The Business of Aviation

            There are a lot of sayings that one may hear as they go through life.  One of these sayings that is found in the aviation world is “How do you make a small fortune in aviation? Start with a large fortune.”  This saying may hold some truth to it in that it can be very difficult to make a successful business in the aviation world.  The reason this statement is around is there are many companies that have attempted to rise up and make it big.  Not too many companies actually make it big in aviation though.  Back in 2008 a company called Eclipse had to file bankruptcy and sell off the company for a fraction of what it was purchased for despite having launched a big effort to manufacture light jet aircraft and was successful in bringing them to the market faster than many of its competitors.  Problems arose after certification problems led into a market collapse.  It isn't uncommon to hear of people who started flight schools only to have them close their doors after a short period of attempting to build their business.  If you look at the larger airlines and what it takes to make them successful, you will see a very harsh environment.  Only recently have fuel prices started falling.  In the past, skyrocketing fuel prices and a market collapse have forced airline merging and bankruptcies.  In 2012 it was reported that some of the top airlines saw a profit margin as low as 0.8%.  With margins that are this low, it is surprising to me that there are still start-up attempts of other airlines hoping to make it big. 

            Despite business in aviation being tough, it is not impossible.  It is important for any business to find its niche in the market.  Finding a portion of the market that has untapped potential is huge in trying to start a successful business.  A start-up airline could not hope to succeed if they are trying to start on routes that are already covered.  Baltia Airlines is attempting to find its niche as the first airline to offer non-stop flights from JFK airport to Russia.  Aviation is a constantly evolving industry and this means that companies have to adapt to survive.  Over the past decade there have been mergers as one airline absorbs another to continue to evolve. With an industry so unpredictable, only those that catch the trends quickly survive.  Alaska Airlines has positioned themselves well to make 33 of their past 39 years in business profitable.  Their marketing strategy keeps them on top of the game in the Alaska region.  They built their corporate image well and it has made them successful.

References:

JetAviator7. (2008, December 17). To Make A Small Fortune in Aviation Start with a Big One. Retrieved March 29, 2015, from https://all-things-aviation.com/aviation/to-make-a-small-fortune-in-aviation-start-with-a-big-one/

Kalb, I. (2013, March 7). Why Alaska Airlines Has One Of The Best Corporate Images In The Industry Read more: Http://www.businessinsider.com/alaska-airlines-outperforms-the-airline-industry-with-more-effective-marketing-2013-3#ixzz3VvKdo3Bs. Business Insider.

Mouawad, J. (2012, May 25). The Challenge of Starting an Airline. The New York Times.

Patruno, A. (2013, April 1). How do you make a small fortune in aviation? Retrieved March 29, 2015, from http://aviationstationx.blogspot.com/2013/04/how-do-you-make-small-fortune-in.html

Sankaranarayanan, V. (2014, May 28). Starting a New Airline: Now Harder and Easier. Retrieved March 30, 2015, from http://www.thoughtworks.com/insights/blog/starting-new-airline-now-harder-and-easier

Welcome to Baltia Airlines. (n.d.). Retrieved March 30, 2015, from http://www.baltia.com/flights.html