4. 1
EXECUTIVE SUMMARY
Jetlines Canada Limited is a new company in the aviation industry that was founded in 2013. It is a federally
registered Canadian Corporation in the pre-revenue stage that aims to become Canada’s first ultra-low cost
carrier (ULCC) (MarketWired, 2016). It seeks to fly served and unserved routes across provinces in Canada
and provide low cost flights to consumers. The company is equipped with unique strengths like offering the
lowest rates inside Canada while maintaining a low operating cost. It is faced with weaknesses such as limited
brand loyalty and recognition and no supporting mobile device application to aid convenient reservations.
While it is surrounded by opportunities of a high potential market share development and benefits from the
success rate of low cost carrier airlines in North America. However, it is threatened by high government taxes
and economic fluctuation. This plan also expatiates on the PEST analysis and porter five forces surrounding
the company. Jetlines is faced with two major industry giants (Air Canada & WestJet) but it does not scare
its success because it is offering what none of the airlines offer. (Jetlines, 2016)
The company identify its target market labelled as Students, Leisure and Visiting Travelers ranging between
the ages of 20-55 years. These segments are considered a profitable group that will create a wide range of
users for Jetlines while the company ultimately attain a competitive advantage. Jetlines is set to be
positioned as the go-to airline for passengers within Canada who are price sensitive and would forego luxury
for convenience. The airline shall begin operation with 5 planes starting with the Boeing 737-300 series with
a projection of expansion to 11 aircrafts by the end of the second year of operation. Jetlines is offering flights
as low as $50 for one-way trips and $100 for round trips in Canada.
Jetlines is guided by its set marketing objectives which are mainly to achieve a revenue of $94 million after
the first year of operation, achieve a significant market share, and be the number one (1) low cost airline in
Canada in the five (5) years. The company plans to achieve its distribution channel through Direct and Indirect
sales. It plans to communicate and promote its services by employing the internet/social media. The
company’s overall operations shall be guided by its mission statement of being committed to providing ultra-
low cost flights within Canada and providing memorable travel experience to passengers (Jetlines, 2016).
Like every business, Jetlines may experience unforeseen challenges that may cause destruction of some sort.
This marketing plan contains an extensive contingency action that are considered efficient in the event of
any catastrophic incident such as Terrorism, Climate Change, and Fuel Insufficiency etc.
5. 2
SCENARIO:
A new Canadian company wants to take a new concept for
product or service and launch it in Canada
6. 3
1.0 COMPANY OVERVIEW
Jetlines Canada is a start-up airline aiming to become Canada’s first ultra-low cost carrier (ULCC).
The company is a federally registered Canadian Corporation in the pre-revenue stage with its
head office located in Richmond, British Columbia. Jetlines plans to operate scheduled point-to-
point all-jet air service nationally with primary bases at the Vancouver International Airport and
the Hamilton International Airport, with a secondary base at the Winnipeg International Airport
(YWG) (MarketWired, 2016). Jetlines is set to be acquired by Jet Metal Corp, a uranium explorer,
and developer with projects across North America. The company is listed on the TSX Venture
Exchange.
Jetlines will use the proven commercial aviation ULCC profitability model to attract new passengers
with low airfares and plans to retain these passengers by demonstrating a passion for service. The
proven ULCC model provides the capability for specifically designed airlines to reduce their costs in
a manner that provides scheduled airline service at base airfares averaging 40% below their nearest
competitor thus creating new passenger demand by market stimulation. The airline plans to
operate flights throughout Canada (Vancouver, Winnipeg, Hamilton, Quebec, Ontario, Nova Scotia,
Alberta, Manitoba, Ottawa, and Thunder Bay) and projects to expand to the United States, Mexico,
and the Caribbean markets. One of the company's objectives is to provide quality services at low
cost and serve destinations that have not been served by other airlines (Jetlines, 2016).
On that note, the company will offer improved services to air travelers by providing clients with
quality hospitality services and the ability to customize their preferred travel packages. The
company will provide advance booking services and consultation that will offer its clients options of
travel to routes at any season at the same price.
