Graduate capstone presentation

ESTABLISHING AIR MANO TO PROVIDE
REGIONAL AIR TRAVELS AMONGST THE MANO
RIVER UNION COUNTRIES –WEST AFRICA
-BY PRINCE YEAKEHSON( LL.M,MBA)

 The Mano River Union (MRU) is an international association established
in 1973 between Liberia and Sierra Leone. In 1980, Guinea joined the
union. The goal of the Union was to foster economic cooperation among
the countries. It is named after the Mano River which begins in the
Guinea highlands and forms a border between Liberia and Sierra Leone.
Due to conflicts involving these countries, the objectives of the Union
has not be achieved. However, on May 20, 2004, the Union was
reactivated at a summit of the three leaders of the Mano River Union
States. On April 1, 2008, Cote d'Ivoire agreed to join the union. Cote
d’Ivoire’s agreement to join the MRU brings the Union membership to
four. Despite the civil wars and civil insurrections in these four countries,
the population growth is progressive and economic activities are again
picking up. There is no history of an existing or established regional air
transport to the four countries. Although there are international flights
like Delta, Brussels and France Airlines that fly to these countries,
thousands of businessmen spent days, weeks or months on commercial
vehicles to travel from one of these countries to the next simply because
they cannot afford high fares demanded by these international airlines. I
think the establishment of a regional airline (Air Mano) to be named after
the exiting union that ties the four countries, economic activities will be
stimulated and this will bring a great investment return to my business.

 This paper will endeavor to analyze the
current situation in the Mano River Union
region especially regarding the stability of the
region for airline investment purpose,
Strategic Direction (mission statement) of Air
Mano ,External Environment, Opportunities
for Growth , Industry Rivals positioned value
chain and competitive strategy ( marketing
strategies) and pro forma income statement.
Conclusion and references will follow next.

 Although Liberia, Guinea and Sierra Leone have
common aeronautical authority known as the
Robert Flight Information Region (RFIR) which is
responsible to monitor the airspace of the three
countries and to collect over flight fees for
aircrafts plying their collective airspace, the three
countries have failed to establish and fund
regional flights in the MRU. There was plan to
establish one in the past but failed. They failed
because of political interferences from the MRU
countries leaders. There is no exiting regional
airline industry in the Mano Rive Union to take
advantage of this economic zone.

 The airlines that operate in these countries are
concerned with international operations rather
than regional. Although some of them sometimes
have schedule flight like from Brussels- Liberia -
Cote d’Ivoire-Brussels on Brussels Airline;
Atlanta-Ghana-Liberia –Atlanta on Delta Airline
and France-Guinea-Liberia –France or France –
Senegal-Freetown- France on France Airways,
there is no regional fight to go the route of
Liberia-Freetown-Guinea- Cote d’Ivoire-Liberia
like the proposed Air Mano will be engage in.

 With the establishment of Air Mano as a full flesh
regional flight, the question of competition will
be very slim as many people will not want to go
through the hurdles of connecting with two
points as posed by these international airlines.
Although I recognize the fact that Air Mano will
be faced with enormous challenges ranging from
acquisition of a demand seated aircraft to
confidence building in the region to prove
reliability with schedule flights (even if it means
to fly with empty seats), in the long run, there
will be huge investment returns. In short, the
concept of this business is regional air
transportation.

 3.1. The mission of Air Mano is to serve the
Mano River Union Member Countries by
providing alternative and feasible air
transport services.
 3.2. The objective/vision of Air Mano is
fundamental to the purpose of any business
gear towards minimizing cost at a relative
gain through investment returns thus
actualized by delivering timely and
meaningful air transport services in the
region.

 To actualized this objective/vision, I will have
to seek regional shareholders ( Common
Stock holders) from Guinea, Liberia, Sierra
Leone, and Cote d’Ivoire to increase ( say my
$1.6 Million venture capital) to enable us buy
at least two 30 seated aircrafts whereby we
will use one for standby.

 3.3. The philosophy of Air Mano is enshrined
in its mission statement: to serve the public
happily and timely at reasonable cost for
better service. This philosophy will be
reflected by the management control systems
we will employ to gain the public attention
and to pull them over from the commercial
vehicles they have travelled by long distances
in the past for days, weeks and months and
to create an air service environment for them
to travel by air safely.

