Scheduled airline start-up models – the Low Cost Carrier model is the favourite choice

1st July 2021

As the collapse in demand for air travel has caused market gaps coupled with the availability of aircraft and personnel, we are seeing a significant surge in airline start-ups globally. As is always the case, some are paper airlines that will not actually launch and many that do launch will probably be destined to fail. In this analysis, we look to see what trends there are in the business models being adopted.

The pandemic has created unimagined disruption for airlines around the world, with international border closures and individual country lockdowns also limiting domestic travel.

The drivers of new entry are:

Market opportunities

The failure, restructuring or shrinking of incumbent airlines is creating gaps in the market which new entrants are seeking to exploit as and when travel resumes. From the tables below it can be seen that this is applicable in certain South American countries, Norway, South Africa and Italy where there have been either airline failures of capacity reduction as a result of restructuring.

Balance Sheets

An attraction for investors is that new entrants may be able to gain a financial advantage over incumbents, whose balance sheets are now burdened with debt taken on to sustain liquidity through the pandemic. For example, Norwegian’s business plan has the airline having $20m of debt per aircraft.

Aircraft cost and availability

Pre-pandemic aircraft were in short supply and start-ups were unable to match the cost of ownership achieved by the large LCCs such as easyJet, Ryanair and Wizz in Europe. Lease rates have seen substantial falls across most types and lessors have immediate availability.

Availability of personnel

Aircraft and experienced airline staff, both of which were scarce resources prior to the pandemic, are now widely and inexpensively available.


Many members of the supply chain such as airports, ground handlers, caterers and maintenance providers have all been adversely impacted by lower volumes and will be open to providing attractive commercial deals.

The tables below shows the list of 36 start-ups by region.

Europe start-up airlines

AirlineCountryBusiness modelFleet typeComment
Norse AtlanticNorwayLong-haul LCCB787Norwegian backfill
Air MontenegroMontenegroFull serviceE-195 
Andorra AirlinesAndorraRegionalATR72-500 
HiSkyMoldovaShort-haul LCCA319 and A320 
FlyrNorwayShort-haul LCCB737-800Norwegian backfill
PLAYIcelandLong-haul LCC connectorA321WOW backfill
Ego AirwaysItalyDomestic regionalE190Air Italy and Alitalia backfill
Sky AlpsItalyDomestic regionalQ400New markets from Bolzano
BeesUkraineShort-haul LCCB737-800Initially operating charter flights
flyPopUKLong-haul LCCA330Serving UK-India
Latitude HubSpainShort-haul LCCA319Partly funded by local government and hoteliers
Uep AirwaysSpainRegionalATR72Connecting the Balearic islands

Asia start-up airlines

AirlineCountryBusiness modelFleet typeComment
VietravelVietnamShort-haul LCCA321Domestic and regional
FlybigIndiaRegionalATR and Q400Based in Indore
Greater BayHong KongShort-haul LCCB737-800Cathay Dragon backfill
AeroKKoreaShort-haul LCCA320Domestic and regional
Super Air JetIndonesiaShort-haul LCCA320Links to Lion Air Group
OTT AirlinesChinaRegionalC919China Eastern subsidiary
Air SialPakistanShort-haul LCCA320Domestic

North America – start-up airlines

AirlineCountryBusiness modelFleet typeComment
AveloUSAShort-haul ULCCB737-800Point-to-point on unserved markets
BreezeUSAShort-haul LCCERJ and A220Point to point, secondary cities
ItaBrazilFull serviceA320Latam backfill
NellaBrazilRegionalATR-42Latam backfill
EcuatorianaEcuadorDomestic regionalTBALatam backfill
AvorisDominican RepublicTBATBA 
JetSmart PeruPeruShort-haul LCCA320Backed by Indigo Partners

Middle East and Africa start-up airlines

AirlineCountryBusiness modelFleet typeComment
LIFTSouth AfricaDomestic LCCA320SAA backfill
Burundi AirlinesBurundiFlag carrierTBA 
Ghana AirlinesGhanaFlag carrierTBA 
Wizz Abu DhabiAbu DhabiShort-haul LCC A321NEO 
Air Arabia Abu DhabiAbu DhabiShort-haul LCCA320 
Royal Zambian AirlinesZambiaRegionalEmb-120 and Emb-145 
Lone Star AirLiberiaFull service  
New Saudi airlineSaudi ArabiaFull serviceTBABacked by sovereign wealth fund

Oceania start-up airlines

AirlineCountryBusiness modelFleet typeComment
PacifikaNew ZealandShort-haul LCCB737-800Leisure routes to Cook Islands

Because many markets have shrunk in size, and may take a number of years to recover, the aircraft operated by many large airlines may now be too large for many routes. On short-haul routes the “standard” aircraft are either B737-800s of A320’s.

Where these large aircraft are too large this leaves a potential gap for airlines operating smaller aircraft that are better suited to current and future market sizes. That said, if demand does recover to previous levels this “opportunity” may be relatively short lived.

Most airline business models are represented by these start-up airlines, even unfashionable models such as long-haul low cost. Short-haul LCCs are perhaps best represented which is understandable given most forecasters belief that leisure recovers quicker than business and short-haul will recover quicker than long-haul.

Author: Tim Coombs