7. 4
2.0 SITUATIONAL ANALYSIS
2.1 SWOT
trengths
Cheapest rate inside Canada
Operating a fleet of 5 Boeing
Boeing 737 MAX7 has higher mileage and
requires less refueling.
Taxes are included in the price of the
ticket
Price competitiveness
Highly qualified and experienced leader
for proper instruction to the organization
Secondary routes – many unserved or
underserved routes in Canada
Low operational cost
Well-constructed and detailed (40)
aircraft routes structure model
No price differentiation of passenger
seats
Limited brand loyalty and brand
recognition
High baggage fee for check-in luggage
weighing over 23 Kg
No supporting mobile device application
for flight reservations.
Media presence (Website, Facebook,
Twitter, LinkedIn of company is bleak and
is not enough to educate customers and
increase consumer base.
Using secondary airports might lead to
customer service dissatisfaction of
traveling longer distances.
No cargo operations
8. 5
High potential for market share
development comprising of a profitable
group of students, Leisure and VFR
travelers.
High possibility for global expansion
With our top 2 competitors (Air Canada
and WestJet) offering high fares, Jetlines
can easily swoop in the void and cash-in
on the consumer base.
91% success rate of Ultra Cost Low
Carrier (ULCC) airline business within the
last 20 years
Since we are using secondary airports the
operation cost will be low
Highly aware customers
High government taxes
Global Economic changes can affect fuel
prices easily forcing Jetlines to increase
fare rates
Current global warming conditions may
lead to unforeseen climatic condition
which can affect air travel and its
punctuality in a big way
Currency and economic fluctuation may
lead to decrease of air travel requests due
to recession
Government permits might limit airspace
or traffic regularity
Competition brand WestJet is catching up
with cheaper flight plans and prices.
Chances of new competitors operating
before Jetlines
Issuing permits is a lengthy process,
therefore, it might delay operation
9. 6
2.2 PEST ANALYSIS
Political
Alternation in Legislation or Taxation policies can affect the business and nature of
effect cannot be predicted.
Mandatory heightened security levels at International airports may not be possible
at the airports of the smaller destinations the organization is targeting leading to
increased costs.
International tax rates vary as per the Global Monetary situation.
International travel restriction due to disease epidemic outbreak
Economic
Increase in fuel and energy prices can lead to increase in ticket fares
Economic state of participating countries can alter the common base policies
Income level of citizens will be a major deciding factor of amount of disposable
income for air travel
Currency changes can be erratic for business
Social
Recent terrorist and Hijack events in air travel might deter travelers from choosing
air travel
Canada is a diverse society Jetlines might face social restrictions
Major environmental awareness in present times makes it compulsory for businesses
to keep up with changing standards
Low brand recognition can lead to uncertainty thereby causing avoidance of the new
services that the company introduces
Psychological hindrance caused due to low brand recognition and name: low budget
prices and low brand name may limit customers from choosing the company keeping
in mind social image
10. 7
Technological
Airline industry is infamous for major Carbon-dioxide emissions in the atmosphere
Internet accessibility has made air travel booking easier
Low-cost fares limit extravagant technological services on board such as Wi-Fi
2.3 PORTER FIVE FORCES
1. Potential Entry of New Competitors: The entry threat of new competitors in the
airline industry in Canada is low as there are significantly high costs associated with
operating in the industry, machines need to be acquired, licensure from authorities, and
a trustworthy reputation needs to be set to serve potential customers (David, 2014). It
is a rigorous and lengthy process to acquire the necessary permit/license from the
appropriate government agency to start operation. Also, there is low switching cost
between brands as consumers prefer to choose well known and already established
brands compared to newly introduced brand (MarketLine, 2015). There is also the issue
of safety, consumers feel safer and more secure with companies that have been in
operation for a long period of time.
2. Substitute Services/Product: Airlines compete with other modes of transportation
as probable substitutes for air travel. There are several substitute for air travel,
consumers can decide to travel by car, bus, train, or boat to reach their final destination,
therefore the threat of substitutes is moderate in the industry. The cost of airline travel
is relatively higher compared to the other means of transportation, the benefit of air
travel is in the transportation time and comfort level received. Airplanes are the fastest
means of transportation, so there is a significant reduction in the transportation time for
consumers to their final destination compared to the cars, buses or trains. Consumers
appreciate the services and comfort received from travelling with airplanes.
