Airline and Airport Management

Introduction

This document contains an extensive proposal detailing the creation and implementation of a novel airline service that shall run between London and Stockholm. It intended to cater equally well to business-oriented individuals and those wishing to travel purely for leisure purposes. A comprehensive analysis of extant services available upon said route will be conducted in addition to painstakingly estimating projected passenger numbers. It epitomizes what is expected from the final product through detailed design while simultaneously crafting all elements concerning distribution strategies. Inclusive are considerations such as determining airport destinations at each intended location and selecting the optimal aircraft model most suited to task completion. Ultimately, this culminated in drawing up meticulous schedules to meet customer needs while retaining fiscal responsibility by approximating costs associated with potential revenue streams. Inclusive factors are pertinent to achieving maximum profitability or minimal losses if any occur.

Assessing existing services on the route and background to the market

To evaluate the current offerings available along the route, an examination of the already existing services in depth must be conducted. Furthermore, understanding the market’s background will enable contextualizing these findings and making informed decisions moving forward.

Estimating passenger numbers

During September 2022, there were already several transportation options available to travel from Heathrow, Gatwick, and Stansted airports to Stockholm Arlanda Airport. A cluster of foremost airline carriers, specifically British Airways, SAS (Scandinavian Airlines), Norwegian Air Shuttle, commonly known as “Norwegian,” Ryanair, and EasyJet, are providing the assistance mentioned earlier. Sweden had an estimated record of approximately 775 thousand residents flying to the United Kingdom during year-end 2019. In contrast, about half a million tourists from the UK visited Iceland for leisure, with a quarter amount visiting mainly for business-related purposes. This data will be used to perform all the analyses in this work. The data for 2020 and 2021 was not used because it will not give a true reflection of the current situation as the flight operations were affected by the Covid-19 pandemic. The business plan is scheduled for the post Covid-19 pandemic; hence full flight operations will be assumed.

Taking into account the data gathered by CAA and analyzing the flight schedules as well as fares of current airlines, it has been extrapolated that a fresh airline service that operates between Stockholm to London is expected to accumulate approximately 12% market share in its initial year. Considering passenger traffic rates from before the COVID-19 pandemic, there will be an estimated total number of passengers traveling on this route, up to 1.3 million annually. This is based on the data obtained from the UK Office for National Statistics. The intended proposal outlines offering four round trips every day for convenience purposes. The airline departure from Arlanda Airport in Stockholm will be at 09:00 and 16:00 while departing from Luton Airport based out of London at 12:00 and 19:00

Product Features

Several decisions were made in the quest to conceive and layout product attributes alongside a plan for dissemination, encompassing devising an appellation for said airline. The prospective aviation entity shall be titled “Lutar Airways” (a name chosen by adopting the first three letters in the term “Luton” and the first two letters in the term “Arlanda” for the two airports where the airline will be operating from). The airline will function as a cost-effective conveyance agency, emphasizing the availability of reasonably priced tariffs for both vacationers and professionals. Prices are subject to alteration concerning extra features that patrons may select beyond their fares. Items such as travel bags or seat preferences will be the determinants of transport cost in the case of passengers with luggage. The company will operate daily with complete services, offering food and baggage. All these costs will be incorporated into the customer fare charges. The strategy intended for dispensation comprises an inclusive range extending from websites and mobile applications to multiple online traveling companies.

Choosing airports in London and Stockholm

The determination of an airport in London and Stockholm is a matter that requires informed decision-making. To arrive at the mentioned choice, several factors must be taken into account. These include the distance between options, their potential for the accommodation of people, and matters to do with the efficiency of operation, ease of access to the airport, and their economic feasibility compared to other viable alternatives. It would be essential to pay attention to these fundamental aspects when choosing from such options, given their potential impact on travel arrangements for passengers intending to commute through either city’s airports.

