In its first years of flight operations CanAm is bound to have some demanding scaling tasks to overcome:
1. The most important one being accumulating losses due to high operating costs at low frequency of flights and possibly low load factors. This will be especially addressed in the first run -up years preparing for launch.
In order to compensate these losses and mitigate risks, CanAm shallfollow a soft launch scheme in close cooperation with a reliable charter partner -already operating four-engined A340’s.
A possibly intelligent tactic will be the purchase of two A340-600 aircraft from Lufthansa in order to support the operations for several aircraft of this type with our Charter partner, USC.
2. In the preparatory phase, the most important is application for the Airline Operation Certificate (AOC) andand in parallel reservation and preparation for the acquisition of aircraft. Equally important is the detailed planning, early hiring of crews and employees, which are required within the AOC. Hence, in the first year there will be a slight hangover of personnel, which is recruited for the full operation.
3. Then, in the first year of flight operations, CanAm will commence flight operations with 3 or 4 aircraft -actually with 2 fully operational and with a large overhead of ground personnell, but quickly then ramping up the operations and flight destinations as more aircraft become available.
4. There will be a challenge, aligning the ramp-up with emerging market needs. Year two of operations (2027) could already see six aircraft and year three the full envisioned twelve aircraft in operation to be able to serve all prime destinations within high catchment areas.
We expect some growing pains during start-up and the ramp-up phase, as a result of more costs being incurred than aircraft operating in combination with an initially lower load factor than anticipated.
In order to compensate early the load factor there CanAm will employ two tactics:
- Start very early (in 2025) with marketing activities in the US way ahead of operations by employing seasoned airline professionals. These professionals will be organizing getting the destination market ready for CanAm operations by attending trade fairs within both industries but also in close cooperation with the tourism activities by the Canary Island government.
- Ingenious pairing of destinations to ensure high load factors. When, during the initial ramp-up phase load factors are encountered, CanAm, operating as a Charter Airline has the liberty to change the schedule in such a way that two flights can be merged into one. In order to minimize passenger discomfort, departure times shall be aligned in such a way that the aircraft passes its intermediate destination at approx. the time the second flight would take off, thereby ensuring only a short delay for the passengers, which can be compensated by long-range flight conditions.
Combinations of flights that could possibly be merged: are Chicago & Seattle, Boston / New York & Chicago, Houston & Los Angeles, Washington DC / Atlanta.
At the same time we shall install a flight from Las Palmas to Capetown in order to attract clients for the Capetown destination. As we are serving from mayn American airports, the transit rout via LPA will contribute strongly to the overall load factor from and to LPA.
The above concept ensures that every flight has a high load factor for positive economy and helps limiting the losses incurred during start-up.
In order to fully comprehend the significance of the ramp-up phase for the overall economy, detailing the costs incurred in the different phases could be helpful:
Operations in Detail
2024 Preparatory Phase
This stage tends mainly to preparation of documents,
The Internet Domain CanAm.aero has been reserved and 10 central email-addresses have been installed and are operational. First contact has been made with Lufthansa concerning the modalities and timeline for purchase of retiring aircraft in combination with serious revamping by Lufthansa Technik.
What needs to be tackled now is the application for the Registered Trademark CanAm. Presentation and talks with the Canary Island Authorities and Tourist Authorities are planned for October which could ultimately result in LOI’s with the Canary Islands Government, the Canary Islands Tourism Board and possibly with local Real Estate Partners.
The costs incurred in this stage are minimal.
2025 Preparatory Phase
This phase will focus on contractual negotiations with tourism operators and freight forwarders in the US. There will also be contractual negotiations with Spanish Fashion Brands and the Tourism Board GC. With these results on hand, the project will be ready for exposure to serious Investors.
As soon as these have committed to engage in the project, preparation and application of Airline Operations Certificate (AOC) will be started. For this, the setup requires experienced airline professionals.
- Investor Relations travels and presentations
- Presentations and reporting to investors
- Marketing Agency CanAm / Tourism
- Management Employees
- Cabin crew contract work -legal advisor
- Company vehicles LPA / TFS / SPC
2026 Start – (Aircraft Acquisition and Contracts)
- Tour Operators Contracts and Preparations – Promotional Sales
- Charter Operations for an initial 4 destinations
- Negotiations with Destination Airports (Slots and Procedures)
- Aircraft purchase Contracts – Lufthansa AG
- C/ D Check Contracts – Lufthansa Technik AG
- Investors Airfleet costs lease-back
- Cabin crew hiring for AOC and Training (3 crews =36 crew)
- Social costs f(GC)
- Uniforms f(Fashion Brands)
2027 First year of flight operations 2-3 Destinations
Start- up of Operations at Las Palmas Airport
2 – 4 Destinations – New York, Chicago, Los Angeles plus Cape Town
Ingenious pairing of destinations to ensure high load factors:
- Washington DC / Atlanta
- San Antonio / Los Angeles
- New York & Chicago
- Abuja, Nigeria
- …
2028 Ramp-up (6 Destinations)
Next long-range destinations come into flight plan: Seattle, San Francisco, Houston
Ingenious pairing of destinations to ensure high load factors:
- Chicago & Seattle
- Boston / New York & Chicago
- Houston & Los Angeles / San Francisco
- Washington DC / Atlanta
Final Setup – (13 Destinations – bi weekly operations)
Destinations: New York, Los Angeles, Chicago, San Francisco, Houston, Washington DC, Atlanta, Boston, Seattle, Toronto, Montreal, Vancouver
Expansion and Lookout (Further Intercontinental Destinations)
Hurghada-Luxor / Abu Dhabi / Namibia – Cape Town