11. 8
3. Bargaining Power of Consumers: The airline industry is made of two groups of
buyers; individuals and travel agencies. The bargaining power of buyers in the airline
industry is relatively low, although the buyers primarily influence the demand of that
drives the ticket prices up and down. Consumers in the airline industry do not have
legitimate bargaining power as they cannot choose to pay less for a flight, the only option
available to them is switching to another brand that offers a low price. The switching
cost is low because consumers basically choose a flight based on cost and destination.
4. Bargaining Power of Suppliers: Suppliers in the airline industry includes aircraft
manufacturers, jet fuel suppliers and airport. The top suppliers of aircraft are Boeing and
Airbus, their aircraft are significantly similar they only differ in terms of amenities.
Switching between manufacturers is unlikely as airline companies are usually in long
term loan contract with their suppliers, to switch the company will need to complete
payment on the aircraft. Companies get favorable credit terms when they don’t switch.
Also the cost of manufacturing an aircraft is expensive so airline companies are unlikely
to integrate forward and the aircraft suppliers do not have the capacity and knowledge
to operate an airline service so they are unlikely to integrate backward. Jet fuel suppliers
have the power to set price they want to charge for the fuel, and airports can choose to
set the fee for using their hub and runway. Therefore, with this bargaining power of
suppliers in the airline industry is high.
5. Rivalry among Existing Firms: All the companies in the airline industry ultimately
provide the same product/service which is transportation by air, the differentiation in
the service lies in the cost and quality of the product. Some companies place themselves
in the market as low-cost providers while others as luxury brands. The luxury brands are
known to provide better quality of service and amenities than the low-cost providers.
There are several airlines in Canada with the big firms being Air Canada and WestJet, the
rivalry in this industry is intense as consumers have a choice to pick which ever they like.
With new companies planning to offer ultra-low cost fares, the big firms might want to
12. 9
provide a service similar that in an attempt to drive ultra-low cost carriers (ULCC) out of
the market. Overall the competitive rivalry in the airline industry is high.
3.0 PRESENT MARKET OVERVIEW
The airline industry is dominated by two major airlines (Air Canada and WestJet) that carry out
intercontinental flights. These airlines have dominance in both classes of passengers since they
offer both low and high class services through a strong brand recognition. It is a highly
competitive market with every player looking for opportunities to impress clients by offering
tailor made services to attract customers. The industry continues to evolve has it embraces
information and technology with major bookings being made online and services moving from
the traditional travel agency models. On that note, any entrant into the market will have to be
adapted at making continuous improvements and innovations to survive in this industry where
many players have failed (Jetlines, 2016).
The target market for the airline will be air travelers who prefer low cost flight fares with
standard quality. These are the air travelers who are flying within Canada to destinations which
are not frequently visited by other airlines. Low fares and new destinations will attract
customers who are discouraged from flying because of high airfares and the lack of jet service
to some Canadian cities. Base airfares are scheduled to be 30 to 40 percent lower than those
the document said offered by Air Canada and WestJet (Jetlines, 2016).
13. 10
3.1 Segmentation
Our identified market segments are based on demographic, psychographic, and behavioral
segmentations. We believe using these three techniques together will simply give a clear
market segmentation for the airline industry market. These segments are:
Segment 1: Students
Age: 20-28
Undergraduates or Graduate students in college or university seeking low cost air
travel
Would prefer low cost to luxury flights
Minimal disposable income
Can fulfill their self-values through low cost travel us a clear and concise picture
Segment 2: Leisure travelers
Age: 20-50 years
Willing to spend money for enjoyment but not on flight fares
Minimum baggage
Typically seeking low cost flight during seasons to save money
Would prefer basic service to luxury
Seeking to design their travel package
Segment 3: Visiting travelers
Young families consisting of parents (30+) and children (0-12+) years
People visiting friends and relatives (20-55) years
Low income people between (25-45) years
Would prefer low cost flights to luxury
Prefer entertainment for their children
Budget conscious
14. 11
3.2 Target Market
Jetlines’ target market is focused on the
segment labelled “Students, Leisure,
and Visiting travelers”. These focused
segments are considered a profitable group that will build Jetlines a wide range of users and
establish a competitive advantage by improving air travel service for customers through
customer, locational and service excellence. Jetlines will not be targeting corporate and
business travelers because of its low flight frequency, limited routes being served, lack of
airport and amenities will not appeal and satisfy the needs of the business sector, also this
will result in direct competition with the top airline brands in the industry.
