How to start an airline 

By Ing. Benjamin OWUSU

The reader may feel overwhelming by reading this technical article, it is actually designed for the following: (1) Entrepreneurs, (2) Executives, (3) Aviation Professionals and (4) Curious Aviation Enthusiasts or Av geeks.

There are 7-Step Guide to help applicant understand the process of starting an airline.

New airlines are launched every year, but starting an airline is not like starting a regular company.

It requires:

(i) Huge Capital (tens to hundreds of millions USD).

(ii) Regulatory Approval from the Ghana Civil Aviation Authority (GCAA) to obtain Air Operator Certificate or AOC.

(iii) Experienced Leadership (nominated post-holders with deep aviation backgrounds).

(iv)A Solid Business Model / Plan (Low-Cost Carriers, Full-Service, Regional, or Cargo).

Figure 1: Ghana Civil Aviation Authority (GCAA) Headquarters

Step 1: Build a Winning Airline Business Plan

Figure 2: An Airline Business Plan

Starting an airline begins with a solid aviation business plan that needs to show profitability from the beginning.

Every airline begins on paper. A solid Aviation Business Plan should include the following:

• A Market Analysis: Consider which routes you want to operate as a new airline? What is the market demand? Who are your competitors? Is there an un-met need in the market or underserved routes you can capitalise on.

Figure 3: Aircraft Routes

• Business Model: Consider either Low-Cost Carrier (LCC), Full-Service, Regional Commuter, Charter, or Cargo model as all have very different models and associated challenges.
• Financial Model: You need to calculate the CASM (Cost per Available Seat Mile), RASM (Revenue per Available Seat Mile), and Break-Even Load Factor.
• Ancillary Revenue Strategy: Especially important in an LCC model as extra baggage, seat selection, and onboard sales will account for 10–20% of the airline’s revenue globally.

The Economic Regulation Department of the Ghana Civil Aviation Authority (GCAA) and the Investors alike will review the business plan. It must really show profitability and sustainability from day one. After successful review and presentation an Air Carrier Licence (ACL) is then issued to the applicant.

Step 2: Secure Financing for Your Airline Start-up Costs

Figure 4: Starting an airline is expensive but there are funding sources to help

Launching an airline is expensive. Start-up costs vary depending on the size and complexity of your operations. A Small regional/charter airline could cost between $10M–$50M (USD) and a LCC with 2–5 aircraft anywhere from $100M – $300M (USD).

Sources of funding include but not limited to the following:

• Venture Capital or Private Equity
• Bank Loans & Export Credit
• Aircraft Operating Leases (most common for startups)
• Sale-and-Leaseback Deals

Step 3: Apply for an Air Operator Certificate (AOC)

Figure 5: Air Operator Certificate

The AOC is the license to fly. Without the AOC, you cannot sell tickets or operate scheduled services.

What is required to obtain the AOC are the five-phase certification process:

• Pre-Application Phase (Phase 1)
• Formal Application Phase (Phase 2)
• Document Evaluation Phase (Phase 3)
• Demonstration & Inspection Phase (Phase 4)
• Final Certification Phase (Phase 5)

That is;

• Pre-Application with the Ghana Civil Aviation Authority (GCAA).
• During Formal Application, there are submission ofkey manuals including an Operations Manual, Training Manual, Safety Management System (SMS), Maintenance Control Manual, Aircraft Maintenance Programme Manual, Quality Manual, etc.
• Hiring of regulatory post holders to the roles of: Accountable Manager, Head of Flight Ops, Chief Pilot, Head of Maintenance, Director of Safety, Quality Manager.
• Hiring of non-regulatory post holders to take the roles of: Ground Operations Manager, Security Manager, etc
• Demonstration flights with the authority’s certification team (inspectors) onboard.
• Final issuance of an AOC is usually within 6–12 months if you are properly prepared.

Step 4: Acquire Aircraft

Figure 6: A Passion Air Aircraft on the Kotoka International Airport Tarmac

Without the fleet of aircraft there is no airline, fortunately there are multiple ways to acquire aircraft.

Options for new airlines:

• An Operating lease: Lower upfront costs and more flexibility (most startups choose this).
• A Finance lease or purchase: High capital with asset ownership.
• A Wet lease (Aircraft Crew Maintenance and Insurance – ACMI): Short-term, ideal for providing flights or bridging gaps.

Major Aircraft Lessors include:

(i) AerCap Holdings N. V. (In Ireland),

(ii) SMBC Aviation Capital (In Ireland),

(iii) Air Lease Corporation (ALC) (In Ireland, Los Angeles and Hong Kong)

(iv) Avolon (In Ireland, Dubai, Singapore & Hong Kong)

(v) BOC Aviation (In Singapore, Dublin-Ireland, London- UK, New York-USA,        Tianjin-China)

(vi) Babcock & Brown Aircraft Leasing & Management (BBAM) – Offices based in               Dallas, San Francisco, Zurich, Puerto Rico, Singapore, Dublin, Tokyo and                               Korea.

(vii) Industrial and Commercial Bank of China (ICBC)

(viii) Aviation Capital Group (ACG) based in Newport Beach, California with reps.                   in Ireland, Spain, Shanghai, Singapore and the UK.

(ix) Dubai Aerospace Enterprise (DAE) – DAE CAPITAL

(x) BOCOM Leasing – BOCOM Aviation (In China)

Step 5: Secure Airports, Slots, and Ground Handling

Figure 7: Aircraft movement through slots authorisation by the Ghana Airports Company Limited (GACL)

An Airline cannot just simply fly to any destination, slots and distribution need to be authorised first by the airport authorities, such as, Ghana Airports Company Limited (GACL).

• Slots: At busy airports, you will need to apply via IATA’s Worldwide Airport Slot Guidelines (WASG).
• Negotiate Airport Agreements: These cover ground handling, gate access, fuelling, passenger services.
• Distribution of Tickets & Payments: Connect to a Global Distribution System (Amadeus, Sabre, Travelport) or IATA’s New Distribution Capability (NDC) for ticket sales, and register with IATA Billing and Settlement Plan (BSP) for travel agent settlements.

Step 6: Build Your Safety & Compliance Systems

 Figure 8: It is always safety first

Safety is non-negotiable in aviation. Regulators will require:

• Safety Management System (SMS) with risk reporting and monitoring.
• Maintenance contracts or CAMO approvals (continuing airworthiness).
• Insurance for passengers, aircraft, and third-party liability.
• Environmental Compliance as per the Ghana Civil Aviation (Aerodromes) Directives Part 16.

Step 7: Launch and Market Your Airline

Figure 9: The right promotion and partnerships are key to launching a new airline

Once certified, funded, and staffed, you can finally go to market:

• Launch PR campaigns, highlighting your Unique Selling Point (price, service, destinations, sustainability).
• Work with local travel organisations or agencies and airports to offer discounted tickets to help boost brand and destination awareness.
• Integrate with online booking platforms and travel agencies.
• Use loyalty programs or co-branded credit cards to lock in customers early.

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