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Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The “New Business Class”
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The New Business Class
• Ad-hoc business travel• Regular business travel• Connection to long-haul flights• Leisure travel• Light freight and parcels
WHAT’S THE POINT…
Focus on Purpose
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
Business Rational
Low Cost
High Cost
Basi
c Serv
ice
Perso
nalise
d S
erv
ice
LOW COST CARRIERS LEGACY CARRIERS
PRIVATE CHARTER
UNCHARTERED
TERRITORY !
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
Business Rational
Low Cost
High Cost
Basi
c Serv
ice
Perso
nalise
d S
erv
ice
LOW COST CARRIERS LEGACY CARRIERS
PRIVATE CHARTER
Business &
Leisure
New Groupof Travellers
VVIP’s& Select Few
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
Business Rational
Low Cost
High Cost
Basi
c Serv
ice
Perso
nalise
d S
erv
ice
LOW COST CARRIERS LEGACY CARRIERS
PRIVATE CHARTER
Passenger
Migration
BUSINES
S
CLASS
ECONOMY CLASS
FIRSTCLASS
New technology, material and manufacturing processes have reduced the cost and increased performance of aircraft, making new applications viable
New Groupof Travellers
VVIP’s& Select Few
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
• Ad-hoc travel demand predicted to increase as the region comes out of recession
• Several premature attempts have failed resulting in fleet availability
• Airport security makes traditional business travel impractical
• The geography and regulatory structure, makes Europe operationally ideal
The European market ready for the service
“The New Business Class”
SHORT SECTOR AIR TAXI…
predictably !
500m inhabitants In 27 countriesover 4.5m sqkm andpr capita income between€5,500 - €55,000
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
“The New Business Class”
• Considerable time saving– Airlines restricted by slot availability at large airports– Security issues makes scheduled travel time consuming and frustrating
• Substantially cost savings compared to traditional charter operators and scheduled packages
• Flexibility – Departure/arrival times to suit– Smaller airports with executive ground handling
• Personalised service
PASSENGER PROPOSITION…
So, are Light Jetsand air-taxia “no-brainer “?
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
“The New Business Class”
1. Critical mass2. Pricing3. Utilisation4. Crewing5. Perception
THE 5 HURDLES…
...also the main ingredients
for the success of LCCs!
Availability at short notice; without failBased on a functional product; not a luxury
Crewing hours, positioning and maintenanceRecruitment, training and retention
An environmentally unfriendly luxury
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The Hurdles
1. CRITICAL MASS…
Passengers need to go to where they need be from where they are and often at short notice• Define Market• Pre-position aircraft• Target Clients• PAX, parcels, organs, etc• Establish Basic Business
The New Business Class= Public Transport !
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The Hurdles
x3 Passengers, inc ground transport, airline tickets and accommodation
*) Full flex / Business class Pr sct:
Oxford (UK) – Bremen (D) €4,200 06:15
Limoges (F) – Graz (A) €4,150 07:30
Den Haag (NL) –Turku (SF) €4,650 08:00
Liege (B) - San Marino (I) €5,300 09:00
Halmstad (S) – Bern (SCH) €5,350 09:00
2. PRICING…
00:5001:20
01:45
01:0501:20
Light Jet
...but this is what
you’ll be
compared to !
This is the real value proposition...*
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The Hurdles
US charter rate examples*:€2,250/hr€1,500/hr€2,400/hr
EU sample rate:€1,850/hr+ €150/sct
*) based on 2:30 hrs utilisation
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The Hurdles
x3 Passengers, inc ground transport, airline tickets and accommodation
*) Full flex / Business class Pr sct:
Oxford (UK) – Bremen (D) €4,200 06:15
Limoges (F) – Graz (A) €4,150 07:30
Den Haag (NL) –Turku (SF) €4,650 08:00
Liege (B) - San Marino (I) €5,300 09:00
Halmstad (S) – Bern (SCH) €5,350 09:00
€3,385
€4,950
€6,775
€4,310€5,235
Air Taxi
00:5001:20
01:45
01:0501:20
Light Jet
2. PRICING…
...but this is what
you’ll be
compared to !