Positioning
The product is positioned in the mind for passengers who are price-sensitive and are willing
to sacrifice product amenities for a lower flight cost. Individuals who are on a budget but
wish to travel within Canada.
4.0 PRODUCT DESCRIPTION
4.1 Service/ Product offering
Service Offering
Jetlines offers a unique flight fare that is not offered by competitors ranging between and
above $50 (one-way) and $100 (round) trips to travelers in Canada. This offering is the basic
and lowest package to specific destinations where flight fares will be determined by
distance. Customers are able to customize their preferred travel package to meet their
needs and still experience standard quality service at no additional/hidden cost. Also,
additional cost shall be communicated to customers if extra service(s) is required.
15. 12
Flight tickets allow each passenger to possess a carry-on bag or suitcase that do not exceed
the stipulated weight on the ticket. Additional cost shall be made known to the passenger
and received before take-off.
Product
Onboard meals and drinks shall be on a personal preference basis depending on each
passenger’s choice travel package. Jetlines offer various travel packages that makes onboard
meals optional for travelers at all seasons. However, every ticket of any travel package
includes the provision of fresh drinking water for passengers.
4.2 CHANNEL STRATEGY
Customer
Indirect sales
Online
Authorised
Retailers e.g.
Expedia
Walk-in Travel
Agencies/
Advisors
Direct Sale
1- Jetlines
website
2- Company
Helpline
16. 13
5.0 MARKETING OBJECTIVES
To achieve a net income of $94 million after the first year of operation
To achieve a significant market share in the first year of operation
To be the number 1 low-cost airline in Canada in the next five years
To build brand recognition and awareness in Canada
To build strategic partnerships and alliances with other Canadian institutions such as Hotels,
car transportation, banks, Colleges and Universities
To expand to North America and the Caribbean in 2021
Affordable: Canada Jetlines aims to be a low-cost airline in British Columbia and the unserved
routes that they are planning to serve. For example, in 2013 one of the company investors stated
that a flight from Vancouver to Prince George would cost CA$ 72, compare to that of Air Canada
flight at CA$ 144 (The Huffington Post B.C., 2013). Additionally, the post states that at an average
fare cost currently from Vancouver to Prince Rupert costs CA$ 232, however Jetlines could tackle
the same route for CAN $93.
Operate new Boeings: David Solloway President of Canada Jetlines Ltd on 29th of Dec 2014
told that will start with Boeing 737 the 300 series by expanding to 8 crafts in 2016, and then 16
aircrafts within 32 months. He further said that his team order 21 737-MAX aircraft for their
expansion in 2021 (Bunting, 2014).
Comfort on Board: Provide 30-inch seat pitch thus, creating more integrated Customer
experience by providing good service at affordable prices (Jetlines, 2016).
Attract customers: According to, (MarketWired, 2016) “Jetlines will use the proven commercial
aviation ULCC profitability model to attract new passengers with low airfares and plans to retain
these passengers by demonstrating a passion for service”.
Build Brand awareness: Besides its official Canada Jetlines website, the company is also taking
full advantage of the internet, Facebook, Twitter, LinkedIn, and local news channels to increase
it is brand awareness.
17. 14
Increase market shares: Canada Jetlines ultimate aim is to provide low-cost fares, which will
result in customer attraction and thus increase sale and market shares.
To Serve unserved routes (enter new market locally and internationally): (Jang, 2014)
explained that Canada Jetlines LTD is scheming secondary routes that are not being served or
served with inadequate service by Air Canada and WestJet in Canada and neighboring countries.
As it is demonstrated by Canada Jetlines website that in the next 8 years Canada Jetlines will be
serving the following routes.