 Air Manor will be incorporated under the laws
of the Republic of Liberia and headquartered
in Monrovia. It will have branch offices in
Guinea, Sierra Leone, and Cote d’Ivoire to be
headed by a branch manager who shall report
to the General Manager. The General Manger
shall be based in Monrovia, Republic of
Liberia. He/she shall implement the corporate
responsibility of Air Mano in the region.

 Research and development shall be headed by a
director who shall be responsible for research,
planning and development of Air Mano. In short, the
director for R&D shall control the economic affairs of
the company.
 Corporate Finance shall be headed by a a comptroller
who shall be responsible for the corporate finance in
for all locations in Liberia, Guinea, Sierra Leone and
Cote d'ivoire.
 Sales force/Sales Department shall be responsible for
sales strategies in the region regarding promotion,
pricing/airfare structuring to meet market demand.

 BOARD OF DIRECTORS
 HEADQUARTER(MONROVIA)
 RESEARCH & DEVELOPMENT
 CORPRATE FINANCE
 SALES FORCE/marketing
BRANCH OFFICE
(FREETOWN)
BRANCH OFFICE
(CONAKRY)
BRANCH OFFICE (ABIDJAN)

 The management principles/practices that are being
implemented at Air Mano will be done through:
Planning, Organizing, Leading, and Controlling.
 Planning-The planning and research department will
be under one supervising manager. Planning will
entails forecasting/ projecting the traffic for the year,
ticket sales expected for the year, maintenance
schedule and fuel cost estimates, and outline or
suggest how to achieve these in 5 or 10 years.
Implementations to achieve the 5 or 10 years goal
will be divided into objectives/ phases: Phase 1, 2, 3 ,
etc. or Year 1, 2, 3 and so on.

 For example, Year 1 goal would be to
incorporate Air Mano, rent an office space in
Monrovia and have it staffed, launch the
company in Liberia and engage in maximum
publicities in all the Mano River Union
Countries to create awareness of our regional
flight operations, purchase the company’s
first aircraft, and launch the company’s
website where the public can transact
business with our company anywhere they
are in the world.

 Year 2 would focus more on establishing
branch offices in each Mano River Union
Countries and year 2 would focus on
purchasing additional aircrafts to increase our
fleet in the region depending on the demand,
etc.

 Regarding the organization of
implementation of these plans outlined
supra, the Sales Force Department which will
be headed by another supervising manager,
will shoulder most of the responsibilities of
implementation of the Planning Department’s
research and plans for the company. For
example, the Sales Force Department job
would be publicity/ marketing, and sales.

 Leading and control will be the sole responsibility
of management and management will be headed
by a General Manager who shall run the day
today activities of Air Mano. He shall coordinate
operational activities of Air Mano in the region
which shall include establishing branch officers
in the Mano River Union member countries,
hiring and firing employees, purchasing aircrafts
and maintenance equipment for the company
and making sure shareholders values are
paramount and not entrenching himself/herself.
He shall also ensure that the corporate finances
are well managed by the Department of Finance.

 4.1. Opportunities for Growth
 According to Thomas et al (2012), the macro-economic
environment encompasses the broad environmental
context in which a company’s industry is situated. It
includes several components: population demographics,;
societal values and life styles, political, legal and
regulatory factor, the natural environment and ecological
factors, global forces, etc.
 As mentioned in the introduction to this paper, the four
member countries of the MRU were struck by civil wars
and civil unrest which destroyed meaningful economic
activities in this region and it could not meet its objectives
to foster trade and economic cooperation for two decades
(Conference Report- ECOWAS, (2010).

 Today, the guns are silent in this region and
people are trying to rebuild their lives again.
Although there are international flights like
Delta, Brussels and France Airlines that fly to
these Mano River Union countries, thousands
of businessmen spent days, weeks or months
on commercial vehicles and by foot to travel
from one of these countries to the next;
simply because they cannot afford high fares
demanded by these international air carriers .

 I think the establishment of a regional airline (Air
Mano) to be named after the exiting union that
ties the four countries, economic activities will be
stimulated and this will bring great investment
return to my business in the long run. In fact, the
current population statistics of these four
countries are as follow: Liberia: 4.1Million, Cote
d’Ivoire: 22 Million, Guinea: 10.8 Million and
Sierra Leone 5.8 Million
 SOURCE: World population 2011 by country (http://www.prb.org/Publications/Datasheets/2011/world-
population-data-sheet.aspx ).

