American Express is considering acquiring Buddy Air, an established air taxi company. This would allow AE to enter the growing air taxi market by buying an existing market leader rather than building operations independently. There is significant customer overlap between Buddy Air and AE's customer base, and AE could leverage its existing resources, reputation, and customer loyalty programs. The presentation recommends that AE initially buy Buddy Air to minimize risk, then expand Buddy Air's operations into new markets using AE's existing travel services, investors, customers, and capital - achieving growth while mitigating long term risks compared to building an air taxi business alone.

1. AMERICAN EXPRESS PROPOSAL PRESENTATION
Jennifer Aguirre
Donny Davidson
Ian Hitchcock
Jackie Mai
Danielle Smith

2. WHERE IS AMERICAN EXPRESS TODAY?
"American Express is a globalservices company that
provides customers with access to products, insights and
experiences that enrich lives and build business success."
"Our brand and its attributes — trust, security, integrity,
quality and customer service — are key assets of the
Company."

3. WHERE IS THE AIR TAXI MARKET TODAY?
Air taxis are a niche segment of the
airlineindustry.Ultimategoalis to
provide economicallyviableshort-
haulairtravel to underserved
markets.
Recent technologicalbreakthroughs
in jet engineperformance make air
taxis a feasiblecommercial
possibility.

4. AMERICAN EXPRESS BRINGS
COMPETITIVE ADVANTAGES
Large customer database and travel services
business to build product and brand awareness
Existing awards program
Strength of logistics; history of employing advanced
pattern recognition and customer profiling
algorithms
Resources providestrategic flexibility

5. OUR RECOMMENDATION:
BUY THEN EXPAND
KEY POINTS
Established
Business
Potential
for
Expansion
Minimizes
Risk

6. BUDDY AIR:
AN ESTABLISHED MARKET LEADER

7. BUDDY’S BUSINESS MODEL:
OIL AND RANCHERS

8. BUDDY AIR AND AMEX
CUSTOMERS OVERLAP
75% to85% of Buddy Air flyers are
Platinum or Centurioncardholders...
...55%to 65% of those already use AmEx
travel services to book their flights.

9. TAKING ADVANTAGE OF
EXISTING INFRASTRUCTURE

10. ROOM FOR EXPANSION (RE)
Existing Resources
Optimization
Additional Markets
Existing Reputation

11. RE:WE GROW USING OUR
EXISTING RESOURCES
Travel Services
Investors
Loyal Customers
Capital

12. RE:WHERE DO WE GROW?
ExpansionInterests
 Travel Destinations
 Rural & Industrial Markets
Potential Interests
 Major Metropolitan Markets

13. RE: FURTHERING OUR REPUTATION

14. RE: STANDARDIZE AND OPTIMIZE

15. BUYVS. BUILD COMPARISON
0
100
200
300
400
2014 2015 2016 2017 2018
Projected revenue (in million)
Buy Build
2 markets:
Texas and
Oklahoma
5 markets

16. BUYING IS LESS RISKY
THAN BUILDING ALONE
Downside Base Scenario Upside
Terminal Value ($103,684,879) $453,001,728 $1,874,051,597
NPV ($138,901,886) $329,677,217 $1,479,103,233
IRR unavailable 105.58% 284.61%
Possibility 50.00% 25.00% 25.00%
Market Share 5.00% 13.50% 20.00%
Downside Base Scenario Upside
NPVoffuture cash (190,352,730) 217,496,808 534,324,684
IRR unavailable 13% 29.60%
Market Share 19.00% 19.00% 19.00%
Possibility 20.00% 55.00% 25.00%

17. LONG TERM RISKS OF BUYING

18. BUY THEN EXPAND:
THE BEST OF BOTH WORLDS
Established Industry Room for Expansion
Strategic Entrance into Air-Taxi Industry