Why Leadership Structure Matters More Than Capital in Airline StartUps

Airline start-ups do not usually fail because of a lack of funding.

They fail because of how that funding is used — and increasingly, because of who is

driving the decisions. One of the most common risk factors I see is direct operational involvement from

investors who made their wealth in completely different industries.

Success in property, tech, retail, energy, or manufacturing does not translate into competence in launching an airline. Aviation is a highly regulated, capital-intensive, safety-critical industry with its own language, systems, and culture. Applying “generic business principles” without aviation expertise is a fast route to burning cash.

The Pattern Is Predictable

When non-aviation investors take the steering wheel, I see the same mistakes appear

repeatedly:

Aircraft Sourced Far Too Early

Investors often believe aircraft are the starting point. They rush to engage with lease companies because “assets show progress.” Their success in securing leases depends on how much money they are willing to part with. Early engagement increased the start-up’s risk rating resulting in higher lease rates and bigger deposits.

In reality, aircraft should be introduced as late as possible in the certification timeline. Early

aircraft commitments mean:

• Lease payments starting months before revenue

• Insurance, parking, and maintenance exposure

• Hundreds of thousands in monthly burn while still waiting on regulatory approvals

Ironically, this is the phase where cash is most needed for manuals, training, compliance systems, proving flights, and regulatory engagement.

In my opinion, speed to certification saves money. Early aircraft destroy it.

Airport Meetings Without Industry Fluency

Investors arrange meetings with airports thinking it’s like negotiating retail space or logistics warehousing, without consulting their subject-matter experts.

What they don’t realise is that airline–airport negotiations involve:

• Slot coordination

• Ground handling contracts

• AOC status and credibility

• Schedule feasibility

• Operational capability

If the investor cannot speak this language, and most don’t, three things happen:

1. The airport does not take the project seriously.

2. Opportunities quietly disappear.

3. It becomes a struggle for the start-up team to repair the damage

Airports back experienced operators, not enthusiasm.

Marketing Before There’s an Airline

Investors hire branding agencies too early. Social media goes live. Billboards go up.

But at that point:

• No AOC exists

• No schedule is approved

• No slots are secured

• No aircraft configuration is frozen

This leads to rework, regulatory conflicts, and wasted spend. Aviation marketing must align with licensing status, traffic rights, route authorities, and operational reality.

Websites and Sales Portals Built Without Aviation Compliance

Airline websites are not ordinary e-commerce platforms. They must address:

• Consumer protection regulations

• Ticketing rules

• Refund and disruption policies

• PRM requirements

• Data and security standards

• Distribution system integration

Getting this wrong isn’t just inefficient — it creates regulatory and legal exposure.

The Root Cause

Investors often struggle with one critical shift:

Owning the airline is not the same as knowing how to build one.

They hire experienced aviation professionals — then don’t trust them to do the job.

Instead, they try to direct certification strategy, operational negotiations, aircraft selection, and regulatory engagement. This creates confusion, delays, and friction with authorities.

No regulator wants to certify an airline run by someone without previous experience in the

industry. If they see the investor is not allowing the Accountable Manager to run the airline,

they get nervous.

I often use this simple analogy when I discuss an airline start-up project with a keen investor:

If your Accountable Manager hired the local butcher, baker, or florist to help write the Operations Manual, you as the investor would probably be horrified. Yet, when you (the investor), without aviation background try to direct AOC strategy, fleet planning, slot negotiations, or compliance processes, you are effectively doing the same thing.

Good intentions. Wrong expertise.

What Successful Investors Do Differently

The start-ups that succeed usually follow this model:

• Investors provide funding and governance

• Subject Matter Experts with credible experience run the programme

• The Accountable Manager leads regulator engagement and controls the funds

• Decisions are made by people who understand certification pathways

• Aircraft are introduced at the correct phase

• Marketing follows operational certainty

Investors can sit in meetings. They should stay informed.

But negotiations, regulatory submissions, and operational decisions must be led by professionals who have done it before.

The Reality

Starting an airline is not a typical start-up. It is closer to launching a regulated transport utility

inside one of the world’s most complex safety frameworks.

It requires:

• Years of industry experience

• Deep regulatory knowledge

• Proven programme management

• Understanding of cash burn timing

• Credibility with authorities, airports, and suppliers

Without that, money simply disappears faster, and the old saying becomes a reality: ‘how to

make a small fortune in aviation – start with a big one.’

In aviation, expertise is not a luxury. It is a survival requirement.

The most powerful contribution an investor can make to an airline startup is often the

hardest:

Fund it. Govern it. And let the experts build it.