Standoutfromthe crowds


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Airline Start up is hard issue for investors, today airline try to survive in this high competitive industry, this presenting address new tools that guide and put airline in the right way

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Standoutfromthe crowds

  1. 1. Introduced By: Mohammed Salem Awad Standout From the Crowds Airline Startup
  2. 2. INTRODUCTION <ul><li>Airline Startup: </li></ul><ul><li>Hard issue governed by Aircraft Manufactures and Consultant Companies. </li></ul><ul><li>Purpose of this paper to introduce an innovative concepts used in Airline that facilities the Startup Airlines </li></ul>
  3. 3. INTRODUCTION <ul><li>We will enhance Airline Startup By: </li></ul><ul><li>Allocating Right Capacity initially point to point Model. </li></ul><ul><li>Developing Competitive Fare Strategy </li></ul><ul><li>Restructure the network to involve a multi stops operation which will to maximize the profits. </li></ul><ul><li>At the ends Investors looking for a profitable company. </li></ul>
  4. 4. Airline Startup <ul><li>One of the major concern of the investors is how to ensure that they invest in a profitable company. </li></ul><ul><li>Build on a solid foundation study and getting a tangible results </li></ul>It depends on what strategy should be implemented
  5. 5. Airline Startup RIGHT CAPACITY ( Right Aircraft ) f = Size of Traffic Passengers – Point to point Applied Market Fare Network Structure – Stage Length Cost of ASK or ATK
  6. 6. Airline Startup RIGHT CAPACITY ( Right Aircraft ) <ul><li>U Curve Techniques </li></ul><ul><li>Cost of Service - Cost of seat </li></ul><ul><li>Cost Of loss Oppurantity – Cost Of losing Revenue Due to unavailability of seat </li></ul><ul><li>The Final Curve take Shape ( U ) </li></ul><ul><li>The Best Decision represents by the lowest cost in the curve </li></ul>
  7. 7. Airline Startup Optimum Solution Curve if the thump define by 32 Characters And the Eye define by 510 characters Then what are the main factors that characterize the airline ?
  8. 8. Airline Startup Optimum Solution Curve Optimum Solution Curve of an Airline Can characterize by Market Demand Applied Fare Stage Length It can represents by Two factors 1- Capacity ( seat ) 2- Cost per ATK
  9. 9. Proposed Network Structure (Point To Point)
  10. 10. Kuwait Airport ( Hub ) Input : 10 % Market Demand Applied Market Fare Distance Between Cities
  11. 11. Kuwait Airport ( hub ) Input : Size of Market: “Kuwait airport” 10 % of total Market. Market Fare Applied Proposed stage length While cost is used as step function
  12. 12. Kuwait Airport ( Hub ) Outbound Developing Optimum Solution Curve : Input Data Pax Fare Distance
  13. 13. Kuwait Airport ( Hub ) Developing Optimum Solution Curve : Using Cost per ATK as step function i.e: 0.1 , 0.2, 0.3 …..0.8 And plotting the corresponding optimum capacities, then add trend line to reflect the optimum solution curve Result : 1- 0.28 cost tend to low cost Model ( 220 seat ) 2- at 0.4 ( global value ) it will reflects greater capacity
  14. 14. Developing Competitive Fare Strategy ( at 0.4 ) Prepared By: Mohammed Salem Awad
  15. 15. Effects of Changing Fares On Capacity Prepared By: Mohammed Salem Awad
  16. 16. Effects of Changing Fare On Capacity Airlines can be react on the fare of low cost carries by study the previous graph, i.e by considering a lower unit cost of ATK, and adjusted Aircraft configuration/ seats to meet the right capacity needed. Also the previous graph indicates the high yield sectors.
  17. 17. Redefining Proposed Network Redefining the network by implementing the ideas of combining many sector to maximums the profits And that can be done 1- One Stop Operation 2- Two Stops Operation 3- Three Stops Operation While these routes involves in the analysis should be omitted from point to point analysis
  18. 18. Max Profits in Multi stops operation Whence we decide the type of aircraft, it will characterize by its cost per ATK and seat capacity, While the demand of each sector, implemented Market Fare, and Distance between sectors are used as input
  19. 19. Max Profits in Multi stops operation Solver : the objective of solver program is 1- Maximize profits 2- Minimize cost or Errors ( U curve ) 3- Develop a Budgeting in Finance
  20. 20. Max Profits in Multi stops operation Using Solver
  21. 21. Restructure The Network <ul><li>Repeat the previous scenario by different types of aircraft with different capacities and cost </li></ul><ul><li>Those who reflect a higher profits should be selected </li></ul><ul><li>Routes which already involve in a multistops operations should be omitted. </li></ul><ul><li>Analysis should be carried on inbound and outbound demands. </li></ul><ul><li>Finally we get a profitable Network of proposed airline. </li></ul>
  22. 22. Summary <ul><li>Most airlines relay on Aircraft Manufactures, while this paper shows clearly that airlines can develop their wards, especially Aircraft Evaluation using cost as step function. </li></ul><ul><li>The program give a clear decision about two costs which are cost of service offers and cost of losing opportunity. And indicate when the cost of losing opportunity to tradeoff. </li></ul><ul><li>One main issue, that discuss is the effects of seat allotments. as the right percentage of seat distribution in Aircraft , this improve the profits of the sectors. </li></ul><ul><li>Finally the program can be used as tool to define which the right aircraft to operate. </li></ul>
  23. 23. Contact Further Information: Mohammed Salem Awad : Tel: 00967 734777518 Email: