Airline Project Plan Market Factors Essay

  • Length: 11 pages
  • Sources: 10
  • Subject: Business
  • Type: Essay
  • Paper: #17138348

Excerpt from Essay :

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.

(10) 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.

(11) Ensuring a friendly, cooperative, enjoyable, yet highly professional face to the customer.

(12) 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. (Air Leo Business Plan, nd)

One of the very first and most important steps in airport master plan preparation is the forecasting of future aviation activity in an unconstrained environment which means that the forecast is not constrained "by any assumptions about the availability of existing or future Airport facilities including aircraft gates or runways. These forecasts are that representing the "natural" activity that would occur at the Airport in this study without any constraints placed upon the availability of facilities. (Air Leo Business Plan, nd, paraphrased) the following table contains a summary of the unconstrained Master Plan forecasts.

The following table summarizes the unconstrained Master Plan forecasts:

2011

Purchase Price Per Share

Number and Types of Airplanes Used

Price of Real Estate Sold and Purchased

Number of pilots and cabin crew

Number of Administrative Staff

General Aviation

Daily Operations

Helicopter

Jet

Piston

Turboprop

The Master Plan is a concept-level planning and feasibility study that makes identification of potential near-term projects within a two-year timeframe and makes provision of long-term 20-year on-Airport general land-use guidance. This master plan is adherent to FAA Advisory Circular No. 150/5070-6A and makes identification of near-term projects and makes provision of long-term Airport general land-use guidance as well as making provision for a vehicle for participation of the community in airport planning through a stakeholder advisory committee.

The stakeholder advisory committee is to be comprised of community member and staff representatives which includes fixed-base operators, passenger and cargo lines, as well as flight training and light general aviation aircraft operators.

IV. Company Summary

Amfly Airline PLC (a.A. Plc), a major airline operator in Western Europe, has just purchased 60% of the shares in Eastern Pride Airways Ltd. (EPA Ltd.) from the thirty-year-old widow of the founder who died one month ago. The widow's two stepsons own the remaining 40% of the shares. The elder son, the Managing Director, holds 25% and the younger son, the technical director, holds 15%. EPA Ltd. is a low budget airline that operates on Europe Middle East lucrative routes.

Routes

The Europe-Middle East lucrative route is a major route for a.A. Plc but overhead costs is making the route a burden. Their purchases of EPA Ltd. might mean that they can operate on the Middle East route at a cheaper cost and continue providing a very rapid reliable service to their customers.

Because of the local difficulties (especially the recent 'Ash cloud' saga in Europe last year) and increased landing cost in Western Europe airports, a.A. Plc proposes to close its entire Western Europe operations and relocate its headquarter to Dubai, United Arab Emirates. The transfer will require a new hub centre in Dubai. The remaining a.A. Plc old office building in Western Europe would be sold off, possibly for housing development.

Pilots, Cabin Crew Employment

All current pilots and fifty-percent of the cabin crews would be offered jobs at the new Dubai Headquarter but most of the general administrative staff and the remaining fifty-percent of the cabin crews would be surplus to requirements and would be made redundant. The whole move must be made soon without affecting customers' summer travels. The project is only at the concept stage and no work has yet been done or decisions taken.

Less than a third of the admin staff are in a union but the cabin crews are fairly militant; so far there has been lack of support from members for industrial action. Included in the plan will be the following: (1) purchase price per share; (2) number and type of airplanes used; (3) price of real estate sold and purchased; (4) number of pilots and cabin crew; and (4) number of administrative staff.

V. Merger Summary

Merger costs will include:

(1) sufficient cash reserve provision for ensuring timely payment of leasing and finance payments as well as operating costs of the aircraft through at least the first six months of operation.

(2) Costs related to marketing, advertising and public relations including the costs of setting up a website that is capable of offering flight and fare information as well as online sales and marketing via the Internet including convention print advertising and broadcast advertising and public relations.

(3) Costs associated with training, recruiting and certification of light and ground operational crews.

(4) Reserve for covering overall operating costs and this is other than the costs associated with operations for the first six months of airline operations.

(5) Administrative costs and legal costs incurred in business setup and the setup of the airline operations.

VI. Risk Assessment

The United Arab Emirates is a nation with a population of 5 million and is located on the border of Saudi Arabia. This area has undergone rapid modernization since it was founded in 1971. The UAE is strategically located and demand in the UAE for commercial airplanes is stated to be high. (Sell, 2009) the GDP for the UAE in 2008 was $184.3 billion and ranked 56th in the world. The GDP growth rate is stated at 7.4%. The UAE is inclusive of the city of Dubai stated to be the "most populated city" and "home to the region's largest banks and financial institutions." (Sell, 2009) There are reported to be "a number of UAE banks…active in the aircraft-financing sector. The banks have tended to focus on Gulf airlines with which they are most familiar." (Sell, 2009) the UAE is also home to several large aircraft leasing companies including DAE Capital and Abu Dhabi-based Waha Leasing. It is hoped that sovereign funds will result in an increase in investment of aircraft financing. Presently the Emirates group which is based in Dubai and a government backed company is the primary holder of Emirates Airline providing service to more than 92 destinations in 59 countries worldwide with a fleet comprised of 105 aircraft. Emirates Airline is the primary competition of the newly formed airline presented in this project. (Plunkett Research, 2008)

VII. Keys to Success of the Airline

The keys to success of the airline are determined and identified as follows:

(1) Employment of a highly professional management team that is experienced and combines the elements of financial ability, realistic outlook, solid aviation business knowledge, familiarity with as well as belief in the use of benefits of latest technologies of aviation, electronic and technologies as well as knowledge of the regions and the markets to be served.

(2) Maintain the flexibility to ensure the airline's ability to respond and adapt to changing conditions of the market and opportunities without being erratic and to employ the equipment along with staffing and scheduling on a basis that efficiently ensure the job is done correctly, efficiency and with a high rate of return for the airlines. This should be accomplished without costly excess passenger and flight capacity of in contrast a high rate of scheduled flight operations cancellation.

(3) Identification and development of quick and cost-effective opportunity exploitation for new markets, new marketing concepts and sales potential that is expanded.

(4) Supplementing of passenger service that is regularly scheduled and special cargo services in the case of sufficient existing demand and as well seasonal peak-periods.

(5) Seeking combination of the core aviation business with marketing concepts and activities as well as ground-based operational support, supplementation and to complement the aviation business elements. (Plunkett Research, 2008)

VIII. Communications and Technology

The work of Zalzala and Udaipurwala (2010) states that information technology has become an integral part of all modern day enterprises. It has become the backbone of all major business processes and a strategic tool utilized by many organizations in achieving competitive advantage that is sustainable in nature. (paraphrased) it is additionally reported that modern enterprises are "extensively dependent on it for business automation." (Zalzala and Udaipurwala, 2010) Needed in this project will be storage, processing capacity and business logic. Service Oriented Architecture are stated to include several layers including the following:

(1) Enterprise Layer;

(2) Process Layer;

(3) Intermediary Layer; and (4) Basic Layer.…

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