 4.2. Industry Rival Positions
 The rivals in this industry are the Brussels
Airlines, Delta Airlines, and Air France; however,
these are international airlines. Although, they fly
to these MRU countries, they are not interested in
regional operation as Air Mano is proposed to be.
For example, Brussels Airlines flies from
Brussels- Liberia - Cote d’Ivoire-Brussels; Delta
Airlines flies form Atlanta-Ghana-Liberia –Atlanta
e and Air France flies from France-Guinea-Liberia
–France or France –Senegal-Freetown- France.

 It is interesting for my proposed business, to
note that none of these international flights is
interested in regional operations for my
proposed route: Liberia-Freetown-Guinea-
Cote d’Ivoire-Liberia. With the establishment
of Air Mano as a full flesh regional flight, the
question of competition will be very slim as
many people will not want to go through the
hurdles of connecting with two points as
posed by these international airlines.

 Although I recognize the fact that Air Mano
will be faced with enormous challenges
ranging from acquisition of a demand seated
aircraft to confidence building in the region
to prove reliability with schedule flights (even
if it means to fly with empty seats like South
West Airlines sometime does in the United
States), in the long run, there will be huge
investment returns
SOURCE: Peter-Donnelly, 2007 and Southwest fact sheet).

 According to Thomas et al, (2012), ―resource
and capability analysis provides managers
with a powerful tool for sizing up the
company’s competitive assets and
determining whether they can provide the
foundation necessary for competitive
advantage over market rivals‖. They further
assert that it is the fundamental building
blocks of its competitive strategy.

 And regarding value chain, they put emphasis
on cost efficient management and lower costs
through economic of scale, experienced and
learning curve effects, operating at full
capacity, improving supply chain efficiency,
minimizing cost at higher output, motivating
employees for high customer service and
productivity, breaking the line of
intermediaries to direct sale to customers at
lower cost, etc.

 For Air Manor, the following value chain
enhancements will be employed:
 6.1. Value Chain Enhancement Idea #1:
Operation-Air Manor will operate only three 30
seated aircrafts in the Manor River Union
countries. Two will be operated at a time and one
be used for standby to avoid any disappointment
for our passengers just in case of any technical
failure depriving us from take-off at any airport.
We hope to run at a full capacity of 24/7 ( 24 hrs
a day and 7 days a week).

 6.2. Value Chain Enhancement Idea #2 Sales-
 Air Mano will endeavor to maintain a low price
that we think our market survey data has
indicated. We will however ensure not to operate
at a lost. Our low price will really be a
promotional price but will continue to charge
base on affordable economic indicators in the
region of our operation and customers. We
ourselves will sell Air Mano tickets to our
customers to avoid hike in price by
intermediaries (travel agencies). In fact,
customers will be allowed to purchase Air Mano
tickets and book seats online from our website
without any hassle.

 Although our focus is to offer airline services
to the travelling public as our main business,
we will however offer duty free services
through a mini sale on our aircraft while in
flight. Every duty free item sold on our
aircraft will have Air Manor printed on the
pack or label. Our advertisement budget will
be about 40% of our total operation budget
for the first year.

 We will sell at discount price for families
traveling one direction and a 10 % reduction
in price for round trip tickets lasting not more
than one month. And In our attempt to
maintain low airfare, infants (below age 1) as
long they don’t occupy a seat in our aircraft,
will not be charged a fare. Age 1-12, will be
charged the same rate but lower than the fare
for age 13 up- ward.

 6.3. Value Chain Enhancement Idea #3:
Customer Service
 Customer service is one key factor in the
airline business (Southwest Airlines Fact
Sheet).At Air Mano, we will serve our
customer honorably and address their
concerns /complaints (if any) promptly. By
that, we will ensure to have customer
complaint hot lines open 24/7 to give them
the opportunity to reach our Hotline
Customer Complaint Team across the region.

 We will also provide a menu on our website for
customer complaints and concerns. As
mentioned, we will open one branch office in
each of the MRU member countries to handle
branch matters regarding the sale of tickets and
customer’s complaints. We will serve one meal on
each of our aircrafts (say from Monrovia-
Freetown or from Freetown –Conakry) since the
distances between these countries are less than
one hour. We will sell mini items on our aircraft
at a duty-free price during a flight.