CANADA
Alberta
Edmonton (Edmonton
International Airport)
Fort McMurray (Fort McMurray
International Airport)
British Columbia
Vancouver (Vancouver
International Airport)
Victoria (Victoria International
Airport)
Abbotsford (Abbotsford
International Airport)
Penticton (Penticton Regional
Airport)
Prince Rupert (Prince Rupert
Airport)
Prince George (Prince George
Airport)
Fort St. John (Fort St. John
Airport)
Manitoba
Quebec
Montreal (Montréal–Pierre
Elliott Trudeau International
Airport)
New Brunswick
Moncton (Greater Moncton
International Airport)
Nova Scotia
Halifax (Halifax Stanfield
International Airport)
Newfoundland and Labrador
St. John's (St. John's
International Airport)
Stephenville (Stephenville
International Airport)
Saskatchewan
18. 15
Winnipeg (Winnipeg James
Armstrong Richardson
International Airport)
Flin Flon (Flin Flon Airport)
Ontario
Hamilton (John C. Munro
Hamilton International Airport)
Ottawa (Ottawa Macdonald–
Cartier International Airport)
Thunder Bay (Thunder Bay
International Airport)
Saskatoon (Saskatoon John G.
Diefenbaker International
Airport)
Regina (Regina International
Airport)
USA
Alaska
Anchorage (Ted Stevens
Anchorage International Airport)
Hawaii
Honolulu (Honolulu
International Airport)
Kahului (Kahului Airport)
California
Oakland (Oakland International
Airport)
San Diego (San Diego
International Airport)
Ontario (Ontario International
Airport)
Nevada
Paradise, Nevada (McCarran
International Airport)
Arizona
Phoenix (Phoenix–Mesa
Gateway Airport)
Maryland
Baltimore-Washington
(Baltimore–Washington
International Airport)
Florida
Orlando (Orlando International
Airport)
Miami-Dade County (Miami
International Airport)
Pinellas County (St. Pete–
Clearwater International Airport)
19. 16
Reno (Reno–Tahoe International
Airport)
MEXICO JAMAICA
Baja California
Cabo San Lucas (Cabo San Lucas
International Airport)
St. James
Montego Bay (Sangster
International Airport)
BAHAMAS
New Providence
Nassau (Lynden Pindling International Airport)
Table 2: Target Destinations (and the corresponding airports) (Canada Jetlines, 2016).
6.0 MISSION STATEMENT
Jetlines Canada is committed to providing Ultra Low-Cost flights within Canada and providing
memorable travel experience to passengers (Jetlines, 2016).
7.0 MARKETING MIX
7.1 PRODUCT
With the frustration of air travel being relatively costlier than usual (Bloom, 2015), and
where travelers are continuously seeking low fare flights with standard quality service
(Kugel, 2014). Jetlines is offering travelers in Canada with low fare cost with improved
passenger experience without hidden or additional cost and quality services at all seasons.
PLANES
Jetlines will start operation with 5 planes starting with the Boeing 737 with maximum
of 149 passenger seats
The Boeing 737 shall be operated for longer distance flights
Boeing 737 has advanced environmental technology with low emission
Low operating cost in terms of fuel efficiency and lower maintenance cost
A compatible fuselage, allowing a pleasant experience by providing more legroom
and passenger seating
Ports to recharge portable devices
20. 17
Portable back screens for entertainment
On-board meals (optional)
ADDITIONAL OFFERING
By utilizing modern technology, Jetlines is also offering its prospective customers a personalized
experience on the company’s website which include:
Allowing customers to choose their preferred seats by viewing the plane on a 2D
image
Availing customers, the information on tourism attractions in every city of each flight
destination
Alliance with hotels to aid customers who wish to make reservations through the
airline’s goodwill
Alliance with a car rental company to enable customers to have access to cars at their
destinations if needed
The combination of these offerings and the ultra-low cost fare services sets Jetlines apart in
the competitive airline industry.
7.2 PRICE
By having lower operating cost and ability to provide quality travel service, the company has
a competitive edge in the market because it is offering what is currently not been provided
by any airline in Canada. This competitive advantage stems from the customer’s ability to
customize their travel package and only paying for what they need and want.
