We continue our look at start-up airlines by heading over to the U.K. and having a chat with Hans Airways CEO Satnam Singh Saini. Fresh off its second round of funding, Hans Airways plans to start serving passengers in the fall, connecting the U.K. to secondary airports in the Punjab region of India.
Why is now the best time to start an airline?
Satnam Singh Saini: Running an airline is a capital incentive business. Covid has brought some reductions in costs but that can evaporate very quickly. The legacy carriers may have debt and legacy liabilities, they may and most likely will respond aggressively.
Temporary advantage cannot be a good reason to start an airline. You need a solid business plan that will stand the test of time and market knowledge and experience is the key ingredient to the success of a startup airline.
It takes 12 to 18 months to go through the regulatory process. The time to start setting up was at the outset of Covid. We submitted our application for the AOC on March 31, 2020, and all Operational Manuals are approved and awaiting aircraft acquisition that we are delaying on purpose.
What advantages has the current environment given you?
Saini: Covid has made it easy to negotiate with the Lessors. Startups are seen as high risk. Now with no legacy liabilities and debt, these are seen as less risky, especially with a strong board and experienced management team. We can acquire aircraft in our desired configuration at a reasonable rate.
"Temporary advantage cannot be a good reason to start an airline. You need a solid business plan that will stand the test of time and market knowledge and experience is the key ingredient to the success of a startup airline."
Pilots and cabin crew are more readily available and asking for lower salaries, but we will not take advantage of this. We are recruiting at the proper remuneration so that they want to stay with us for a long time.
How has your cost structure changed?
Saini: The one main difference to cost structure is the aircraft leasing costs that we have locked in for a long time.
We are a hybrid airline with the cost structure of a low-cost airline and the offerings of a regular full-service airline. We will give dignified travel experiences on long-haul flights and create extra revenue from ancillary services.
How do you plan to make a profit in VFR traffic, which typically does not produce high yields?
Saini: The knowledge and experience of the target market is extremely important. VFR traffic is resilient, and the pent-up demand is huge. Our team have worked on our target routes in every capacity and have thorough knowledge of the market and passenger needs. Passengers are willing to pay for a proper, reliable, punctual service. Having the right seat configuration will lead to higher yields.
What makes Hans Airways different from other start-up airlines?
Saini: At Hans Airways, if we assume something, it is backed up by facts, justified and we make well thought through statements. We have a proper corporate structure, and the board consists of wide-ranging experience, totaling more than 130 years in the airline and aviation sector. The management team is the envy of many established airlines.
How do you plan on creating brand loyalty among your customers?
Saini: We know our market and the customer needs. The traditional loyalty programs are not suitable for VFR traffic. Our loyalty program, HAPEEI (Hans Airways Passenger Environment Education Initiative) addresses this and we will make a difference to modern day issues that our passengers care about.
What will make your strategy different from other previous stand-alone long-haul carriers operating to VFR markets?
Saini: The right type of aircraft and the seat configuration. We base our operations and dealings with our passengers, colleagues, and regulatory bodies on sets of values as follows:
- Simplicity, Honesty, and Integrity
- Punctuality, Reliability, and Affordability
- Safety, Security and Compliance
We build relationships with our suppliers, customers, and colleagues. How we communicate and do it, you need to deal with us, or wait and see. We know our customers and shall be offering products that they need and are willing to pay for.
Where do you plan to be in 5 years as the aviation market in the western world democratizes itself due to the heavy debt legacy carriers have on growth and adaptation to their cost structures?
Saini: We would like to be an alternative offering for VFR traffic serving destinations in SE Asia, Europe, Canada and USA.
Kambr Media and the author wish to thank Satnam Singh Saini for this opportunity. As the carrier aims at its long-haul strategy, it is not the only startup with a focus in the same market. FlyPop which has recently announced that it will start flights from London-Stansted also plans to operate in the same market and will operate with the same fleet.
Other startup European carriers solely focusing on long-haul operations include Norse Atlantic Airways and World2Fly. Only in due time will we see whether the startup long-haul structure is one where cost can be controlled and not undermined by legacy carriers or new entrants into markets with non-hub strategies and cheaper cost structures.