The notion of the proposed aviation business will come to fruition through its operation from London Luton Airport and Stockholm Arlanda Airport. These airfields are operational every hour of each day, which increases flexibility for the airline’s schedule and procedures. This will give the start-up a competitive advantage over the already existing airlines. The places chosen are also easily assessable and close to essential facilities and business areas, thus favoring all classes of travelers. There are also ready and affordable accommodations in the chosen regions that will prefer all passenger categories.

Selecting the aircraft type

In choosing the classification of the flying machine, the choice must be made concerning what sort of aircraft would best suit a given situation. This determination’s materials include physical characteristics, intended use, and functional capabilities. These variables demand detailed attention as they are crucial to deciding which variety is most appropriate for deployment based on its unique features and abilities compared with other options. Under physical characteristics, the size of the aircraft is essential as one has to consider the optimal capacity of the plane to maximize profits. The chosen aircraft should also be suitable for passenger use and have relatively low maintenance costs compared to other alternatives. One should consider all essential considerations when selecting from amongst diverse choices at disposal. These considerations will help make an informed decision about choosing only top-tier aviation machinery suitable for the purpose without compromising safety or efficiency standards set forth by regulatory bodies governing global airspace operations.

Alternatively, considering other factors, such as fuel consumption rates per mile flown along different routes taken during flight missions undertaken under various conditions encountered throughout air travel experiences, is an important consideration. With all these factors considered for profit optimization, the Boeing 737-700 aircraft with an impressive capacity of 149 passengers are chosen. This option has increased maneuverability when scheduling flights and provide leeway for potential expansion opportunities. It will give the start-up the best returns, recording minimal operation costs.

Producing a schedule

Generating a timetable can be challenging, given the constraints in place. It involves considering numerous factors that must merge to create an effective schedule. Creating such a document necessitates carefully considering all available information and resources and allocating adequate time for each activity or event throughout the allotted timeframe. Proper scheduling is essential in ensuring efficiency and productivity while minimizing wasted effort and resources, leading ultimately towards success in achieving desired goals within set deadlines. The scheduling has been made with the assumption that the total time taken for one way flight is three h 30min, which includes one hour for time zone change and two h 30min for the journey. An hour for turn-around time will be allowed by the airline. This schedule will be repeated daily. The scheduling has been made considering the best time for passengers to travel. It accommodates all possible time needs of travel by the passengers. The airline scheduling with all these factors put into consideration will be as shown in the table below;

The forthcoming air carrier intends to provide four regular cycles, totaling 417 seating accommodations each day spread equally amongst the flights. This capacity is arrived at by factoring in a load factor of 70%, calculated under the costs, revenue, and profit section.

Estimating costs, revenue, and potential profit or loss

When planning for a start-up, calculating expenses, income, and prospective earnings or deficits is essential. These are imperative to ensure that one clearly understands the company’s financial situation. By evaluating quantitative data such as numerical figures and qualitative information like market trends and consumer behavior, one can make informed decisions that pave the way for future success. In essence, estimating costs gives insight into how much is required within an operating budget while determining revenue streams help identify possible sources of returns on investment (ROI). The returns on investment combined with cost estimates allow companies to establish their potential profitability or susceptibility to losses during specific periods leading up until forecasted outcomes become evident over time through consistent analysis, thereby serving immediate and long-term goals.

Based on the aircraft chosen with a capacity of 149 seats, the following information can be calculated: Each aircraft will have two daily trips.

Annual capacity = 149 seats

Considering a load factor of 70% to ensure that the company is safe, the annual capacity becomes 0.7, giving 152,278 seats. This translates to a market share of (152,278÷1,276,000) , which is achievable considering the airline’s competitive advantage since it will be operating throughout the year. The aircraft also has a fixed transportation cost during peak and off-peak seasons, giving the airline an upper hand in market share. It will also provide a sense of trust to the target customers. The number of passengers is based on the 2019 UK Office for National Statistics. The round-trip fares will be £ 200 fixed amounts. The annual revenue is calculated as 152,278

Considering aircraft configuration D from the assignment given table, the annual cost for the first trips for the two aircraft will be £ 5.7 M. For the second trip, the annual cost will be £3.7 M M.

