Startup Costs Reduction Tips from the Airline Industry
Your startup costs are pretty well bootstrapped, but is your start-up as lean as it could be? The airline industry is facing rising costs everywhere, and like a startup running on a credit-card balance sheet, it is taking every step to reduce costs everywhere to try to stay solvent and possibly, profitable.
Startup Cost Savings Tips
The airlines have become masters of cutting costs and learning to live on a shoestring budget. To help them survive, the airlines have followed a number of pretty innovative cost-savings methods this past year. Paul Kedrosky highlighted these statistics in a post today:
- One airline saved over 17 gallons/year per pound of weight per airplane after shedding inflight phones, ovens, excess potable water, and some galley equipment on an older fleet
- In removing seatback phones from its MD-80s and B737-400s, another airline shed 200 pounds per airplane, translating into 3,400+ gallons saved annually
- Alaska Airlines indicated in March 2004 that removing just five magazines per aircraft could save $10,000 per year in fuel; also, the airline has reduced the weight of catering supplies
- Air Canada considered stripping primer and paint from its 767s to save 360 lbs. per plane
- JetBlue and US Airways and others have moved toward a paperless cockpit
- By removing six seats, JetBlue reduced A320 weight by approximately 904 pounds
- Airlines have been able to remove ovens, trash compactors, or even entire galleys, due to the elimination of hot meals on selected flights; others are using lighter seats; they have also removed magazine racks and replaced hard cabin dividers with curtains
- AirTran ordered carbon fiber Recaro seats for its 737-700s to shave 19.4 pounds per row, resulting in estimated fuel savings of $2,000 per year per aircraft
- Alaska’s new beverage cart, at 20 lbs. lighter, could save $500,000 in annual fuel costs
- Some airlines flush lavatories during extended ground delays to minimize takeoff weight
Cost Reductions at Your Startup
I think the biggest piece of take-away from the examples above is that it’s the small stuff that over time really adds up.
You’re probably using credit cards to fund your startup, but are you paying interest every month? Why not switch over to a low-interest or possibly 0% credit card and try to reduce costs on interest.
What about employees? Your payrolls biggest cost every month is labor, so make sure anyone you have on your staff is adding value and working to pay off their wages. As a startup, it’s easy to let things get out of hand and unperforming employees can be one of the biggest cost drags as well as emotional drags on a startup and its founders.
Have any innovative startup cost saving tips you want to share? Let us know in the comments.