Jetlines is offering flights as low as $50 for one-way trips and $100 on round trips across
provinces in Canada. These flexible low flight fares shall be made available at every season
(i.e. peak and off peak periods) to customers who book in advance. In addition to these ultra-
low flight fares, Jetlines will not include hidden or additional charges to services attached to
every flight rather it will provide customers the options and knowledge of the actual cost of
any extra service required.
21. 18
7.3 PLACE
We are utilizing two distribution means that will be most suitable for our target segments of
students, Leisure and Visiting travelers. There is also the option to purchase tickets through
our call center, a medium meant to manage complaints and handle customer enquiry.
Indirect Retailers (Expedia, RedTag, Trip Advisor and Kayak): These indirect retailers
will be the primary method for reaching new customers. These retailers are
established in North America and are the primary means of finding the best flight
deals for travelers.
Direct Sales: Direct customer contact through the Jetlines official website and the
call center are the preferred methods to communicate specific price breakdown and
flight information, however, during the initial stages while Jetlines is gaining
customer loyalty and brand recognition, the direct sales approach will not be as
profitable as projected because customers are still learning about the service.
7.4 PROMOTION
Internet/Social Media Presence: We believe that the most prominent and efficient
method of communication to reach our target market is the internet. It is essential
for Jetlines to have a strong internet presence and communication strategy utilizing
the likes of Facebook, Twitter and Instagram.
Strategic Alliance: As Jetlines gains more grounds in Canada, it will form alliances
with other organizations that are in direct contact with its target market in order to
execute the communication strategy. For example:
Universities/Colleges: Jetlines will engage in communication activities on university
and college campuses in order to increase awareness of the service. Students are
often making travel arrangements and are looking for inexpensive flights.
Student Graduation Trip Companies (S-Trip/Contiki): This is to work with student
travel companies and provide them with flight information and packages for trips.
This will encourage students to book with Jetlines in the future when making travel
plans.
22. 19
Credit Card Companies: Similar to other companies in the North American market,
Jetlines will look to establish a mutually beneficial relationship with credit card
companies (MasterCard and Visa). These companies are potential alliances because
they are reportedly widely used by our target demographic across Canada (Canadian
Bankers Association, 2015).
Travel Agents/Advisors: Travel Agents are of minor importance to our target
demographics of student travelers (generation Y and millennial) because they rely
more on the internet for flight bookings while our target demographic of Visiting and
Leisure Travelers (Generation X) are less technology savvy and may still be traditional
by preferring to patronize travel agents. Travel Agents are relevant to our strategy
because they advise and seek accurate flight information and packages for their
clients which may aid Jetlines in gaining more customers (Olmsted, 2012).
7.5 MARKETING COMMUNICATION STRATEGY
Jetlines plans to reach its target demographics mainly through the internet and by utilizing
other media our target demographics are exposed to such as Television and Magazines
through Advertising. By this, Jetlines shall be able to build its image and brand recognition
by providing its target audience with messages centered upon its service offerings and
customer benefits.
Jetlines shall utilize the company’s tagline “Fly your way’ by making it appeal to our target
market as it resonates in their minds and reminds them of the value and benefits of our
service offerings. All communications to our target demographics shall bear this tagline.
We will communicate with our target demographics all year round on the internet (Social
Media and Company’s website) during the first year and seasonally (summer and Christmas
holidays) on television and magazines in the first 5 years. It shall also continue to
communicate its consumer benefits on social media in those seasons in the first 5 years. This
strategy is adopted based on the knowledge that majority of our target audiences are
technology savvy and more inclined to the media than any other forms of communication
(Young Entrepreneur Council, 2015).
23. 20
7.6 COMMUNICATION MIX
Internet (Facebook, Twitter and Instagram): This medium will be most utilized because it is
the most valuable element and the cost effective way to reach our target demographics at
different time and place. Jetlines plan to build its brand image through its online presence
by consistently keeping its target audience informed about its offerings and customer
benefits. This medium shall also provide Jetlines with some consumer intelligence strategy
by monitoring consumer behavior which would give room for refined segmentation.
Advertising (Television and Magazine): This medium will be utilized because it is the most
prominent element of the communication mix to reach a large target audience at a given
time. It is expensive and occurs as a one-way communication but it guarantees wide reach.
