How to Start a Business in Aviation? Startups Tips
In this interview we're going to cover various topics startups, aviation, different kinds of incentives available on the market, especially in Dubai. Interview hosted by Olga Fleming
Starting business in Aviation Sector seems not to be an easy task. That’s why in this interview I invited Frederico Fernandes to share tips on how and where to start an aviation business.
Aviation business is not only about aircrafts, there is much more to it. Aviation sector has been rapidly developing for past 15 years and will develop with the same speed for next few decades.
In this interview we are sharing with you my tips on how to start business in aviation with proven strategies, approach and professional mentors. And well as where to seek funding for aviation startups.
Interview hosted by Olga Fleming
Interviewer:
- Meet Frederico, who is in charge of aviation sector. He will share quite few tips on doing business in aviation, on growing a startup in aviation because he has great experience here in the market in Dubai. Please represent yourself a little bit.
Frederico Fernandes:
- My name is Frederico Fernandes. I’m from Portugal and for the last 2 years I’ve been in the United Arab Emirates. I belong to the Federal Government Civil Aviation Authority, which is committed to enhancing aviation investments globally. I am basically managing an event, where we scout for projects that need financing and place them together along with investors who are also looking for good opportunities. We believe that the aviation sector is one of the best disruptive and innovative sectors in the world and where the money is. After all, aviation has been growing from the last 10 to 15 years constantly and will continue to grow in the next 35 years. That is desired predictions of not only consultancies and eco but also for operators in the area that see the business growing in so many areas of the world, like continent-wise when speaking about Asia or Africa. So, definitely and we all travel more and more, and more people have access to traveling and to this beautiful sun on a winter day in Dubai. So, the market is there. This is one of my functions and the initiative is to meet people, investors and to try to light them that aviation is not only the airlines that flow, also the air companies or the aircrafts that they own to travel by themselves. Aviation is much more than that. This is all an industry.
Interviewer:
- People are usually thinking that aviation is only about aircrafts and parts to the aircrafts. What actually is also involved in the aviation business?
Frederico Fernandes:
- Yes, aviation is a tremendous industry. If you think about the most basic things there is no hospitality, there is no aviation. If you want to fly or to ship people in boats from the United States of America to here, it’ll take a lot of time. So, time reducing the connection, facilitating people’s activity is one of the things that brought tourism to the scope of where we are. In fact there is a lot of products in tourism that are enhanced by aviation. And aviation by itself is also inside the huge sector that has mini sectors. But those mini sectors are sectors with a lot of power. For example, airports. Everything is related to airports, and related to aviation. Because without aircrafts, airports don’t exist. It’s also connected to aircrafts and all the services along, for example airport security, safety, software. So, everything you can think about in other industries also exist in aviation sector with different rules, probably much more thought, much more controlled. But the market is very big.
Interviewer:
- True, and also drones, right, because it’s being kind of introduced to the market and everyone at the moment using drones only in charge of doing nice videos. But there is a drone delivery and I think it will be taken to a totally different level with not only regular deliveries but also the facilities including some kind of stuff we cannot even imagine at the moment. You are mentoring startups as well in this sector?
Frederico Fernandes:
- Yeah, we are doing it for GIAS (Global Investment Aviation Summit) one of the key participants of GIAS platform, the biggest global investment aviation platform for startups. Those startups can be from elsewhere, from drones essentially. Everything that flies and everything that makes things fly. Those things originate and connected to aviation. Although the time is limited, I take my time to listen to all of them. Sometimes I’m a little bit too straight because I am also an entrepreneur. I know how difficult it is for people to fuel up engine that needs to be, at some point, stopped and say “you need to rethink” or this doesn’t apply. So, I listen to a lot of startups in the process for the GIAS last year. We listened to around 100 and we had like 31 at the event.
Interviewer:
- This is a good percentage. I mean 31 out of 100 startups is really good, which means it’s really a great amount of startups that approach you and they are already on a high level.
Frederico Fernandes:
- Yes, when I think that something is very promising, I tend to speak with my closest contents, even my colleagues in GIAS or General Civil Aviation Authority to speak about what use that idea will have. That’s kind of a filter and we go to Intelak aviation incubator. Intelak is an amazing innovation incubator/tourism, that belongs to key-stakeholders here in UAE. Dubai’s Department of tourism, Emirates Group and also GE. So, they also have this amazing team. They go and watch in detail what is the promise, what is the product of that startup, which added value there is. And if they can’t they start to connect people to mentors and to partners, to develop the idea. For example, I had a mentoring session at Intelak. My role was, cause I deal with a lot of investors, my role was to explain both to those startups how to face the investors, how to connect with them in 2-5 minutes not explaining how to do the presentation but what to expect. And last year we had three startups that we were financing. Two of them are coming this year as our sponsors.
Interviewer:
- Yeah, I think for a good startups they are kind of well-prepared. They have less homework to be done on afterwards, much faster process for them to be developed and start. What kind of struggles they have when they try to start their business. What are they facing?
Most Objective thing in Aviation Sector is Knowledge
Frederico Fernandes:
- Most objective thing in aviation sector is knowledge. So, it’s very hard for a startup company in aviation sector to face investors that don’t understand aviation. Normally say that investors need to speak fluently aviation, so they can start thinking before giving some money. And we had a lot of examples. Imagine if you create an amazing software, that is going to solve each problem that airlines and airports have on the product called X, you go to the investor and say “Hey, listen, I’ve got this amazing idea, everybody’s crying for this. This will solve the problem X and you will tell me “What? Problem X? What is that? Is that scalable that people use it?” I know that everybody will use it, there is a pain for that, there is no competitive side, added value is also great. But he doesn’t speak aviation fluently, he doesn’t know what is X. If it was another investor in aviation sector, they would know what is X. They would say “No way!” It’s completely different. This happens.
Interviewer:
- When I think of what startups do, actually I tell everyone to do when they approaching industries. They should know first what did the industry invest in previously.
Frederico Fernandes:
- When I ask, because I meet a lot of investors, I always ask them what makes them ignite. What is the spark? And he always tells me. It’s the person in front of you. It’s not the business first, it’s always the person. You need really to know how to engage.
Interviewer:
- It’s always like there should be some chemistry between me and the investing person. Even if the project is great but someone cannot introduce this project or not sure of this project or just you don’t like him because you don’t like him, it will not happen.
Frederico Fernandes:
- Yes, unless there is a venture capitalist and you are already in acceleration process, sorting out the product, you can send your worst guy cause they were already in love with the project. There is no issue.
Interviewer:
- I think being a part of accelerator has it pros and cons but still to get into accelerator you have to know how to speak.
Frederico Fernandes:
- You need to pass that first. So first will be added value, the second the presentation really matters. Looking at what added value will the product has, it’s all about this. And there is one thing that I believe helps startups here in the Middle East - investors and even stakeholders are very open to business ideas. They even might not care about your business or solution, but they will receive you. They will talk to you, try to understand if that thing will bring some added value for them or not. This is different from other countries. Sometimes if people have too much money they will try to stay out of.
Interviewer:
- Unless some friend comes and tells “Listen to him, this product has some added value” and then they will listen. Here you can approach anyone and they will just be at least open to listening to you.
Frederico Fernandes:
- Apart from this, the country’s going forward with all these people on board. You can also see the operation and money. Emirates is an amazing company, Air Arabia low-cost. The Middle East is going very fast, Fly Dubai is also. Emirates fly everywhere. The professionals involved in these companies are amazing. People there work very hard, very high standards. I am just talking about these companies because you know them. Professionalism in these agencies is vertical to all companies in the aviation sector. This is the right place for you to be when you want to be in the aviation sector. And also because we’ve been discussing it now. UAE is an amazing place for growing a company. There is a lot of advantages and competition between those places so they keep throwing every year the best competitions, the best scenario, the best source of finance for you. There are companies that do aviation business, light industries, production of industries also related to maintenance, new aircrafts. Everything is here and people are very much welcome and they aspire to go forward. In my country, in particular, the aviation sector is not even close, we are not aspired to go forward.
