the aspects of an air cargo marketing plan. The guide reminds the reader that marketing goes hand in hand with facility development since neither can be done successfully without the other. Both programs need a single focus in order to be successful.

A few of the items needed for a marketing plan and air cargo development as highlighted in the guide include:

• Market Assessment

An assessment of the regional market area in conjunction with an assessment of an airport’s strengths and weaknesses will be the backbone of the marketing plan. Identify the potential cargo market and the advantages of the airport and region as a location to do business. The items included in a market assessment are discussed in detail under the Explore Air Cargo section. More information regarding SWOT Analyses can be found on the Air Service Explore Page .

• Clear, Specific, and Realistic Objectives

Once the market assessment is completed, the airport can set objectives to overcome deficiencies or weaknesses or capitalize on strengths or unique features.

• Strategies to Achieve Objectives

Each strategy should promote an airport and region’s strengths and should be targeted on two primary customers- air carriers (all-cargo and passenger) and air freight forwarders.

• Input from Other Stakeholders

The marketing plan should include participation and input from other organizations such as trucking companies, local air cargo associations, agencies such as Customs and Agriculture, state aviation agencies, and local economic development agencies and chambers of commerce. This input helps foster support for the air cargo development efforts as well as the airport overall.

• Air Cargo Development

Pursuing new or improved air cargo service requires a thorough understanding of the customer and their needs. A vision of the opportunities available at the airport for a potential new carrier should be communicated and well-designed and cost-effective facilities should be developed to support customer needs. A report can be developed and presented to a carrier to highlight the airport’s benefits. Additional programs can be pursued to raise awareness of an airport’s cargo facilities and competitive advantage. These include:

• Cooperative promotion programs
• Informational programs
• Advertising and cargo expositions

Chapter 4, Air Cargo Facility Analysis , Figures 1 and 2. Figure 1 outlines the marketing aspects of air cargo facility development while Figure 2 depicts the facility development process.

An example of a strategic plan for air cargo development at the Erie International Airport.

An example of a marketing plan that includes air cargo development.

This checklist describes information provided in typical sections of an Air Cargo marketing plan.

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Airline Business Plan Sample

FEB.01, 2021

Do you want to start an airline company?

An airline business provides air transport to passengers on a national and international level. The business is undoubtedly much more profitable than other usual businesses. However, it comes at the cost of a difficult startup.

Starting an airline business is an inevitably expensive venture. The costs of jets, the salaries of qualified and experienced pilots, salaries of the crew, charges paid to the airport, payments to government and travel agents combined make a huge cost.

Therefore, if you are exploring how to build an airline business plan, you must first make sure that you will be able to manage a large team and expenses. To start this business, the first step would be creating a business plan. In this blog, we’re providing a business plan for airlines written for the startup, Bruce Airlines.

Executive Summary

2.1 the business.

Bruce Airlines will be a registered and licensed aviation business startup headquartered in Charlotte. The business will be owned by Bruce Greg, former COO of Aer Lingus.

2.2 Management of Airline company

Managing an airline company demands a lot of experience and expertise. Because the slightest mistake of anyone can lead to huge money and even life losses. In this airline business plan executive summary pdf we’ll be providing all details about Bruce Airlines. So you would have complete knowledge of what to include in your starting up airline business plan.

To manage an airline company, you’ll be needed to employ aviation attorneys, schedule coordinators, aviation technicians, flight attendants, pilots, and administrative staff.

To ensure the smooth running of business’ operations, Bruce Airlines will offer just 45 destinations across the globe in the initial phase.

2.3 Customers of Airline company

The customers of our airline will mainly be businesspersons and officers who need to travel internationally. Moreover, the general public and tourists will also be our target customers.

2.4 Business Target

Our target is to cover the startup expenses within two years of the launch. Moreover, we also aim at earning a net profit margin of $27k per month by the end of the second year and $49k per month by the end of the third year.

Company Summary

3.1 company owner.

Bruce Greg completed his pilot training at American Airlines Cadet Academy at the age of 21. After that, he did an MBA from Harvard University and joined Aer Lingus as a company manager. He served at several managerial posts and eventually became the company’s, Chief Operating Officer. He served as COO for six years and then decided to launch his own airline.

3.2 Why the airline company is being started

Bruce has always been associated with the airline business. He decided to launch his own airline to be an entrepreneur and earn the most by utilizing his skills and experience.

3.3 How the airline company will be started

Step1: Creating A Business Plan

The first step before starting an airline company is to create a business plan for airlines company. Bruce studied several examples of business plans for airlines and developed his start an airline business plan himself. We are providing the business plan he created in this sample business plan airline company.

