So far in this series we’ve explored how to plan your airline,
obtain finance, put the key elements of your airline together, and choose your aircraft.
Next up is being able to operate your airline legally.
So today, let's walk through the administrative
and sometimes bureaucratic landscape that is airline certification.
Commercial aviation is a heavily regulated industry,
and rightly so. The inherent risks of collectively flying millions of
passengers every single day across the skies are apparent, and safety must be paramount.
It’s all about safety. And in turn, certification is how rules are enacted
and enforced to maintain consistent safety standards.
While variations exist in the regulatory and certification frameworks between countries,
the principles are largely common to all,
with oversight of safety standards as their primary goal.
This part of the series will focus on the certification process within the United Kingdom.
Although some variations will exist between aviation authorities and
jurisdictions worldwide, the UK's system is often used as the model
on which other countries base their regulatory frameworks.
Without going through the lengthy regulatory hurdles, your airline will be
uncertified, uninsured, and committing a criminal offense by operating at all.
Consequently, anyone involved in management at an airline
operating illegally can also be charged with a criminal offense and risk being sent to jail.
In the UK, the two primary certification schemes administered by the Civil Aviation Authority (CAA)
are the Air Operators Certificate (AOC) and the operating license. Unless you have
both of these, your airline will not be able to operate legally.
So first up, a valid AOC is the first significant certification milestone for any new startup.
This piece of paper will mean that your airline is certified to do all that it has proposed to do
with the approval of your regulatory body. This is
probably the most challenging hurdle for any new startup to overcome.
Obtaining an AOC will require vast amounts of time
and effort on your part and that of your team to satisfy the authorities.
It should be noted that some jurisdictions offer more 'relaxed' paths to achieving AOC
certification and are often chosen by some operators to base their
operations in those countries and to register their aircraft there,
even though the airline has little to do with that particular country.
It is the same in merchant maritime operations, with so-called 'flags of
convenience' countries offering a simplified route to obtaining the requisite licenses.
An AOC concentrates on more general planning basics. You will be required
to submit an application that covers the following subject areas, which will
then be explored further in a follow-up meeting with an inspector from the CAA -
The organization of your company Where your operation will be based
The intended AOC management structure The competence of those working in the company
AOC financing The type of operation and aircraft
And the geographical area you intend to operate in
You must also demonstrate an understanding of the regulations and requirements.
Following a successful outcome of this meeting,
you'll be invited to submit a complete application for an AOC.
Should this process also prove successful, the next step is to obtain an operating license.
The operating license process is more rigorous than getting an AOC,
requiring far more detail to be provided.
In the UK, the CAA offers two types of operating licenses:
a Type A operating license is required for aircraft with 20 or more seats
while a Type B operating license is required to operate aircraft with 19 or fewer seats.
Requirements for each type are largely identical but have the following exceptions:
Applicants for Type A licenses must pass a financial test,
and the CAA will continue to monitor their financial health.
Type A license holders must also keep the CAA updated with details of company
particulars every six months. Type B license holders need only do so once every year.
Similarly, in the United States, the Federal Aviation Administration (FAA) also offers
different certification classes depending on the type and scale of operation proposed.
Before applying for an operating license, startup airlines need to meet stringent
staffing requirements. The first step is to begin hiring airline management executives
and appoint key 'accountable staff'. These employees are those in charge
of handling all safety matters and will be held liable in the event of any incidents.
Your regulatory body will need to be satisfied that you have a suitable amount of high-caliber,
adequately qualified officers in place that will oversee all matters relating
to safety within your airline before it considers offering an operating license.
Furthermore, those officers (also referred to in the UK
as 'post-holders') can be subjected to regular scrutiny and inspection by the regulatory body
so that standards are being maintained and that safety is constantly addressed.
As part of Type A licensing in the UK, new airlines must prove sufficient funds to support
their operations. While rules regarding minimum levels of funding vary between jurisdictions,
airlines usually need to demonstrate that they have enough cash reserves to fund the entire
startup process and have enough finance available to support their operations
for months or even years to satisfy the relevant authorities.
Applicants for a Type A operating license must demonstrate that they have sufficient
funding for the first two years of operations, including that they can meet their costs for
the first three months of operations without any income whatsoever. The exact amount of funding is
established by the CAA based on a realistic business plan submitted by the applicant.
The CAA will continue to monitor the financial health of Type A operating license holders. It
is important to note that licenses can be revoked or suspended by the CAA if
it considers a license holder's resources are no longer adequate for the operation of an airline.
Authorities such as the CAA or indeed the FAA are very aware (and have learned from
previous experience) that inadequately funded airlines are often the ones where
safety is often bypassed as the fight for financial survival becomes its priority.
Regulatory authorities always have safety at the top of their priority list, although
airline failures and stranded/inconvenienced passengers also rank pretty high up on that list.
Regulatory bodies generally require airlines applying for certification to have at least one
aircraft in their fleet, either purchased outright or leased exclusively for at least six months. Of
course, the type of aircraft varies depending on the type of operation the airline has planned.
