Airline Performance Review and Analysis
TKL Air Lines will be an American Airline that will be operating in the multiple routes across North America in the United States, Canada and Mexico. TKL will provide the cargo and passenger services serving more than 30 destinations. The company will also be serving up to 10 million customers yearly, and more than 1,500 customers for the daily flight. TKL's major activities will include inbound logics, operations, outbound logistics, services, marketing and sales. Our company will focus on the underserved and unserved routes to the meet the needs of the unmet market demands. We will be serving the niche market where the market demand is generally unmet to meet the key traffic demand on some key seasonal, regional and variable routes. Moreover, we will integrate the latest information and electronic technologies to enhance maximum efficiency as well as cutting the marketing and operating costs.
Mission Statement
Our mission statement is as follows:
We will be filling up the niche markets in the cargo and travel market across North America in the United States, Canada, and Mexico. We intend to achieve profitable and high achievement by serving the key routes that are currently unserved or poorly served where a significant unmet passenger and cargo demand exist. We intend to enhance efficiency and enhance the quality control by delivering the highest level of operations, service and safety for all passengers.
General Strategy
The TKL Airline will use the latest aircraft to take the advantage of the regional route using the latest aviation technologies to improve efficiency as well as enhancing customer satisfaction. We will also use the latest navigation equipment to achieve a high level of punctuality, reliability, customer satisfaction and safety. Our start-up costs will be apportioned in the following areas:
First, we will lease three regional jet aircraft with middle-to-large-size having the 99-seat British-made jet. We will also buy additional two Avro jets that include RJX85 or RJX100. We will assure the timely payment of the aircraft based on our sufficient cash reserve, and we will finance our operating costs in the first six months. We will set aside the marketing costs, public relations and advertising costs. We will also set aside the costs to set up our website that will offer online sales, internet marketing and reservations. We will also set aside costs of training, recruiting and the costs of certifying the ground and flight operational crews. We will use our cash reserve to cover our operating costs within six of starting the operations. We will also use the cash to cover the legal and administrative costs for our business operations. Our start-up expenses are revealed in Table 1 below:
Table 1: START-UP EXPENSES ($000)
Start-up Expenses
Legal & consulting
$200
Route & market study
$100
Office supplies, stationery etc.
$10
Brochures & marketing materials
$30
Design consultants
$60
Corporate insurance
$20
Office rent
$50
Software & systems development
$100
Expensed equipment & office furniture
$150
Eight Expensed vehicles
$100
Public relations & advertising
$80
Crew, staff training & manuals
$60
Other
$30
TOTAL START-UP EXPENSES
$990
Start-up Assets
Cash Required
$10,400
Start-up Inventory
$150
Other Current Assets
$50
Long-term Assets
$200
TOTAL ASSETS
Financial Analysis
We will use the market research through observation, economic segmentation, interview with airline professionals and future projections to identify our customers and the airfare to charge. We will use the industry average airfare to charge the customer. Our target customers will be as follows:
• Business travelers - 15%
• International Organizations and Government travelers - 10%
• Leisure and regional Resident Personal travelers - 20%
• Leisure and diaspora personal travelers - 10%
• Leisure and personal travelers - 5%
• Seasonal holiday travelers - 10%.
Table 2 provides our market analysis for the next five years:
Table 2: MARKET ANALYSIS
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
Potential Customers
Growth
CAGR
Reg Res Pers & Leis
20%
130,000,000
156,000,000
187,200,000
224,640,000
269,568,000
20.00%
Business
15%
5,000,000
5,750,000
6,612,500
7,604,375
8,745,031
15.00%
Government & IO
10%
1,500,000
1,650,000
1,815,000
1,996,500
2,196,150
10.00%
Diaspora Pers & Leis
10%
10,000,000
11,000,000
12,100,000
13,310,000
14,641,000
10.00%
Seasonal Holiday Traveler
10%
20,000,000
22,000,000
24,200,000
26,620,000
29,282,000
10.00%
Personal & Leis
5%
260,000,000
273,000,000
286,650,000
300,982,500
316,031,625
5.00%
Other
20%
5,000,000
6,000,000
7,200,000
8,640,000
10,368,000
20.00%
Total
10.82%
431,500,000
475,400,000
525,777,500
583,793,375
650,831,806
10.82%
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