And it takes that much to buy airplanes, secure routes across the world, get exclusive deals with local tour operators, and so on. Starting small and being targeted allows a new business to tinker with their commercial model to ensure it is profitable, to adapt to market preferences, to fail fast and change strategy.
Small means agile. Once a model is successful on a targeted local scale, companies can look to add new services or destinations, using the same agile approach. Constantly adapting to the market and customer desires to create an experience modelled around the customers, not the pre-existing business plan.
Building up in this way also means you can keep costs low. At flypop, for example, we lease aircraft toward the middle of their service life. Not only does this make things more cost-effective, but it also provides flexibility while removing the liability of a fleet of planes from our balance sheets.
In keeping costs low and scaling sustainably, new businesses can raise as much debt as they need for the next stage of their growth, rather than taking on a massive chunk of debt that will hang over you for decades to come. Servicing a large chunk of debt like that undermines your profitability and will, ultimately, have to be passed on to your customers in one form or another.
And, since the budget is such an important part of planning a holiday, keeping costs as low as possible is essential. To summarise, Thomas Cook failed because it was stuck in an outdated model that both undermined customer experience and was unsuccessful at creating enough profit to service its debt. If you are just starting out, focus on a small geographic area and create a business model that is both popular and profitable, keep costs as low as possible, and only take on as much debt as you need at the time.
I believe the failure of Thomas Cook will provide both a warning and an opportunity for new travel companies: put your customer first and build a flexible yet profitable model. Nino Judge is founder of UK-based low-cost long-haul airline, flypop. Heis an aeronautical engineer with a passion for consumer needs and is committed to protecting the environment. He believes that companies should shoulder the financial costs of offsetting their carbon emissions produced by running the businesses they operate, as opposed to asking customers to foot the bill at checkout.
Therefore flypop aims to be the first truly carbon neutral international airline. When it begins operations, flypop will offer direct flights from London Stansted Airport to second-tier cities in South Asia, targeting the growing travel requirements of the visiting friends and relatives, tourism and business segments.
Frustrated with high costs and long flight times no direct flights involved in visiting family in Ludhiana India from the UK, Nino first explored the idea of an airline to serve India with non-stop low-cost flights back in Team or Enterprise Premium FT. Pay based on use. Does my organisation subscribe? Group Subscription. Premium Digital access, plus: Convenient access for groups of users Integration with third party platforms and CRM systems Usage based pricing and volume discounts for multiple users Subscription management tools and usage reporting SAML-based single sign-on SSO Dedicated account and customer success teams.
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