Jetlines is adopting these communication tool mix because our target demographics being
students, leisure and visiting travelers are widely exposed and influenced by messages
spread online (Social Media) and traditional media (television and magazines) (Hawley,
2014). Study has it that students being Millennials have an increasing buying power in
today’s economy, and are not swayed by traditional advertising rather by messages that
speaks convenience and offers rare value (Young Entrepreneur Council, 2015).
24. 21
8.0 FINANCIAL ANALYSIS
8.1 Market Analysis
The airline industry in Canada as of 2014 grew 9% to worth an estimated $25.2 billion
(Euromonitor International, 2015). Canada's airline industry demonstrated strong growth
across the 2010-2014 period in terms of value due to a combination of rising air fares and
relatively strong volume growth, although volume growth was weaker. Forecasts for the
2014-2019 period suggest a marginal acceleration in passenger and revenue growth, with
airfare increases remaining subdued in response to low oil prices (MarketLine, 2015). The
market is characterized as an oligopoly dominated by leading companies like Air Canada,
WestJet.
The Canadian airlines industry grew by 6% in 2014 to reach a volume of 64.7 million
passengers, the domestic segment was the industry's largest with a total of 39.0m
passengers carried, equivalent to 60.2% of the industry's overall volume. The international
segment was responsible for 25.8m passengers in 2014, equating to 39.8% of the industry's
aggregate volume (MarketLine, 2015). The net impact of tourism volume growth saw airlines
register a 7% increase in the number of passengers carried in 2014. Growth was most
pronounced in low cost carriers, which posted a 15% rise in passengers carried (Euromonitor
International, 2015). In Canada, ULCC market share is estimated at 10 million passenger trips
per year (Jetline, 2016).
25. 22
8.2 Sales Forecast
Jetline airlines is planning on starting with 5 airplanes, Boeing 737-300 with a maximum
passenger seat of 149. We plan to provide an average 40% lower airfares than our major
competitor (Air Canada and WestJet also charging $20 ancillary revenue per passenger,
thereby providing flights at least 30% lower than normal cost. It currently cost $242 for a
one-way base fare on the Vancouver-Prince Rupert leg on Air Canada. Jetlines is aiming to
charge as little as $87 one-way, a 64-per-cent discount, the base fare for going one-way from
Vancouver to Regina cost $260 on WestJet, Jetlines’ ticket will cost as little as $108, a 58%
discount (Jang, 2014). Everyday airfare for Jetlines from Vancouver will range from $50 to
$155 dollar. Based on the company’s first year forecast it is expected to generate about $94
million (Jetlines, 2016).
8.3 Market Share Forecast
The airline industry has an estimated 64 million Canadian air passenger for domestic, trans-
border (USA), Mexico and Caribbean flight, the domestic segment has the largest percentage
of this air passengers. In Canada, ULCC market share is estimated at 10 million passenger
trips per year (based on 15% of existing Canadian market) which is currently unserved. With
the demand for a low carrier cost airline in Canada and the estimated passenger trip per
year of ULCC in the airline industry, we can capture a large portion of this market within the
first year of operation.
9.0 CONTIGENCY PLAN
Jetlines’ operations can be seriously damaged by
events that the company cannot handle and this will
result in a devastating reputation change for the
company or in closing its operations. Jetlines has
designed a contingency plan that would help to
prevent or confront these situations. The events
could be of minor or major risk to their operations.
26. 23
The minor risks could be as follows:
1. In event of a failed communication strategy, a detailed market perception research needs
to be conducted.
2. Not having enough space to land or take off: Provide customers with incentives such as free
meal, paying for their ride from the airport to home
The major risks could be as follows:
1. Unexpected climate change: The mitigation plan for the situation would be to forecast the
weather and if the weather changes drastically, emergency landing in the nearest airport
needs to be executed.
2. Airplane might get hijacked: To provide secret and hidden emergency buttons available for
the personnel.
3. Profits remain below the break-even point: Reduction of operation costs, cutting out
unpopular flights while retaining the popular ones will allow the company to reduce the fuel
consumption and recover its expenses.
