R&D Airlines is an airline that serves as an airline’s research and development division. The purpose of R&D Airlines is to provide route development services to the main airline by testing potential new routes using a low cost strategy. R&D would use used aircraft and cost controlled operations to test potential new routes and locate routes that would perform well for the parent company's airline. The division is an airline strategy that airlines around the world could use to reduce risk when attempting to enter new markets.
The Idea
The idea for R&D Airlines was created by David Aughinbaugh II on September 13th, 2019 and summarized in an article that he wrote for the FlyRadius Tower section of our site. In that article, David detailed how a special airline can be deployed to perform route research and development by following a strategy that Allegiant Air developed to serve small markets in the United States. R&D Air would follow a similar strategy by operating only used aircraft that can be acquired at a low cost and maintaining a low cost environment in which the airline will minimize its potential losses. In addition, the airline would implement the heavy use of surveys and data gathering to determine if there is potential demand for a certain route.
By using those strategies, an airline would then be able to minimize its potential losses and locate new routes that will allow them to grow.
Above R&D Airlines article photo, from this article, featuring Pinal Airpark in Marana, Arizona (US) (ICAO: KMZJ) with stored commercial jets by Alan Wilson on Wikimedia Commons and Flickr. Photo enhanced by FlyRadius and released under a Creative Commons Attribution-Share Alike 2.0 Generic license.
How R&D Airlines Works
1. New Subsidiary Formation
An airline would form a new subsidiary or division that would become R&D Airlines. The airline may operate it under its current operating certificate or apply for a new one depending on the cost and time situation that is appropriate for their needs.
2. Aircraft Acquisition
The airline would identify an aircraft that it can acquire at a low cost and operate in a cost effective manner. Used regional jets like the CRJ200 or the ERJ-145 or mainline jets including the Airbus A320 series and the Boeing 737 Classic and NG (early Next Generation) would be some of the aircraft that would fit the low cost profile.
3. Operations Formation
The airline would then develop operations requirements that are need for the airline to function everyday. A division of a current airline would not need much development time; however, a subsidiary with a separate operating certificate would need more development time. As part of the operations formation, the airline would need to select a base that would be beneficial to their potential test routes. A base at the airline’s main facility would be the most appropriate.
The airline will also need to establish R&D Airlines’ operations to control costs, while still having quality customer service. A different strategy will be followed than the main airline’s strategy as R&D Air would be focused on gathering data and testing routes.
4. R&D Team
A team that is dedicated to the R&D Airlines division will need to be assembled. Attention to the research and data analytics team is important as those individuals will help the airline make decisions on which routes to expand into at the main airline. All crew members will also need to be trained on gathering information on the front lines so that the airline can hear and see all angles of their R&D operation.
5. Route Selection
R&D Airlines will need to select routes to test and the team at the airline will need to use data and insights to determine which routes to test. Route selection will be important as R&D will need to initially gauge the potential for a route to perform well before they test the route with real airplanes. If there are too many route failures, R&D Airlines will not be able to efficiently locate new routes for the main airline.
6. Route Testing
R&D Airlines will launch operations at locations that the airline feels could be a potential addition to the company’s main network. Through the market tests, the firm will be able to gather information on the routes while minimizing costs.
7. Market Decision
The airline will make a decision on whether a route will become a part of the main operations after flights have been operated for a specified amount of time. A route that is performing well will be moved to the parent airline’s operations.
8. Continue Testing
After some routes are moved to mainline operations, the airline will continue to test new routes. In some cases some routes may stay within R&D’s operations for some time while the airline decides on the future of those routes.
Those 8 steps or categories comprise the key points of the operation of R&D Airlines. By ensuring that the 8 steps are part of the operations for R&D, an airline will be able to use the subsidiary to find new routes that will allow their company to grow.