Therefore, the total annual costs for the two aircraft will be £ 7.4 M+11.4 M.

Subtracting annual costs from annual revenue generated gives the net profit for the airline as;

Net profit

Therefore, for the first year in operation, the company has the potential of making £ 11.6 M with a minimum market share of 12%.

It is approximated that the expenses related to initiating and managing operations of the airline during its first year will amount to £18.8 million, which encompasses expenditures such as rental costs for aircraft, compensation given in exchange for services rendered by employees on board, or otherwise affiliated with the company, charges for paying workers in the company, promotional activities aimed at enhancing public recognition of this brand’s name amongst other similar operational charges. Moreover, it is also anticipated that revenues worth an estimated total of £30.4 million are likely to be generated from these endeavors over this same period resulting ultimately in a net monetary gain totaling approximately £11.6 million once all relevant fiscal factors have been taken into account post their occurrence through appropriate examinations analyzing pertinent documents, as applicable by standard practice.

Critical appraisal of the results

Upon evaluation of findings, a thorough assessment is required. Conducting an in-depth analysis that comprehensively examines the outcomes is beneficial. An exhaustive examination will enable scrutinizing each aspect and determining its significance for future research endeavors. By conducting such a thorough investigation, it is possible to derive insights into what implications these results may hold and how they contribute to further advancing understanding on this particular topic. It is essential to emphasize that by performing such critical appraisals with scrutiny at every level, one could avoid any potential biases or assumptions in the interpretations derived from their discoveries – ensuring accuracy so as not only to enhance knowledge but also serve those who benefit most directly impacted sectors like academia or industry where innovative ideas flourish daily.

When considering establishing air transport services between London and Stockholm, it is imperative to acknowledge the pre-existence of multiple airlines currently running identical routes. Nevertheless, such market space still needs to improve regarding carriers capable of offering low-cost rates catering to tourists and business professionals. By securing a 12% market share, the undertaking mentioned above will have attained its goal as realistically set in this work.

The analysis of outcomes is essential. The actuation one furnishes ought to be altered in composition, so they can be a helpful indicator in evaluating said outcome’s worthiness or lack thereof. One should assess if these results can engender desirable consequences and gauge their fidelity by measuring them against research standards for accuracy and validity. Ultimately, it is crucial to scrutinize outcomes closely so that any shortcomings may be remedied efficiently, moving forward toward achieving the primary objective effectively and optimally within an appropriate time frame while ensuring high-quality outputs at all times without exception or compromise.

To conclude, initiating a new airline on the route linking London and Stockholm is an endeavor that poses difficulties but has prospects for profitability. The sector has recently observed progress as evidenced by high interest from business people and holidaymakers. Following COVID-19’s conclusion and return to time-honored travel volumes, there stands a considerable potential for market expansion.

Based on the above examination, it appears that there exists an opening in the aeronautical industry for another air travel company to emerge. This notion promises to attain roughly 12% of market participation within one year from its launch date. Despite this, several factors must be considered. Among those factors are determining the most appropriate airport for their requirements and identifying which specific type of aircraft would best suit their needs. Additionally, choosing how cost-effective prices can be set while featuring competitive product attributes will play vital roles in securing this new establishment’s prosperity; thus, further inquiry and evaluation are critical steps towards reaching these ends.

All in all, the route from London to Stockholm presents an enticing prospect for a budding airline. It is advisable to conduct a deeper analysis considering all factors involved in the airline sector, to come up with exact figures on the business gap already in this route.

Data Sources

Civil Aviation Authority (CAA) statistics – Table 12.1 on Airports | Civil Aviation Authority (caa.co.uk)

OAG schedule on Blackboard (September 2022)

UK Office for National Statistics (International Passenger Survey IPS) – https://www.ons.gov.uk/releases/traveltrends2019