4. Not having the licenses and permits issued by the government to operate in Canada. The
company can purchase seats from another airline licensed under the Canadian
Transportation Agency (CTA) then reselling to the public.
The safety and comfort of our customers would be the priority of our company. The mitigation of
this contingency plan has the purpose of diminishing and preventing future catastrophic events
(Jetlines, 2016).
27. 24
REFERENCES
Bloom, E. (2015, September 14). Why air travel makes us uniquely crazy. The Atlantic. Retrieved
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30. • Founded in 2013
• Start-up airline aiming to become Canada’s first ultra-low cost carrier
• Head office: Richmond, British Columbia
• Primary bases: Vancouver and Hamilton while: Secondary Winnipeg
• Future Plans: Operation of flights throughout Canada
• Advance booking services: any season-same price
31. Strengths
Weaknesses
O T
Opportunities
• High government taxes
• Global fuel price
changes
• Government permits
• New competitors
Threats
S W
• Potential market share
development
• Global expansion
possibility
• 91% success rate of
ULCC airline business
• Low brand loyalty &
recognition
• High baggage fee
• No mobile device app
• Cheapest ticket rate
• Efficient machinery
• Low operational cost
• No price and class
differentiation of
seats
32. P E
S T
• Alternation in Legislation/Taxation
policies
• Mandatory heightened security levels
• International tax rates vary as per the
Global Monetary situation
• Increase in fuel and energy prices
• Economic state of participating
countries
• Income level of citizens ⋉ amount of
disposable income
• Recent terrorist and Hijack events
• Major environmental awareness
• Low brand recognition
• Carbon-dioxide emissions
• Internet accessibility: air travel booking
easier
• Low cost fares limit on board services
33. • Airline industry is dominated by two major airlines
Air Canada and WestJet
• Highly competitive market
• Embraces information and technology
• Significant growth in the industry
34. Students
• Age: 20-28
• Undergraduates or graduate students
• Minimal disposable income
Visiting Travelers
• Age: parents (30+) and children (0-12+)
• Young families visiting friends and relatives
• Low income individuals
Leisure Travelers
• Age: parents (30+) and children (0-12+)
• Young families visiting friends and relatives
• Low income individuals
35. Jetlines target market are travelers who prefer low cost flight fares with a standard
quality
Low fares and new destinations will attract customers
Base fares are scheduled to be 30-40% lower than Air Canada and Westjet
38. • Low-fare Airline in Canada in the next 5 years#1
• $94 million, after the first year of operationRevenue
• To North America and Caribbean by 2021Expand
•To own 30% Market shares by 2021Market Shares
• By 2021, take full advantage of internet and social
Media
Build Brand awareness
• 30- inch seat pitch with 149 seats per craftComfort on Board
• Serve unserved or under-served routes by 2021Serve
39.
40. “Jetlines Canada is committed to providing Ultra Low-Cost flights within
Canada and providing memorable travel experience to passengers”
(Jetlines, 2016).
41. Product
- Plane - Boeing 737 MAX 7
- On-board meals
- 2D imagery of plane to choose seats
Price
- As low as $50 for one way
- $100 CAN for round trip
e.g.Vancouver International - Airport-
Prince Rupert Airport
Place
- Indirect Retailers (Expedia, RedTag,
TripAdvisor and Kayak)
- Direct Sales (Company’s official
website and Call center)
4P’s Promotion
- Internet and social Media Presence
- Strategic Alliances
42. • Intensively reach target demographics through the internet and social media
• Continuously reach target demographics at all seasons
• Company’s Tagline “Fly your way”
43. • Internet/Social Media (Facebook, Twitter,
Instagram and Company’s website)
• Advertising (Television and Magazines)
Mix
44. Market Analysis
• Airline Industry In Canada - $25.2 Billion In 2014
• Strong Growth Across 2010 – 2014 Period
• Estimated $32.1 Billion By 2019
• 64.7 Million Air Passengers In 2014; 60.2% DOMESTIC, 39.8% International
• Oligopolistic Competition
45. Revenue Forecast
• $94.4 million in the first year of operation
• Over $600 million in 5 years
Market Share
• ULCC market share – 10 million passenger trips per year
• 11% in first year
• 30% in 5 years