Charter rate at€1,850/hr+ €150/sct
*
-19%
+19%+45%
-19%
-2%
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The Hurdles
A relentless focus on cost reduction !• Productivity• Fleet financing• Maintenance programmes• Regulatory compliance management • Fuel buying• Recruitment and training
OUTSOURCING !
2. PRICING…
Without compromisingsafety and quality of service !
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The Hurdles
TECHNOLOGY SOLUTION !!!
Which aircraft to chose, considering:• Proximity to departure point• Destination site to base• Maintenance cycle• Crew hours• Aircraft utilisation
OPTIMISATION !
3. UTILISATION…
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The Hurdles
4. CREWING…
The crew is part of the product• So far, a VLJ currency has low perceived value• Limited crew availability• Little experience in type• Lower salary levels than Executive Jets• Pilots want to fly an A380 or a B787 Dreamliner
THINK OUT OF THE BOX !
“Boys” and toys !!!
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The Hurdles
5. PERCEPTION…
A mix of misunderstanding and misconception• Unjustifiably expensive• Luxury for the few• Not compatible with the (client’s) business• Lifestyle with no value• Environmentally damaging
PERCEPTION = REALITY !
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
Overcoming the Hurdles
• Clearly defined product and strategy – realistic tactical plan!• Critical mass to a select market – you only have to say NO
once!• Competitive pricing – price is a deciding factor!• Utilisation – the right balance between position
and revenue flights!• Crewing – focus on retention!• Efficient business – optimisation!
CRITICAL SUCCESS FACTORS…
THE MISSING PIECE...
A relentless focus on cost control !
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
Key Performance Areas
FOCUS ON MARGIN
Get the variables right
Price will drive demand
Cost management will drive profitability
Revenue flights will decrease with increased business
Margin is not linear
LOW
HI
GH
SMALL FLEET SIZE LARGE
PRICING
DIRECT & OPERATING COST
REVENUE FLIGHTS MARGINPR A/C
Not to scale
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
...how does the concept fit the market?STRENGTHS… WEAKNESSES…
OPPORTUNITIES… THREATS…
• Market potential
• Timing
• Aircraft availability
• Aircraft prices
• Barrier of entry
• Early entry advantage
• Diversification
• Legacy airline partnerships
• Scalable project
• Blocking competitors
• Further financial deterioration
• Potential levies & taxes
• Misguided “green” lobby
• Legacy airlines reactions
• Accidents
• Lack of available finance
• Crew availability
• Perception
• Time to critical mass
• Untested concept
The Market:
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
“The New Business Class”
TANGIBLE BENEFITS BEYOND CONVENIENCE…• Travel “Just-in-Time”• To and from where you are and where you want to be• Avoiding busy airports• Reducing wasted time• Value for money at affordable pricing
...winning concept from
the IT industry !!!
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
...another little known fact!
WALMART…
Walmart may be the best example of how to open people’s minds to business aviation
They are certainly not known for their spendinglargesse and might even be considered cheap :-)
Yet, they operate one of the largest business aviation fleets in the world!
Some 25 aircraft fly almost 25,000 people a year to its 3,800 or so U.S. stores. Passengers include middle managers, store managers, buyers, inspectors and employees
…a Wal Mart
Global Express at
Stockholm
…a WalMartLearjet 35A at Quebec
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only
The new generation Light Jets
The Business Class
...an emerging opportunity for the new generation Light Jets to overcoming the hurdles
by adding the missing piece of the air transport jigsaw puzzle
PrivateJet
Regional
LCCs
Legacy Carriers
Low Cost
Air
Taxi
New
Business Case Summary – Strictly Confidential
© Mango Aviation Partners Ltd 2013Whitetail, NOW Airlines, Airmada, OPS Control and TETRA Finance are project names only