 7.1. Marketing Emphasis/Focused Low Cost
Provider
 Under this theory, Thomas et al, (2012)
elaborated that it is better to communicate
attractive features of budget priced product
offering that fits the niche member
expectations. In this regard our competitive
/market strategies will begin from our sale
promotion.
SOURCE: Thomas, Arthur, A., Peteraf, Margaret, A., Gamble, John E, Strickland III, A.J., (2012),
Crafting and Executing Strategy, p.96-97; 50; 138-141

 Sales promotions directly influence corporate
performance by attracting and serving a
firm's customers in both economic and
psychological ways; Promotions also serves
as a point of differentiation that can help a
brand stand out in a category -- regardless
of product attributes or prices.
 SOURCE: PR Newswire [New York] 11 June 2002: Four-Year Research Study Concludes: Sales
Promotion Benefit to Consumers and Businesses (http://search.proquest.com.ezp-
00rrw.lirn.net/docview /443992089/13BE53BC3D07BBE0D56/2?accountid=35996)

 As part of its sale promotion, Air Mano will
commence its flight operations between two city
points: Monrovia-Freetown-Monrovia. There will
be a one month advertisement in the two
mentioned cities regarding the commencement
of a regional flight that will fly from Monrovia
(Liberia) to Freetown (Sierra Leone), Conakry
(Guinea) and Abidjan (Cote d'ivoire). The publicity
will be in the print and electronic media as well
as several giant billboards will be planted across
the two initial cities with photos of the type of
aircrafts Air Mano will operate.

 The public will be informed about our promotion
price. Air Mano flight will be made to fly over
each of the two cities for 30 minutes during our
launching program. This same approach will be
carried out to the other two cities (Conakry and
Abidjan). After operating for three months, we
will include Guinea by establishing a branch
office in Conakry and our route will be Monrovia-
Freetown-Conakry-Monrovia. In six months
times, we will include the forth city (Abidjan) by
also establishing a branch office there.

 Finally, our route will be Monrovia-Freetown-
Conakry-Monrovia for Mondays, Wednesdays,
and Fridays and the other route will be
Monrovia- Abidjan-Conakry-Monrovia on
Tuesdays and Thursdays. On Saturday our
route will be Monrovia-Freetown-Conakry-
Abidjan-Monrovia and on Sunday our route
will be Monrovia- Abidjan-Conakry-
Freetown-Monrovia.

 7.2. Basis for Competitive Strategies/Focused
Differentiation
 Under this theory, Thomas et al, (2012) also
advanced that there has to be attribute that
appeal specifically to niche members. In this
regards we will ensure the following two Ps:
price, and place and the five Cs: Consumer,
Cost, Communication, and Convenience to
appeal to the travelling public:


 7.2.1. Price-The price/ airfare is one main
factor in the airline industry that will
encourage the public to travel by air. In this
regard, we will ensure to maintain a perpetual
low fare/price per passenger. Infants (below
age 1) as long they don’t occupy a seat in our
aircraft, will not be charged a fare. Age 1-12,
will be charged the same rate but lower than
the fare for age 13 up- ward.

 7.2.2. Place-Regarding place of our
operation, as mentioned early, Air Mano flight
operation will be regional ( West Africa) and
the countries involved are Liberia, Sierra
Leone, Guinea and Ivory Cost. These
countries are the only members of the Mano
River Union (MRU). We don’t intend to go
beyond.

 7.2.3. Consumer-the purpose of our business
is to serve the travelling public by air in the
Mano River Union countries. We will do
everything in our reach to encourage the
peoples in these countries to see our service
useful to them as not just an alternative for
travelling but a save transport.

 7.2.4. Cost-The cost for the production of
revenue for a targeted profit is a great concern
for any investment. Air Mano cannot be an
exception to this truism. However, our objective
is not to make profit in the short run but in the
long run. We intend to establish an air travel hub
in this region as a better alternative to land
travel. Therefore, we will enjoin on the four MRU
Countries’ governments to reduce the taxes on
air tickets for this region so that our tickets
would be affordable.

 7.2.5. Communication-We will convey
messages of Air Mano through print and
electronic media and by way of gigantic
billboards, and community dramas.
 7.2.6. Convenience- We will ensure to be on
time with our scheduled flights and we will
make the travelling public aware and to trust
us for this. In the near future, we will
purchase a bigger seated aircraft for our
passengers’ convenience.

 A pro forma income statement is similar to a
historical income statement, except it
projects the future rather than tracks the
past. Pro forma income statements are an
important tool for planning future business
operations. If the projections predict a
downturn in profitability, you can make
operational changes such as increasing prices
or decreasing costs before these projections
become reality.