Step2: Acquiring Required Licenses & Permits

Step3: Establish Headquarter, Values & Services

Bruce Airlines will be headquartered in Charlotte. The company will come into contact with airports and the government to negotiate the fee for hangars and for scheduling flights and routes. Meanwhile, the company will define its services, values, and customer care policies to get recognized.

Step4: Hire The Staff

To run an airline company, you need to hire a large staff. Due to the responsible and delicate nature of work, Bruce decided to recruit staff after rigorous testing and interviewing. The list of staff he’ll hire will be given in the upcoming sections along with their job descriptions and salaries.

Step5: Promote & Market

To attract customers amid huge competition, it is essential to develop an effective marketing strategy. And to come in contact with stakeholders who can indirectly promote your company.

Step6: Establish Online Presence

In this era, it is really important to establish a strong website presence. Bruce decided to launch a website that provides electronic ticketing and flight booking system to facilitate his customers.

Like all other airlines, Bruce Airlines will also be offering four travel classes. The services and luxuries associated with each class are listed here. If you want to build your own airline you can take help from this business plan template airlines.

• Economy Travel Class: This will be our basic class consisting of normal quality seats, foods, and extras for those looking for economical travel. The leg space, seat width, and screen size will be a lot lesser than all other classes. However, it will be adequate for a short flight.
• Wider and Comfortable Seats
• Quality foods and refreshments
• 16-inch entertainment screen
• Extra things including hot towels, toothbrushes, headsets, etc.
• Extra Comfortable Seats (More width, inclination)
• High-quality foods and refreshments
• 20-inch entertaining screen
• Extra things including eye masks, headsets, towels, and others.
• High priority check-in security
• High priority baggage handling
• Mini-Suites with privacy doors and noise-dampening curtains
• Storage compartments
• 26-inch entertainment screen
• Personal wardrobe
• Comfortable seat that reclines into super-comfy bedding with temperature control
• Finest foods and drinks made by world-renowned chefs
• Amenity kit including toothbrushes, face creams, lip balms, ear-plugs, and other things.

Marketing Analysis of Airline Company

Marketing analysis is a very important part of airlines business plan template. It analyzes the target market and target customers. Moreover, it also explains how much price you should set to meet your financial goals while attracting more customers than your competitors.

In this starting an airline business plan we are providing the marketing analysis done for Bruce Airlines. Here we have analyzed the global market trends for this business and the general groups of people that can be considered as potential customers.

If you are looking for how to write a business plan for an airline you can take help from airline business models pdf.

5.1 Market Trends

According to IBISWorld, more than 22k global airline businesses are running in the United States, employing more than 2.5 million masses. According to the same source, the business holds a huge market size of $686 billion.

Despite that the industry is already quite large, still, It is expected to grow more in the coming years. The growth is forecasted based on the surge in travel activities and expansion in the middle-class population in the coming years.

5.2 Marketing Segmentation

5.2.1 Business Persons

This group of our customers comprises of businessmen and women who need to travel to several countries as part of their business. This group is expected to avail of our first class and business class travel tickets. As this category usually arrange business trips and meetings, therefore, we expect this group to avail our services in groups.

5.2.2 Foreign Officers

Our second target group comprises high officials who need to travel on regular basis to meet their job responsibilities. This group is also expected to avail of our first class and business class travel tickets.

5.2.3 Tourists

Our third target group will comprise tourists who board airplanes frequently to reach out to remote locations. This category is expected to travel mostly in economy and premium economy class.

5.2.4 General Public

Lastly, general people who have to travel far-off places on an urgent basis will also be our target customers. This group is expected to avail mostly our economy class service.

5.3 Business Target

• To earn a profit margin of $49k per month by the end of the third year
• To achieve an average rating above 4.77 by the end of the second year
• To achieve a CSAT score above 92 by the end of the first six months
• To increase our travel destinations from 45 to 55 within three years of our launch

5.4 Product Pricing

Our prices will lie within the same ranges as that of our competitors. However, we will offer several discounts in the startup phase.

Marketing Strategy

Bruce Airlines will come up with several competitive aspects to get ahead of its competitors. In this airline marketing strategy pdf we’re providing the marketing strategy of Bruce Airlines. So that you can have help in making your own airline marketing business plan.

6.1 Competitive Analysis

We expect to get popularity among our customers due to the following competitive aspects.

