Market factors favor inauguration of a new airline to meet the demand for additional, higher-quality passenger and cargo service linking Western Europe with the rapidly expanding markets of Southeastern Europe and Turkey, and linking Southeastern European destinations, via Western European hubs, to trans-Atlantic and global destinations.
This new airline will base its business and marketing strategies on achieving high, and profitable, load factors through absorption of unmet demand in three key air-traffic categories: unserved and under-served routes on which high unmet demand currently exists or can be readily developed; serving key niche markets where demand is either unmet or poorly served; and meeting peak traffic demands on certain key regional, seasonal, and variable routes where very high load factors can be predicted despite existing but lower-quality competition, or where competition cannot meet the demand.
In addition, the proposed new airline will be designed around, and operated utilizing, the most up-to-date electronic, informational, and aviation technologies to ensure low operating and marketing costs, maximum efficiency in deployment of its resources, and a high level of customer service and convenience. And it is this final element — dedicating the airline, its staff, and its organization to providing a high level of customer service and convenience, and efficiently meeting the needs, wants, comfort, and safety of the passenger — that will assure the proposed airline’s rapid acceptance in the marketplace and its long-term growth and success.
Particularly in the post-09/11/01 environment, experience in Europe has shown that those carriers which can maintain a «mean-and-lean» operation while still meeting the needs and desires of the traveling public, with the right fares, will not only survive, but can prosper.
The six key characteristics leading to the success and profitability of this new carrier will be:
• Provision of high-quality service on routes and in markets that currently are either unserved, poorly served, or under-subscribed by existing carriers, thereby setting both a new trend and a new pace in air service to and within the Southeastern European region.
• Employment of cost-effective, up-to-date regional aircraft that will be sized right for the market and the route, leading to higher load factors, reduced costs, improved efficiency and flexibility, greater passenger comfort and satisfaction, and higher net profits. Outfitting these aircraft with the latest aviation technologies and navigational equipment will help ensure the highest level of reliability, punctuality, safety, and customer satisfaction.
• Utilization of the latest electronic and informational technologies in sales and marketing; reservations, ticketing and check-in; scheduling and resource planning; cargo tracking; and operational oversight. Such techniques as internet marketing, reservations, and sales; electronic ticketing and check-in; online quality control, resource planning, operational oversight, cargo and baggage tracking, and customer service, all will reduce staffing requirements while offering ease-of-use and greatly enhanced access by, and convenience to, the customer.
• Recognition that not everyone is geared for the electronic world, leading the proposed airline to provide a high level of non-electronic service as well, particularly to the many newer, less-experienced travelers — but future loyal customers — found in the region.
• Ensuring a friendly, cooperative, enjoyable, yet highly professional face to the customer.
• Development and implementation of cooperations, associations, and partnerships with other larger, more established, and highly regarded airlines both within and beyond the region to provide an extensive range of connections, through fares, frequent-flyer mileage sharing, and other passenger and client advantages through interline arrangements, code shares, common hubbing, and so forth.
In short, the goal of this new airline is to be known to the passenger and the cargo customer by its proposed motto: «We’ve got a job to do, and we do it every day — for you!»
Primary financial results anticipated during the first year of operations include:
• Average passenger load factors in the 60-80 percent range, depending on route and season, reached within the first year of flight operations, and increasing thereafter to the 75-90 percent range.
• Revenues approaching [XYZ] million USD within the first six months of flight operations, exceeding [XYZ] million USD by the end of the first year, [XYZ] million USD in the second year of operations, and nearly [XYZ] million USD in the third.
• A gross operating margin of close to [XYZ] percent achieved within the first year of operations, reaching close to double that by the third year, and with steady growth enabling rational expansion of the airline thereafter. Even in the first year of operations, a pre-tax profit of [XYZ] million USD is anticipated. This is applying a very conservative business model, and is achieved on an initial investment of less than [XYZ] million USD, yielding a return on equity of [XYZ] percent. The accompanying chart illustrates the growth and profit potential present.
A key element contributing to the success of this new carrier will be its organizational and management team. Leading this team is Balkan Consortium Holdings USA, Inc. (BalkConsort), a U.S. corporation that is regionally based in Southeast Europe and which knows the region and its business needs. BalkConsort, together with its partner companies and associations throughout the countries of Southeast Europe and beyond, identifies business and profit opportunities and develops projects and strategic partnerships to implement and benefit from them.
As explained in the Company Summary that follows later in this business plan, BalkConsort USA’s interest and ownership in the proposed airline will transfer first to a new off-shore holding company, BC Holdings International Ltd, and then to a daughter company registered in a member state of the European Union («BalkConsort EU»), both of which will be established prior to the airline’s start-up. Due to current European Union requirements that E.U. nationals hold the majority interest in an E.U.-flagged carrier, and the importance of an E.U. air operators certificate (AOC) to the new airline’s overall business plan, a majority ownership stake in the new airline, either directly or through «BC Holdings EU,» must be by E.U. nationals.
Joining the BalkConsort USA/BC Holdings International team are aviation, finance, and marketing experts with long and successful track records, including extensive experience organizing and managing other start-up airlines of both a regional and global scope. This organizational and management team, which is described in greater detail in the section of the business plan dealing with the Management Team, will help reduce the risk and ensure the success of the proposed new carrier.
1.0 Executive Summary
1.1 Objectives
1.2 Mission
1.3 Keys to Success
2.0 Company Summary
2.1 Company Ownership
2.2 Company Locations and Facilities
3.0 Services
3.1 Service Description
3.2 Competitive Comparison
3.3 Sales Literature
3.4 Technology
3.5 Future Services
4.0 Market Analysis Summary
4.1 Market Segmentation
4.2 Service Business Analysis
4.2.1 Main Competitors
5.0 Strategy and Implementation Summary
5.1 Marketing Strategy
5.1.1 Pricing Strategy
5.1.2 Promotion Strategy
5.2 Sales Strategy
5.2.1 Sales Forecast
5.3 Milestones
6.0 Management Summary
6.1 Organizational Structure
6.2 Management Team
6.3 Management Team Gaps
6.4 Personnel Plan
7.0 Financial Plan
7.1 Important Assumptions
7.2 Key Financial Indicators
7.3 Projected Profit and Loss
7.4 Projected Cash Flow
7.5 Projected Balance Sheet
7.6 Business Ratios
1.0 Executive Summary
1.1 Objectives
1.2 Mission
1.3 Keys to Success
2.0 Company Summary
2.1 Company Ownership
2.2 Company Locations and Facilities
3.0 Services
3.1 Service Description
3.2 Competitive Comparison
3.3 Sales Literature
3.4 Technology
3.5 Future Services
4.0 Market Analysis Summary
4.1 Market Segmentation
4.2 Service Business Analysis
4.2.1 Main Competitors
5.0 Strategy and Implementation Summary
5.1 Marketing Strategy
5.1.1 Pricing Strategy
5.1.2 Promotion Strategy
5.2 Sales Strategy
5.2.1 Sales Forecast
5.3 Milestones
6.0 Management Summary
6.1 Organizational Structure
6.2 Management Team
6.3 Management Team Gaps
6.4 Personnel Plan
7.0 Financial Plan
7.1 Important Assumptions
7.2 Key Financial Indicators
7.3 Projected Profit and Loss
7.4 Projected Cash Flow
7.5 Projected Balance Sheet
7.6 Business Ratios
APPENDIX
SALES FORECAST
PERSONNEL PLAN
GENERAL ASSUMPTIONS
PRO FORMA CASH FLOW
PRO FORMA BALANCE SHEET