 Pro forma income statements provide an
important benchmark or budget for operating a
business throughout the year. They can
determine whether expenses can be expected to
run higher in the first quarter of the year than in
the second. They can determine whether or not
sales can be expected to be run above average in
June. The can determine whether or not your
marketing campaigns need an extra boost during
the fall months. All in all, they provide you with
invaluable information—the sort of information
you need in order to make the right choices for
your business.

 Creating a pro forma income statement for
Air Mano
 We will begin with the income statement from
the current year. For example, it is obvious
that each item on that statement will be
changed during the coming year and this will
enable us to estimate final sales and
expenses for the current year to prepare a
pro forma income statement for the coming
year.

 Pro forma gross profit
 If we assume that we’re going to expect sales to
increase by 10 percent next year, we can safely
multiply this year’s sales of ( Say $4,000,000 by
110 percent to get $440,000,000.
 Then, in this case, you assume there will be no
increase in the cost of each our flight operation
or sales of air tickets, and if we need 10 percent
more sales in order to achieve your sales goals,
we also safely multiply this year’s cost of goods
sold (let’s assume a figure of $2,000,000), by
110 percent to get $220, 000,000.

 To figure your pro forma gross profit for next
year, we can subtract the pro forma cost of
goods sold from the pro forma sales.
$440,000,000 minus $220,000,000 equals
our gross profit, or $220,000,000.

 Pro forma total expenses
 Let’s assume salaries and other expenses will
increase by 5 percent. In that case we will
multiply our historical salaries of
$20,000,000 and our historical expenses of
$1, 000,000 by 105 percent each. Our pro
forma salaries for next year will be $21,
000,000 and our pro forma expenses will be
$205,000. You then figure your pro forma
total expenses by adding pro forma salaries
and pro forma other expenses together.

 Liberia, Sierra Leone, Guinea and Cote d’Ivoire
have individually experienced civil wars
(instability) since 1990. There is serious
economic meltdown in the region and the force
that bond them together (the Mano River Union)
has done less to bring any economic cooperation
amongst the four countries. The instability
caused huge deplorable road conditions in the
neighboring countries to Liberia. Business
people spent weeks or months commuting from
one of the MRU Countries to the next to trade
goods and services.

 I have intended to establish an airline to be
headquartered in Monrovia; establish
operational sub offices in the other three
countries and to seek shareholders from the
four countries to enable us to buy few
aircrafts for our air operations in the region.

 Finally, we will carry on promotional activities
for one month by engaging both the print
and electronic media, placing big billboards
to advertise our presence and our low prince,
and dramatizing on the radio about the
importance of air travel as a fast and time
saving medium of transport. Air Mano will
ensure to maintain a scheduled flight
according to the plan advertised and as
stipulated in this plan.


 ECOWAS International Conference –Two Decades of Peace process in
West Africa, Achievements – Failures-Lesson, Monrovia, Liberia
22-26 March 2010)
http://www.comm.ecowas.int/dept/h/h1/en/rapport/Final_Report_
Two_Decades_English.pdf
 http://www.nationsonline.org/oneworld/africa.htm
 http://businesscasestudies.co.uk/business-
theory/marketing/marketing-mix-price-place-promotion-
product.html
 International Crisis Group
http://www.crisisgroup.org/en/regions/africa/west-africa.aspx and
http://www.acp.int/content/speech-secretary-generals-statement-
26th-session-acp-parliamentary-assembly-18-november-2011
 Peter-Donnelly,(2007), Marketing Management, P.283


 PR Newswire [New York] 11 June 2002: 1. (Four-Year
Research Study Concludes: Sales Promotion Benefit to
Consumers and
Businesses)http://search.proquest.com.ezp-
00rrw.lirn.net/docview/443992089/13BE53BC3D07BBE0D
56/2?accountid=35996
 Southwest Airlines Fact
Sheet(http://www.southwest.com/html/about-
southwest/history/fact-sheet.html)
 Thomas, Arthur, A., Peteraf, Margaret, A., Gamble, John E,
Strickland III, A.J., (2012), Crafting and Executing
Strategy, p.96-97; 50; 138-141
 World pPopulation in 2011 by
country(http://www.prb.org/Publications/Datasheets/201
1/world-population-data-sheet.aspx

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