• Electronic booking and ticketing facility
• Additional amenities
• Discounted rates in the first two months
• Dedicated flight attendants
• Highly customer care oriented policies

6.2 Sales Strategy

To advertise our startup, we’ll

• Promote our services through travel agent companies , social media campaigns, and Google Local ads services.
• Offer a 30% discount on the economy, premium economy, and business class tickets for the first two months of our launch.
• By launching our frequent-flyer program for privileged and loyal customers.
• By making our website SEO and by investing in artificially intelligent chatbots.

6.3 Sales Monthly

6.4 Sales Yearly

6.5 Sales Forecast

Personnel plan

An airline company needs a lot of staff to manage operations. Therefore you should make a detailed list of required employees with their job descriptions as you write a business plan for an airline.

7.1 Company Staff

Bruce will be the CEO himself. The staff he’ll hire is listed below:

• 1 Chief Operating Officer
• 5 Pilots with ATP certifications
• 9 Flight Attendants
• 2 Airline Operations Agents
• 3 Avionics Technicians
• 3 Airline Station Agents
• 1 Aviation Attorney
• 2 Sales Executives
• 1 Social Media Manager
• 6 Security Officers
• General Cabin Crew

7.2 Average Salary of Employees

Financial plan.

The airline company is not like other usual businesses. Starting and running an airline business is extremely expensive due to the high costs involved in

• Purchasing Airplanes
• Recruiting highly qualified pilots
• The fee paid to the government and airports
• The fee paid to travel agents
• Frequent loss due to empty seats
• Salaries of a large workforce
• Maintenance costs
• Money spent on marketing and advertisement

Therefore due to the high costs involved in airline operations, you need to be very much careful in managing your finances. Your financial plan for this business must draw a trajectory to earn targeted profits despite these huge expenses.

As Bruce had all the knowledge to create a financial plan, he carried out this task himself. In the case of your startup, if you are not a professional financial analyst, you must hire the services of one. To get a rough idea of what to expect from your professional financial plan writer , we are providing the financial plan of Bruce Airlines in this starting airline company business plan.

8.1 Important Assumptions

8.2 break-even analysis.

8.3 Projected Profit and Loss

8.3.1 profit monthly.

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5 Projected Balance Sheet

8.6 business ratios.

All tables in PDF Download Airline Business Plan Sample in pdf Professional OGS capital writers specialized also in themes such as drop shipping business plan , import and export business plan , logistics business plan , airmall business plan and helicopter business plan .

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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Business | UPS to be primary air cargo provider for US…

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Business | UPS to be primary air cargo provider for US Postal Service

USPS’s current air cargo contract with FedEx Corp. is set to expire in late September.

By Michelle Chapman | The Associated Press

UPS will become the primary air cargo provider for the United States Postal Service.

The Atlanta shipping company said Monday that it had received an air cargo contract from the U.S. Postal Service that significantly expands an existing partnership between the two.

UPS will move the majority of air cargo in the U.S. for the postal service following a transition period, according to UPS.

Financial terms of the deal were not disclosed.

FedEx said in a regulatory filing that it wasn’t able to reach an agreement on mutually beneficial terms to extend its contract with USPS. The company said that negotiations ended on Friday, after extensive talks.

FedEx Express will continue to provide air transportation services domestically and to Puerto Rico until the contract expires on Sept. 29.

During FedEx’s third-quarter conference call on March 21, Chief Customer Officer Brie Carere said that the company had provided its services to USPS for more than two decades and that the two sides were still in negotiations.

USPS announced a four year extension of its air cargo network contract with FedEx in 2020. The mail and delivery service said that the contract provided for domestic air transportation for U.S. Mail, Priority Mail and Priority Mail Express.

In recent years USPS has focused increasingly on lowering costs, and avenue is through transitioning from air freight to ground transportation. In February USPS Postmaster General Louis DeJoy said that USPS is looking to reduce its overall transportation costs by $3 billion over the next two years, which includes $1 billion cost savings already achieved in airfreight.

While USPS is looking to move more to ground shipments as a cost-saving tactic, air cargo shipments have been rising globally. Last month the International Air Transport Association said that total demand for air cargo, which is measured in cargo ton-kilometers, climbed 18.4% in January compared with the prior-year period. That’s the highest annual growth in the figure since the summer of 2021.

Shares of United Parcel Service Inc. rose nearly 2% before the opening bell Monday, while FedEx’s stock fell 2.1%

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UPS to become the primary air cargo provider for the United States Postal Service

FILE - A delivery vehicle passes by a UPS depot, Thursday, June 29, 2023, in New York. UPS has received an air cargo contract from the United States Postal Service, significantly expanding on an existing partnership between the two. UPS said Monday, April 1, 2024, that it will become USPS’s primary air cargo provider and move the majority of its air cargo in the U.S. following a transition period.(AP Photo/John Minchillo, File)

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UPS will become the primary air cargo provider for the United States Postal Service.

