Clearway Airlines

SAMPLE. DO NOT USE THESE REFERENCES/SOURCES

INTRODUCTION

Creating a space for a brand new airline company in an already competitive industry can be a

difficult, almost intriguing challenge to assume. The approach most suitable for a firm with

virtually no reputation would be to begin as a private airline company. Company congestion,

heavy start-up costs, and even a shortage in pilots are not all, but a few issues that can present

itself, thus, dodging the commercial route in the beginning stages of a firm will help to reduce

risk. Veteran airline companies can easily overshadow a start-up; nearly all travelers have a

preference in what brand one chooses to fly with. Deep pockets are pretty much required, in fact,

the purchasing of an aircraft alone can intimidate an entrepreneur interested in this challenge.

While a pilot might dream to command an aircraft for American Airlines or other expert rivals,

the private approach will attract rookie pilots looking to gather flight hours before the next step is

taken. With a well-organized strategy, the vision of opening an airline company can become a

little less daunting, and much more feasible.

LEVELING THE PLAYING FIELD

Discarding the fact that commercial competition would incur too much risk is a reality even

the layman is aware of. In starting private, the start-up company can create a culture of

connecting with its consumers, and would help to develop customer loyalty. A few groups the

firm can begin with are businessmen; now more than ever elites would prefer to fly privately

than to risk exposure to coronavirus by cramming with others in a commercial flight.

Partnerships with nation-wide competitions like cheerleading nationals can be created to offer

discounted rates to teams flying from state to state. Pilots for a private company can even find

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themselves flying equipment as opposed to personnel, for instance, cargo services can be

contracted by businesses for transportation purposes. Finding groups with an interest in flying

privately can be seen as the cake-walk, there are so many musicians, sport teams, and companies

in the business of flying privately, the main objective would be establishing and reinforcing the

relationship with parties of interest.

RESHAPING COST STRUCTURE

Using a SWOT analysis, one of the greatest weaknesses that can present itself is the heavy costs

incurred in a start-up airline company. Statista, an analytics website, states, “The Boeing

737-700, listed at an average price of $90M USD, is among the least expensive models…”

(Burgueño-Salas, 2021), though the first aircraft would more than likely be the size of the

average private jet, these lump sum amounts can be used to demonstrate the price range an

aircraft is typically in. Negotiating wholesale prices with gasoline companies can help to acquire

fuel at lower rates, short-term contracts can be made so they can be revisited in 3-4 years, as the

airline brand gains momentum. Robin Hayes, CEO of JetBlue, states in JetBlue’s 2020 Annual

Report under Reshaping Cost Structure how, “…selling warehouse/real estate property…”

(Hayes, 2021) was a defensive strategy used for fixed cost reductions. Renting aircraft services

to other fellow private companies will help to generate additional revenue when the business is

low and the aircraft is not in use. Large investments are indeed mandatory for initiation,

however, finding ways to reduce expenses and stimulating revenue will help in alleviating

impossible break-even numbers.

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ATTRACTING THE TALENT

While society creeps closer than ever to a world of autonomous vehicles, the introduction to

this in an aircraft will still require time and trust in an AI computer. Fortunately, the U.S.

Bureau of Labor Statistics has reported a large number in pilot employment size, and is, “…

projected to grow 13 percent from 2020 to 2030…” (U.S. BLS, 2021). This report was done on

commercial pilots, which suggests there should currently be a large pool of candidates seeking

additional flight hours to supplement their resume ere approaching a commercial airline

company. Partnerships can be made with flight schools to better approach these applicants,

allowing the start-up company to “put a face to the name”. U.S. military soldiers with flight

hours accrued can also be contracted, more so for the women and men seeking employment in

the civilian workforce. While a private flying pilot has a much smaller salary than that of a

commercial pilot, this start-up airline can act as the mediator between these candidates, bridging

and preparing them for a successful journey ahead.

CONCLUSION

Envisioning a business must come with real-world strategies and an in-depth internal/ external

analysis of the environment. Ideally, the greatest advantage lies in opening the airline company

as private, as opposed to commercial. Among the several start-up obstacles one must face,

resolutions to a fully saturated industry, overwhelming expenses, and talent recruitment must be

found sooner than later. Unless investor-backed decisions lead to opening commercially, the

wisest strategy would be to build a brand image first by catering to a specific market. Fixed

costs reductions and seeking ways to constantly occupy the aircraft are solutions that both

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decrease expenses and increases revenue. Recruiting pilots with a less decorated resume benefits

not only the firm, but serves as a stepping stone for individuals seeking positions in veteran

companies. The most important observation to recognize is that each industry has its own set of

unique challenges to face, thus, an entrepreneurs objective would be to develop, implement, and

fuse together a realistic plan with passion and enthusiasm.

RECOMMENDATIONS

The information gathered in this report is up-to-date and current, the oldest report cited in this

paper is JetBlue’s 2020 Annual Report. Though partnerships were briefly discussed, the strategy

of merging a private company with a commercial company was not. Case Studies in this course,

MAN4900, suggests the possibility that some airline companies partner up with others to create

relationships that benefit one another, such as American Eagle, QantasLink, and more.

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REFERENCES

Airline and Commercial Pilots. U.S. Bureau of Labor Statistics. (2021, November 17). Retrieved

from https://www.bls.gov/ooh/transportation-and-material-moving/airline-and

commercial-pilots.htm.

Burgueño-Salas, E. (2021, September 10). Average Prices for Boeing Aircraft as of March 2021,

by type. Statista. Retrieved from https://www.statista.com/statistics/273941/prices-of

boeing-aircraft-by-type/.

Hayes, R. (2021, March 2). JetBlue Annual Report 2020. JetBlue. Retrieved from

http://blueir.investproductions.com/investor-relations/financial-information/reports/

annual-reports.