Interviewer:
- I think no one is close because if you look at the aviation industry, Emirates have the local companies even though they are mainly privately held or with some support from the Government or vice versa there are both types of companies, both are successful. It is very interesting because it did not happen in any other region that has so many successful companies in the aviation sector and so much profitable.
Frederico Fernandes:
- Yes, this is a very polemic point in Europe because people in Europe forget about this is one of the things that GIAS also a part of infrastructure financed by Government and one of the things that cost a lot is an economic appraisal of the project. So, the project is good from A to B, you’re going to win this amount of money. It will not ever be good enough, it doesn’t make money for the people around us. For the people living here. This is an economic appraisal of the business and sometimes there is that question needs to be taken care of, which means that sometimes you need to have support from the Government. That business will probably start doing well in economics for the people around.
Interviewer:
- I am still trying to understand if check on few industries what they did in aviation sector and what they built around the tourism in aviation sector here. It’s just something that probably none country did ever.
Startups or Start some Business in the Aviation Sector
Frederico Fernandes:
- What they did it’s amazing. Other countries have been trying for so long with much more money and they never did. This is why it is the perfect place in my opinion. This is why I am sitting down here. Not because it is a beautiful city Dubai but it also brings a good opportunity, a good place for aviation development. I think or I wish that I could have convinced you guys if you are thinking about startups or start some business in the aviation sector it might be some software, medication, a product for a cabin crew, everything is aviation definitely it is the best platform for development.
Interviewer:
- It was just introduced last year during the GIAS they have already received a seed cap. Those guys approached so many companies, so many airlines and what they did actually is more sustainable, eco and lighter. And that’s it. If you do something like that and probably cost of the trade software may be a little bit higher but then how much they reduce.
Frederico Fernandes:
- The concept was not originally introduced to the GIAS, it started in Intelak. So, Itelak has a huge responsibility on this success. The founders of the concept as many other companies that came to Intelak or GIAS literally understood that the aviation sector is one of the best sectors to invest. If it means sustainability, innovation - they will invest.
Interviewer:
- So, we’ve talked about opportunities, advantages, struggles of the market and actually many of you may think that you can only form a company here with some local partners, which also not true. So many reasons, so many options are here. If you are just starting and you are out of this region, what would be the perfect way for the startup to start approaching you or maybe they should approach you or they should approach the startup incubator? What’s the first tip? What’s the root?
Frederico Fernandes:
- First I will say that they need to go gias.ae, have a look at what is the next event and apply for being a startup. If you are in a rush, you can also try to see intelak.com. Intelak incubator aviation & tourism in Dubai and they are always throwing up some courts where you can apply, come to the training facilities and understand if your project is worth.
Interviewer:
- They have a team, including Frederico. There is a team of various mentors who help you with different stages, starting from looking for industry preparing your presentation, upgrading your project. They may not accept you. You should know that approaching once may not be enough, you should develop your product. If someone rejects you, that means that you should either change your product or develop it more to show the real value. There is no value or the product is not different from something you can find at the market. Then what’s the point?
Frederico Fernandes:
- Definitely, as you’re saying, you need to be serious about it, you need to take your time to develop the product. This is the country of entrepreneurs, there is a lot of visa options, including tourism that allows you to come here for one or two weeks and discuss with industries, with us, Intelak or GIAS or even if your project accelerates. This is a place to do that without spending a lot of money and earning millions because opinions of others and stakeholders that are already in the industry are priceless. And then you go back and think about it. In the meantime you’ll discover the opportunities of investing your company in UAE. And you will find it very easy and probably this will be an amazing launch path for your project.
Interview hosted by Olga Fleming