The Atlanta shipping company said Monday that it had received an air cargo contract from the U.S. Postal Service that significantly expands an existing partnership between the two.

UPS will move the majority of air cargo in the U.S. for the postal service following a transition period, according to UPS.

Financial terms of the deal were not disclosed.

USPS’s current air cargo contract with FedEx Corp. is set to expire in late September. The agency said in a statement that its contract with UPS will be for a minimum of five and a half years.

FedEx said in a regulatory filing that it wasn’t able to reach an agreement on mutually beneficial terms to extend its contract with USPS. The company said that negotiations ended on Friday, after extensive talks.

FedEx Express will continue to provide air transportation services domestically and to Puerto Rico until the contract expires on Sept. 29. UPS’s contract with USPS takes effect the next day.

During FedEx’s third-quarter conference call on March 21, Chief Customer Officer Brie Carere said that the company had provided its services to USPS for more than two decades and that the two sides were still in negotiations.

USPS announced a four year extension of its air cargo network contract with FedEx in 2020. The mail and delivery service said that the contract provided for domestic air transportation for U.S. Mail, Priority Mail and Priority Mail Express.

In recent years USPS has focused increasingly on lowering costs, and avenue is through transitioning from air freight to ground transportation. In February USPS Postmaster General Louis DeJoy said that USPS is looking to reduce its overall transportation costs by $3 billion over the next two years, which includes $1 billion cost savings already achieved in airfreight.

While USPS is looking to move more to ground shipments as a cost-saving tactic, air cargo shipments have been rising globally. Last month the International Air Transport Association said that total demand for air cargo, which is measured in cargo ton-kilometers, climbed 18.4% in January compared with the prior-year period. That’s the highest annual growth in the figure since the summer of 2021.

Shares of United Parcel Service Inc. dipped slightly in Monday afternoon trading, while FedEx’s stock declined nearly 3%.

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United states, financial releases, ups announces significant partnership expansion with usps.

Primary Air Cargo Provider Status Awarded to UPS

ATLANTA--(BUSINESS WIRE)-- UPS (NYSE: UPS) today announced the company has been awarded a significant air cargo contract by the United Stated Postal Service (USPS). This award is effective immediately and greatly expands the existing relationship between the two organizations. Following a transition period, UPS will become the USPS’s primary air cargo provider and move the majority of USPS air cargo in the US.

“Together UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable and efficient integrated network,” said UPS Chief Executive Officer Carol B. Tome.

UPS (NYSE: UPS) is one of the world’s largest companies, with 2023 revenue of $91.0 billion, and provides a broad range of integrated logistics solutions for customers in more than 200 countries and territories. Focused on its purpose statement, “Moving our world forward by delivering what matters,” the company’s approximately 500,000 employees embrace a strategy that is simply stated and powerfully executed: Customer First. People Led. Innovation Driven. UPS is committed to reducing its impact on the environment and supporting the communities we serve around the world. UPS also takes an unwavering stance in support of diversity, equity and inclusion. More information can be found at https://www.ups.com , about.ups.com and https://investors.ups.com .

View source version on businesswire.com: https://www.businesswire.com/news/home/20240401977055/en/

UPS Media Relations 404-828-7123 [email protected]

Source: UPS

Released April 1, 2024

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‘A Lot of Chaos’: Bridge Collapse Creates Upheaval at Largest U.S. Port for Car Trade

A bridge collapse closed Baltimore’s port, an important trade hub that ranks first in the nation by the volume of automobiles and light trucks it handles.

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Shipping in the Port of Baltimore

Monthly cargo handled by the Port of Baltimore

By Peter Eavis and Jenny Gross

• March 26, 2024

The Baltimore bridge disaster on Tuesday upended operations at one of the nation’s busiest ports, with disruptions likely to be felt for weeks by companies shipping goods in and out of the country — and possibly by consumers as well.

The upheaval will be especially notable for auto makers and coal producers for whom Baltimore has become one of the most vital shipping destinations in the United States.

As officials began to investigate why a nearly 1,000-foot cargo ship ran into the Francis Scott Key Bridge in the middle of the night, companies that transport goods to suppliers and stores scrambled to get trucks to the other East Coast ports receiving goods diverted from Baltimore. Ships sat idle elsewhere, unsure where and when to dock.

“It’s going to cause a lot of chaos,” said Paul Brashier, vice president for drayage and intermodal at ITS Logistics.

