I know how CanAm sounds when somebody hears about it for the first time. Some guy living on a small Canary Island proposes a new long-haul airline. Yes, I know, it sounds enormous. If somebody’s first reaction is that I have gone a bit crazy; -hey, even that I can understand! It IS really enormous! And that is perfectly clear to me.
But I am also an engineer, and I have spent a substantial part of my professional life analyzing companies, projects and complicated technical systems. I do not simply fall in love with a grand idea. I take it apart, question the assumptions, put the pieces into a spreadsheet and keep changing the numbers until the weak points begin to show. If the numbers say no then the answer is no.
Most people are comfortable evaluating what already exists. Very few are willing -or able- to construct in their minds something that does not yet exist. Many hear the words “new long-haul airline” and stop dead in their tracks right there, before looking any further. Like how the different revenue streams from the network support one another. But the size of an idea surely is not an argument against it. Quite the contrary: Size does matter!
Some institutions whose responsibilities should naturally include the economic development and international accessibility of the Canary Islands have shown remarkably little curiosity. With a few exceptions, the response has been slow, late or simply nonexistent.
Maybe previous initiatives were just conceived too small. Maybe earlier disappointments have reduced the appetite for anything unfamiliar. Or maybe it is simply easier to manage what already exists than to imagine what could exist. Whatever the reason, a lack of curiosity, vision or responsiveness is not an economic argument against CanAm .
And No!, my ability to envisage a new airline does not mean that I presume to build something of this scale all by myself. That would be ridiculous!
There are several highly profitable airlines in the world, including great airlines based in countries that do not simply sit on oil and were never handed some magical advantage that guaranteed their success. None of them appeared overnight in their final form.
First, somebody recognized an opportunity. Then came the structure, then the people, the capital, the aircraft, the expertise and the market access. The airlines grew fast and in substantial, but manageable stages.
So, my first objective was to investigate my vision based on a rather obvious market anomaly, the lack of a coherent direct air network between North America and the Canary Islands. I wanted to know whether that gap was purely coincidental, or whether it could really form the basis of an economically viable operation.
My second objective was to turn that initial route opportunity into a much broader aviation concept. This part has taken almost two years of my life and I am still excited:
CanAm is not dependent upon one isolated city pair or one particular type of passenger.
It combines premium passenger traffic, higher-spending Canary Islands tourism, cruise-line feeder services, travel tailored to African diaspora passengers, diplomatic and institutional travel, international business connections, and several forms of cargo utilization between North America, the Canary Islands and selected African markets.
Each part has value on its own, but the real strength comes from putting them all together.
Now, my third objective is to bring the right people to the table. And of course, an airline is not created by one person, and I have never believed anything close.
Of course I know that it takes aviation professionals, creative investors with foresight, aircraft and maintenance specialists, legal and regulatory expertise, commercial partners, political access, and trusted relationships at both ends of the flight path.
That is why I decided to step out from behind what had been a largely private mind game and put my name behind it. aeroTELEGRAPH helped me take that step with an extensive interview that questioned almost everything, quite rightly so! And once CanAm became publicly visible, experienced airline professionals began examining and challenging the concept. Some even offered to become involved, which told me that the idea deserved to be taken further.
Now, in my extensive professional life I have experienced many times, that inside a large corporation access to real decision-makers is often blocked by the levels in between. Some GMs or heads of departments pursue their own small agendas, while others defend established structures or filter out anything that does not fit their familiar world just because they simply cannot imagine it. During my years as a management consultant for large corporations, we called this the “clay layer“, because even very good ideas have a hard time getting through.
But my confidence in CanAm is not based on enthusiasm alone. That would be foolish.
Behind the concept is a rather unforgiving spreadsheet with more than a hundred interdependent parameters, covering routes, frequencies, aircraft utilization, seating, fares, passenger load factors, cargo, operating costs and alternative fleet scenarios. It is not perfect, because no model is, but it gives a pretty good picture of the commercial reality. The spreadsheet does not care whether I like the answer, and sometimes it tells me that I am wrong, which is exactly what I created it for.
The simplest way to understand CanAm is to forget -for one moment- the difficult question of how it will be built and just imagine that the airline already existed.
Please bear with me one moment and just follow my vision: North American passengers travel directly from several destinations to the Canary Islands, cruise and leisure customers enter the network, and other travelers continue through the Canary hub to select African destinations. African diaspora traffic moves in both directions, business and institutional connections develop around the routes, and belly cargo flows between the continents is consolidated in a hub and moved onwards in dedicated freighters; -all with the support of reliable regional partners.
Would such an airline work? My answer is “yes, of course it would work!”
Viewed separately, some of these markets may appear too small to justify a new long-haul airline. Combined within one coordinated network, they create a completely different economic proposition, and one that would be remarkably difficult to copy. And that small detail even turned out to be one of the most important characteristics of the new airline!
A strong competitor could of course reproduce an individual route. But not the combination of traffic flows, schedules, cargo channels, regional relationships and institutional partnerships behind the complete CanAm network. If an established airline entered one of our markets, it would of course fly direct rather than copy the Canary Islands stop, because that would clearly make no sense. So, that single route would then have to justify its own aircraft and prove its own math, without benefiting from the combined traffic and revenues of the wider network. So, copying one route does not reproduce the economics.
CanAm also reverses the steady downgrading of Canary Islands air connections toward smaller aircraft and purely price-driven short-haul operations which today have culminated in clogging the Canary airports. So, what has largely disappeared is a premium product, large capacities and genuine long-haul connectivity that widebody operations can provide.
So, my job has been first to recognize the opportunity, then do the homework and give CanAm a form that others can examine, challenge and support.
The next job is to assemble the people capable of turning it into an operating airline. And again: I have never believed that I could achieve this alone, that is not modesty, it is simply common sense.
One of my favorite quotes goes:
“Nothing is more powerful than an idea whose time has come.”
I truly believe CanAm is such an idea.
Klaus J. Lauth
Founder CanAm Airways
quote from Victor Hugo