Once you have an aircraft, you will need to ensure that you have suitably qualified,
licensed, and experienced flight crew that can fly the aircraft safely.
If carrying passengers, you will also need to demonstrate that your cabin crew
are all trained to a suitable level in safety protocols
and have been trained by an organization that meets the requisite safety training
stipulations and accreditations - that may be your organization if you have set up your
own in-house training operation, or it might be provided through a third-party supplier.
It should be noted that cabin crew and flight crew will be subject to regular assessment
and testing to ensure they maintain standards in the air. Your airline may well develop its own
training centers for this and build a simulator center for recurrency training for pilots.
In the initial stages, however, it is more common for startup airlines
to use the facilities of a third-party provider,
given the sheer costs of purchasing flight simulators for a small fleet of aircraft.
Alongside your new aircraft with people to operate them, you will have to demonstrate
that those aircraft are airworthy at all times, in all conditions, and that you have a suitably
certified maintenance program in place to ensure that your fleet is 100% safe to fly at all times,
and awareness of the need to ground an aircraft when it becomes necessary to do so.
The CAA and FAA monitor maintenance programs intently, which means airlines must submit
their plans before they begin operations. The programs must include both routine and heavy
maintenance details of both airframes and parts, all as specified by the manufacturer,
with comprehensive documentation libraries and paper trails to support each program.
Maintenance can either be outsourced or even carried out in-house.
Either way, the maintenance provider can expect regular monitoring visits
from the regulatory body to ensure standards are being maintained.
Such visits can be scheduled or unscheduled, and 'ramp checks' are not uncommon. Even when
aircraft are sitting at an airport gate awaiting their next set of passengers,
inspectors can and will arrive unannounced for a 'line check' to ensure that everything is in
order from crew and maintenance perspective before that flight is permitted to depart.
Your citizenship may affect where you can set up the airline you own.
According to the CAA, the airline business that will hold the operating license must be both
majority owned and effectively controlled by UK resident companies or individuals. That means at
least 50% of the airline must be owned by either a UK national or a UK-based corporate entity.
For example, although Virgin Atlantic has had foreign investors in the past
(Singapore Airlines and, more recently, Delta Air Lines),
the foreign ownership rules have restricted these airlines' proportions to owning just 49%
of Virgin's shares, leaving the majority of 'ownership and control' in the UK.
In other countries, the regulatory bodies impose their own rules regarding who can own or
operate an airline in that country. In the US, the operating license applicant must be a US citizen,
and 75% of the airline's controlling interest has to be owned by an US citizen.
Lastly, your airline and its directors will be assessed
for their fitness to practice both as a company and as directors of a business,
respectively. The checks ensure that applicants for operating licenses are of good repute
and that none of the people involved in managing the airline are bankrupt.
All airlines must also show proof of insurance for both their aircraft and operations, also
known as an 'Economic Authority'. The mandatory airline insurance ensures any victims of accidents
are compensated appropriately, and that airline failure or bankruptcy doesn't affect compensation.
Before an operating license is granted in the UK,
the applicant must demonstrate to the CAA that sufficient insurance is in place for:
Death or injury to passengers Third party damage
War risk Baggage and cargo
If you are lucky enough to be granted your AOC and operating license, then you’ll need to be
prepared for regular audits, inspections, and safety checks so that the granting authority
can be assured that those high standards you had at the start are being maintained at all times.
Deviation from regulator standards will be met with penalties
and could result in grounding of aircraft.
Next up on your list is getting a route license, which allows your airline to fly on routes,
normally from a point of origin within your home state.
Route Licenses do generally not cover just a single route despite their name.
Usually, route licenses permit any operations within the area permitted by the holder's AOC,
though specific restrictions may be placed in particular circumstances.
For example, flights between the UK and many countries are limited by bilateral Air Service
Agreements, which are agreements between governments that dictate how many carriers
and/or how many flights can operate on a given route.
To operate scheduled commercial flights to a given country,
an airline will need to be designated by the Secretary of State under the terms of the
Air Service Agreement in place between the UK and the destination country and hold a route license.
You should know that getting a route license does not guarantee designation by the Secretary
of State. For example, up until recent times, there was a bilateral agreement between the UK
and Russia that permitted just two airlines from each country to operate between Moscow and London
- most recently, British Airways and easyJet from the UK and Aeroflot and Transaero from Russia.
Similarly, the historic and long-standing Bermuda 2 agreement provided for only two
airlines from each country to operate between any city in the US and London Heathrow Airport.
To be awarded your certification to operate, you’ll need to complete all the work required by
regulators. This may include answering questions, attending meetings, and being open to inspections.
All that said, being awarded your certification is a considerable achievement.
It gives the green light to your business plan, your operation,
and the right to start carrying the passengers and or freight that will earn your airline income.
Next time, we’ll be looking at all things passenger-related:
Examining everything you needed to fly people in your planes. We hope you’ll join us then!
For now, we’ll ask this question: Are you surprised by how much paperwork is required to
get all the proper certification and licensing for your airline? Let us know by leaving a comment.