The closure of the Port of Baltimore is the latest hit to global supply chains, which have been strained by monthslong crises at the Panama Canal, which has had to slash traffic because of low water levels; and the Suez Canal, which shipping companies are avoiding because of attacks by the Houthis on vessels in the Red Sea.

The auto industry now faces new supply headaches.

Last year, 570,000 vehicles were imported through Baltimore, according to Sina Golara, an assistant professor of supply chain management at Georgia State University. “That’s a huge amount,” he said, equivalent to nearly a quarter of the current inventory of new cars in the United States.

The Baltimore port handled a record amount of foreign cargo last year, and it was the 17th biggest port in the nation overall in 2021, ranked by total tons, according to Bureau of Transportation Statistics.

Baltimore Ranks in the Top 20 U.S. Ports

Total trade in 2021 in millions of tons

Baltimore ranks first in the United States for the volume of automobiles and light trucks it handles, and for vessels that carry wheeled cargo, including farm and construction machinery, according to a statement by Gov. Wes Moore of Maryland last month.

The incident is another stark reminder of the vulnerability of the supply chains that transport consumer products and commodities around the world.

The extent of the disruption depends on how long it takes to reopen shipping channels into the port of Baltimore. Experts estimate it could take several weeks.

Baltimore is not a leading port for container ships, and other ports can likely absorb traffic that was headed to Baltimore, industry officials said.

Stephen Edwards, the chief executive of the Port of Virginia, said it was expecting a vessel on Tuesday that was previously bound for Baltimore, and that others would soon follow. “Between New York and Virginia, we have sufficient capacity to handle all this cargo,” Mr. Edwards said, referring to container ships.

“Shipping companies are very agile,” said Jean-Paul Rodrigue, a professor in the department of maritime business administration at Texas A&M University-Galveston. “In two to three days, it will be rerouted.”

But other types of cargo could remain snarled.

Alexis Ellender, a global analyst at Kpler, a commodities analytics firm, said he expected the port closure to cause significant disruption of U.S. exports of coal. Last year, about 23 million metric tons of coal exports were shipped from the port of Baltimore, about a quarter of all seaborne U.S. coal shipments. About 12 vessel had been expected to leave the port of Baltimore in the next week or so carrying coal, according to Kpler.

He noted that it would not make a huge dent on the global market, but he added that “the impact is significant for the U.S. in terms of loss of export capacity.”

“You may see coal cargoes coming from the mines being rerouted to other ports instead,” he said, with a port in Norfolk, Va., the most likely.

If auto imports are reduced by Baltimore’s closure, inventories could run low, particularly for models that are in high demand.

“We are initiating discussions with our various transportation providers on contingency plans to ensure an uninterrupted flow of vehicles to our customers and will continue to carefully monitor this situation,” Stellantis, which owns Chrysler, Dodge, Jeep and Ram, said in a statement.

Other ports have the capacity to import cars, but there may not be enough car transporters at those ports to handle the new traffic.

“You have to make sure the capacity exists all the way in the supply chain — all the way to the dealership,” said Mr. Golara, the Georgia State professor.

A looming battle is insurance payouts, once legal liability is determined. The size of the payout from the insurer is likely to be significant and will depend on factors including the value of the bridge, the scale of loss of life compensation owed to families of people who died, the damage to the vessel and disruption to the port.

The ship’s insurer, Britannia P&I Club, part of a global group of insurers, said in a statement that it was “working closely with the ship manager and relevant authorities to establish the facts and to help ensure that this situation is dealt with quickly and professionally.”

The port has also increasingly catered to large container ships like the Dali, the 948-foot-long cargo vessel carrying goods for the shipping giant Maersk that hit a pillar of the bridge around 1:30 a.m. on Tuesday. The Dali had spent two days in Baltimore’s port before setting off toward the 1.6-mile Francis Scott Key Bridge.

State-owned terminals, managed by the Maryland Port Administration, and privately owned terminals in Baltimore transported a record 52.3 million tons of foreign cargo in 2023, worth $80 billion.

Materials transported in large volumes through the city’s port include coal, coffee and sugar. It was the ninth-busiest port in the nation last year for receiving foreign cargo, in terms of volume and value.

The bridge’s collapse will also disrupt cruises traveling in and out of Baltimore. Norwegian Cruise Line last year began a new fall and winter schedule calling at the Port of Baltimore.

An earlier version of this article misstated the Port of Baltimore’s rank among U.S. ports. It was the nation’s 17th biggest port by total tons in 2021, not the 20th largest.

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Peter Eavis reports on business, financial markets, the economy and companies across different sectors. More about Peter Eavis

Jenny Gross is a reporter for The Times in London covering breaking news and other topics. More about Jenny Gross