AirAhead Airlines

Business Plan
Seneca College
AVM121NAA Major Assignment
Professor Ryan Carter
Provided by Group #3
HAMED- YAOMING- KEVIN- PATRICK- SAFWAN- CHRISTIAN

B.P. 12/4/2015 1
 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

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 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.

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 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.

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 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.

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Our Fleet: Bombardier Q400

• 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)

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 Marketing and Sales
Strategies
• Service (Product Offering)
• Place (sales and distribution)
• Price (Fare structure )
• Promotion (advertising)
Incumbent Airlines in B.C
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

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 Threats & Risks
• Strong Competitors & big companies
• Safety (difficulty securing new gates at airports)
• Terrorism
• Accidents
• Fuel Cost hikes
• Rising airports fees

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 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
 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
Weaknesses
• 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  Strong Competitors & big companies
 Low Fare Pricing  Safety (difficulty securing new gates at airports)
 Offer Travel Tour Package  Fuel Cost hikes
 Off-season development  Rising airports fees
 More destinations and also tapping global customers  Accidents
 Maximize aircraft utilization  Terrorist attacks

AirAhead Airline 12/4/2015 12

 Implementation
Schedule

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 AirAhead Airlines Inc.'s market presence will be
achieved by relying on the strategy of identifying
and serving a specialized niche market well.
• 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.

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 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
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 Capital Structure
start-up Capital Needs
Cost of 2 Aircraft - $30 000 000 Indirect Costs 2016-2017
Aircraft Lease - $2 000 300 Advertising $3 000 000
Advertising - $3 000 000 Expenses
Expenses Internet & $50 000
Cash Balance $14 000 700 Technology
Rent $150 000
Other $220 000
Total $3 420 000

Aircraft Insurance $125 000 000 annually

Aircraft Leasing $185 000 monthly

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 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

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 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

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•
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