Business Plan Validation for a Start-up Airline in the Caribbean
Alton was engaged by a start-up airline, which was looking to launch ultra-low-cost carrier (ULCC) services in the Caribbean, to validate the ULCC’s business plan as well as its operating projections. This involved testing and validation of the key assumptions in the ULCC’s business model, as well as identification of any immediate red flags or exceptional upside potential.
Alton conducted a comprehensive review of the start-up airline’s business plan in adherence with key ULCC operating principles and best practices, with particular emphasis on the airline’s fleet and network development plans to identify potential opportunities and risks. Alton validated the airline’s growth plans and projections through detailed market analysis down to a route level, accounting for home-base airport selection and regional demographics.
In addition to network growth, Alton identified five potential opportunities for the ULCC to leverage:
- Ancillary revenue
- Fleet up-gauging
- Addition of longer range aircraft
- Commercial partnerships
- Additional hinterland market opportunities
Alton also identified key risks to the business along with potential mitigation strategies to counter those risks.
In part due to Alton’s work, the carrier successfully announced a US$60 million initial capital raise and secured its launch fleet of 737 MAX aircraft.