Covering the case synopsis, issues, challenges, problems, inferences, and recommendations for the case study: Linear Air- creating the air taxi industry, published by Harvard Business School.

1. Linear Air:
Creating the Air Taxi Industry
IAE-PPT2
Group: Suchi Mukherjee

2. 2
4
5
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3
INDEX
CASE SYNOPSIS
ISSUES/CHALLENGES/PROBLEMS
INFERENCES
Recommendations

3. 3
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CASE SYNOPSIS
1. Forming the Air Taxi Industry
• VLJs
• Substitutes
2. Industrial Risk
3. Launching Linear Air
4. Operations
5. Business model and Growth Plans
2
1

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ISSUES/CHALLENGES/PROBLEMS
• Customer segments
• How can it be made more attractive
• Manufacturing Problems
• Infrastructure problems
• Regulatory issues
• Business Model Decisions
• Growth Plan
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3

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INFERENCES
3
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Aircraft Type
Price
(2007)
Variable
Cost
Annual
Fixed
Cost
Max
Cruise
Speed
Max
Altitude
Cessna
208
Caravan
Single
Engine
Turboprop
$1.7m $3.40 $97.7 186 25
Eclipse
500
VLJ $1.6m $2.29 $89.4 370 41
Exhibit 2: Comparison of Aircraft Operating Characteristics
Better as compared to the main competitor

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INFERENCES
3
4
Exhibit 5: Comparison of a round trip (distance of
628 nautical miles)
Linear Air
Commercial
Airline
Prepaid
Jet Card
Charter Driving
Total One-Way
Trip (hrs)
3.10 6.36 2.75 2.75 12
$/hr or $/mile $1,750 - $5,000 $4,000 $0.4
Total cost of
round trip
$7,350
$1000-
$1700
$17,500
$14,00
0
$640
Better as compared to the other alternatives available for travelling

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2
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INFERENCES
3
4
Exhibit 7: Linear Air Financial Performance 2004-2006
2004* 2005 2006
Revenue
($ million)
0.2 1.2 2.3
* Four months of operation only
An increase in the revenue is seen over the years

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INFERENCES
3
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Exhibit 7: Linear Air Pro Forma Financials
Assumptions 2008 2009 2010 2011 2012
Number of Eclipse aircrafts 8 26 62 132 237
Projections ($ million) 2008 2009 2010 2011 2012
Revenue 13.4 43.7 104.2 221.8 398.2
Net income before taxes (1.2) (0.0) 3.3 14.5 30.3
They expect to reach BREAKEVEN by 2009

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Recommendations
1. Expansion: In Northeast or California
region
2. Business Model Decision: Stick to the same
and shift after 3-5 years
3. Competition: Creating a New Category
4. Segments to target

10. THANK YOU!
Cherry Malhotra
Shweta Pareek
Sidharth Sharma
Shivam Shrivas
Vishal Agarwal