Designing and financing a long-haul low cost international airline

This project involved the development of a long-haul, low-cost airline starting literally from a clean sheet of paper. Over a period of two years all planning elements were completed and the capital-raising was enacted in Australia and the United States.

Bill Meeke was engaged directly by a group of investors as the Project Manager to develop a concept with a sustainable competitive advantage, design a route network, select and purchase the aircraft fleet, configure the aircraft, design the fare structure, design the branding, negotiate bilateral capacity, develop the budgets, obtain the licences, negotiate overseas landing slots and address all other aspects of design and implementation, including in-flight service.

Throughout the ensuing period it became necessary to develop a ‘team’ of senior people with the requisite skills to raise capital and develop the massive database to underpin the budgets and financial planning. Bill Meeke then moved into the role of Chief Operating Officer with responsibility for all matters involved in licencing, aircraft acquisition and configuration, route planning, personnel recruitment and in-flight product development; he was also involved in supporting the process of obtaining aircraft finance.

The evaluation of aircraft centred around the Airbus A340-500 and the Boeing B777-200LR as the only long-haul aircraft capable of providing non-stop, two-class service between Sydney and New York as the ‘litmus route’ in the network.

The 777-200LR was chosen, the first eight aircraft were ordered and deposited and the negotiations with targeted airline investors in the US were launched and completed using a New York merchant bank. Bilateral capacity was assigned to the new airline ‘subject’ to all other completions and the recruitment of key management positions was readied.

At the eleventh hour the Australian cornerstone investor decided not to proceed despite having invested $-millions to get to this stage. The project was mothballed and Virgin Blue proceeded to launch “V Australia” using B777 aircraft to compete directly (under a market share model) in the highly profitable trans-Pacific market dominated by Qantas. Since then Delta has entered the market but to date no carrier has stepped outside the traditional hub-and-spoke structure that forces overflying passengers through hubs like LAX and SFO.