Airline Marketing Plan Essay

Executive summary 1. 0 Executive Summary pond Jumpers Airlines, Inc. is a impertinent consumer flight path business in its formative stages. It is being organized to take advantage of a specific gap in the short-haul domestic run short market. The gap exists in low comprise service out of Anytown, U. S. A. The gap in the availability of low cost service in and out of the Anytown hub coupled with the solicit for passenger travel on selected routes from Anytown indicates that a young entrant airline business could be judge to capture a significant portion of genuine air travel business at that hub. The care of make Jumpers is see in airline start-ups.Previously wariness grew Private resiny Airlines from a single Boeing 727 to a fleet of 16 MD80 series aircraft. Revenues grew to $130 adept thousand million in a two course of study period from 1992 through 1993. Our interrogation and projections indicate that air travel to and from Anytown is sufficient to get out a new carrier with revenues of $110 million dollars in its first gear full grade of operations, utilizing six aircraft and selected short-haul routes. These gross sales figures argon based upon load factors of only 55% in year one. Second year revenues be expected to authorize $216 million dollars with additional aircraft and expanded routes.Load factors for year two are 62%. The wade Jumpers plan has the potential for a more quick ramp-up than was the case with Private Jet due to the nature of the routes and the demand for travel currently in the targeted markets served. In short, the frequency of flights needed to serve Puddle Jumperss target market exceeds the demand that dictated Private Jets growth. These sales levels forget produce net profit of solely over $1 million in the first operational year and $21. 4 million dollars in flight year two. Profits in year one pass on be 1% of sales and will improve to 10% of sales with the economies gained in year two.The over-all operational coarse term profit target will be 16% of sales as net profit in years three, four, and five. The comp boths long term plan is part of the due diligence package. The first operational year is veritablely fiscal year two in this plan. The first year of formative operations will burn funds until revenue can commence. This is due to the organizational and regulatory obligations of a new air carrier. Investment activity is needed to handle the expenses of this phase of the business. The side by side(p) chart illustrates the over-all highlights of our business plan over the first three years. piggy Margin here is approximately 87% of sales since the only be included in this calculation are travel agent commissions, credit entry card discounts, and federal excise taxes. Travel agent commissions are reason on 30% of sales even though management feels the actual number will not exceed 10% of sales. NOTE For boasting purposes in this sample plan, numerical values in table s and charts are shown in thousands (000s). Highlights 1. 1 Objectives The follow has the following objectives 1. To obtain required D. O. T. and F. A. A. certifications on or before March 1, 1997. 2.To commence revenue service on or before July 1, 1997. 3. To raise sufficient seed and bridge capital in a timely fashion to financially enable these objectives. 4. To commence operations with two McDonnell-Douglas MD-80 series aircraft in month one, four by remove of month four, and six by end of month six. 5. To add one aircraft per month during year two for a total of 18 at year two end. 1. 2 Mission Puddle Jumpers world-wide 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 knead the newest and best kept up(p) 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 cou rteous no frill service. 1. 3 Keys to Success The keys to achievement are Obtaining the required governmental approvals. Securing financing. Experienced management. (Already in place). Marketing all dealing with channel problems and barriers to entry or solving problems with major advertise and promotion budgets. Targeted market share must be achieved even amidst expected competition. Product quality.Always with safety foremost. Services delivered on time, costs controlled, merchandising budgets managed. There is a temptation to fix on growth at the expense of profits. Also, rapid growth will be curtailed in tack together to keep maintenance standards both strict and measurable. Cost control. The over-all cost per ASM (available asshole mile) is pegged at 7. 0 cents or less in 1996 dollars. This ASM factor places Puddle Jumpers in a grouping of the lowest four in the airline industry within the short-haul market. (US Air, the dominate carrier in the Anytown market, averages 12. 0 cents per ASM by comparison).The only three airlines with lower operating costs also operate older and less reliable equipment, and even then the lowest short-haul cost in the airline industry is currently Southwest at 6. 43 cents per ASM. Company Summary 2. 0 Company Summary Puddle Jumpers International Airlines is being formed in July, 1996 as a South show Corporation. Its offices will be in Anytown, Georgia. The founder of Puddle Jumpers is Kenneth D. Smith. Mr. Smith has great experience in consumer aviation. His bio as well as the backgrounds of all the members of Puddle Jumperss management team are enclosed herein. 2. 1 Company OwnershipPuddle Jumpers International Airlines, Inc. will authorize 20,000,000 shares of common blood. 1,000,000 shares are to be set aside as founders stock to be divided among key management personnel. It is also expected that management stock alternatives will be made available to key management personnel after operations commence. It is expec ted that founders stock plus option stock will not total more than 15% of original shares. Initial seed capital is to be attracted via a convertible debenture sold by Private Placement. This round of funding will chip in premium conversion privileges vs. later rounds and bridge capital.