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Business plan presentation

AirAhead Airlines is proposing a new low-cost airline to operate in the Vancouver, Canada market. The business plan outlines AirAhead's service offering of short-haul regional flights using Bombardier Q400 aircraft. It discusses marketing strategies, competitors, risks, operating objectives to establish itself in the short-haul market, and financial needs including an initial capital requirement of $50 million. Implementation will focus on centralized operations and marketing primarily to the leisure market to achieve market presence in the niche regional travel segment.

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AirAhead Airlines Business Plan Seneca College AVM121NAA Major Assignment Professor Ryan Carter Provided by Group #3 HAMED- YAOMING- KEVIN- PATRICK- SAFWAN- CHRISTIAN 12/4/2015 1B.P.
Table of content • Executive Summary • Service Offering • Marketing and Sales Strategies • Incumbent Airlines in B.C • Threats & Risks • Operating Strategy Objective • Financial Strategy Objective • SWOT Analysis • Implementation Schedule • Capital Structure start-up Capital Needs • Aircraft Financing • References 12/4/2015Footer Text 2
Executive Summary AirAhead Airlines Inc. is a new customer airline in its early stages which is being organized to take advantage of specific gaps in the short haul domestic travel market. This gap is currently in Vancouver Canada. The gap availability of low cost service in and out of Vancouver with the demand for passenger travel on selected routs. 12/4/2015Footer Text 3
Service Offering  Overall Concept: • These days low fares have become an expectation, not a promise. Also, the revenues available from short hauls are comparatively higher than long hauls on a per-passenger- mile basis.  Vision: • Our vision is to establish itself as a niche player in the short-haul market of travel and to offer a reliable service at the fraction of the cost out of CYVR with service to a few small regional based airports. 12/4/2015Footer Text 4
Service Offering  Mission: • AirAhead Airlines Inc. has a mission to provide safe, efficient, low-cost consumer air travel service. Our service will emphasize safety as its highest priority. We will operate the newest and best maintained aircraft available. We will never skimp on maintenance in any fashion whatsoever. We will strive to operate our flights on time. We will provide friendly and courteous "no frill" service with technological conveniences. 12/4/2015Footer Text 5
Our Fleet: Bombardier Q400 12/4/2015Footer Text 6 • The Q400 burns 30% less fuel • 30% lower emissions on short-haul routes • One of the quietest aircraft flying today (Its advanced propulsion system leads to significantly reduced community noise pollution, making it ideal for city-center airports)
Marketing and Sales Strategies • Service (Product Offering) • Place (sales and distribution) • Price (Fare structure ) • Promotion (advertising)
Incumbent Airlines in B.C 12/4/2015Footer Text 8 Has signed a definitive purchase agreement with The Boeing Company to acquire up to twenty-one (21) Boeing 737 MAX aircraft for delivery commencing in 2021. Focused on providing customized lift for commercial users “Customer Service Company of the Year” awards from local Chambers of Commerce
Threats & Risks • Strong Competitors & big companies • Safety (difficulty securing new gates at airports) • Terrorism • Accidents • Fuel Cost hikes • Rising airports fees 12/4/2015Footer Text 9
Operating Strategy Objective • Establish itself as a role player in short –haul market of business and tourist travel in North America • Use a basic organizational structure • Focus on a small commercial type of aircraft and a point-to-point services in Vancouver and Alberta • Exploiting Tourism Trends.
Financial Strategy Objective • Our strategy remains a "seed" to "bridge" to "IPO" progression. • Funding needs of AirAhead Airline in order to start is $50 Million US. • Begin operating with 2 Bombardier Q-400 80- passenger regional plane, with very low load factors. • Aircrafts will receive maximum utilization, up to five or six segments per day depends on the destinations.
Strengths Weaknesses  Firm operating strategy(Focuses on Point-Point trips)  New and Modern Fleet  Low price and reliable offer  Free Food , Beverages, and Internet on board  Strong and aggressive management system  Low operating costs  Multi skilled staffs and productive pilots and ground crew  Free online check-in and user friendly website • New Company in Aviation Industry • Doesn’t serve Long-Haul or International Flights • Just one type of airplane • Limited human resources • Market share is less due to increasing competition • Financial issues • Space to carry freight and cargo is limited • Scrutiny of potential employees based on personality before skill could be dangerous • Limited flights = less money (for the starting phase) Opportunities Threats  Bridging the Business-Economy Gap  Low Fare Pricing  Offer Travel Tour Package  Off-season development  More destinations and also tapping global customers  Maximize aircraft utilization  Strong Competitors & big companies  Safety (difficulty securing new gates at airports)  Fuel Cost hikes  Rising airports fees  Accidents  Terrorist attacks 12/4/2015AirAhead Airline 12
Implementation Schedule 12/4/2015Footer Text 13
AirAhead Airlines Inc.'s market presence will be achieved by relying on the strategy of identifying and serving a specialized niche market well. 12/4/2015Footer Text 14 • Media executions will utilize local media. • Air operations will be centralized and cost effective. • Reservations will also be centralized and cost effective. • Marketing will be media generated to the leisure market. • Business plan is driven by the new network, fleet, and alignment of commercial and operational functions. • Create a five-year operating profitability and profit margin forecast. • Sensitivity analysis is executed for the most important drivers in the model, such as fleet size and load factor. • Identify key revenue and cost drivers.
Implementation objectives for the airport operation and development activities are set out below for the next five years. Airport Operations • Ensure compliance with Federal and other regulations • Ensure facilities are maintained to a proper code • Ensure preventative and routine maintenance of the Airport • Improve existing facilities FBO (Fixed Base Operator) Operations • Improve existing facility • Ensure compliance with regulations • Maintain quality control of product Airport Development • Promote good tenant relations • Encourage business development • Plan for future development of the Airport 12/4/2015Footer Text 15
Capital Structure start-up Capital Needs Indirect Costs 2016-2017 Advertising Expenses $3 000 000 Internet & Technology $50 000 Rent $150 000 Other $220 000 Total $3 420 000 12/4/2015Footer Text 16 Cost of 2 Aircraft - $30 000 000 Aircraft Lease - $2 000 300 Advertising Expenses - $3 000 000 Cash Balance $14 000 700 Aircraft Insurance $125 000 000 annually Aircraft Leasing $185 000 monthly
Seed Capital Sources (Potential) Real Ventures • Leading source of seed stage capital in Canada • Established in 2007 • 150 company investment 500 Start-ups • Founded by Facebook and Dave McClure • Offers up to $250 000 12/4/2015Footer Text 17
Aircraft Financing Lift Capital Corporation • Canadian owned and operated • Finances new and used fixed and rotary wing aircraft Commercial Leasing Group Inc. • Leasing up to $250 000 • Single Engine, Twin Engine, Sale – Leaseback, Agricultural, Chartered, Flight Schools, Individuals or Corporations. Travelers Aircraft Finance • Provide financing to the General Aviation Sector in Canada • Single purpose funding 12/4/2015Footer Text 18
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