Airline marketing plan

Page 1 of 32

Airline marketing plan

By | August 2008
Page 1 of 32
Executive Summary

1.0 Executive Summary
Puddle Jumpers Airlines, Inc. is a new consumer airline in its formative stages. It is being organized to take advantage of a specific gap in the short-haul domestic travel market. The gap exists in low cost 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 demand for passenger travel on selected routes from Anytown indicates that a new entrant airline could be expected to capture a significant portion of current air travel business at that hub. The management of Puddle Jumpers is experienced in airline start-ups. Previously management grew Private Jet Airlines from a single Boeing 727 to a fleet of 16 MD80 series aircraft. Revenues grew to $130 million in a two year period from 1992 through 1993. Our research and projections indicate that air travel to and from Anytown is sufficient to provide a new carrier with revenues of $110 million dollars in its first full year of operations, utilizing six aircraft and selected short-haul routes. These sales figures are based upon load factors of only 55% in year one. Second year revenues are expected to exceed $216 million dollars with additional aircraft and expanded routes. Load factors for year two are 62%. The Puddle Jumpers plan has the potential for a more rapid 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 Jumpers's target market exceeds the demand that dictated Private Jet's growth. These sales levels will produce net profit of just over $1 million in the first operational year and $21.4 million dollars in flight year two. Profits in year one will be 1% of sales and will improve to 10% of sales with the economies gained in year two. The over-all operational long term profit target will be 16% of sales as net profit in years three, four, and...