Escolar Documentos
Profissional Documentos
Cultura Documentos
ENTREPRENEURSHIP
BUSINESS PLAN
Prepared By: Nafees Imtiaz 102 0009 030 Abdullah Al Zubair 082 044 030 Al Inzamam Akhtar 101 0676 030 Salman Daud 101 0600 030 Mohammad Towaha Sakin - 091 0218 030
Prepared for:
Abdullah Al Mamun (Ahm) Lecturer, North South University. MGT368 Section 1
Page | 2
INDEX
Topic
Page no.
EXECUTIVE SUMMARY
COMPANY OVERVIEW
21
MARKET OVERVIEW
24
25
MARKETING PLAN
27
31
FINANCIAL PLAN
39
CONCLUSION
42
APPENDIX
43
Page | 3
EXECUTIVE SUMMARY
Ababil Airways is a new low cost consumer airliner in its formative stages. It aims to locate in Dhaka city, with its head office based on Gulshan area and hub in Hazrat Shajalal International Airport, Dhaka. This report has been prepared to illustrate a carefully detailed Business Plan for starting our company. The major highlights of this report includes a Company Overview, which includes the Mission and Vision Statement of our company as well as Key services and strategies, Industry Analysis and Market Overview of our company, Value Chain Analysis and Operation Plan, Marketing Plan and HR Strategy and lastly, a Financial Plan, showing the projected profit and loss for 5 years, as well as a Balance Sheet, showing the amount of capital required, which is Tk. 114,093,750. Ababil Airlines looks forward to start its operations by providing low cost passenger transportations in the following routes: i. ii. iii. Dhaka to Chittagong Dhaka to Sylhet Dhaka to Cox's Bazar Chittagong to Dhaka Sylhet to Dhaka Cox's Bazar to Dhaka
The pivotal competitive advantage of Ababil Airways is its extra-ordinary low fares for the customers, which will be possible due to its low cost business strategies. High aircraft utilization, productive, skilled and multi functioning employees, no frills, courteous but limited passenger service with an aggressive and focused management structure should allow it to reach its goals. Market factors favour inauguration of a new airline in Bangladesh to meet the demand for domestic passengers linking the major cities with fast mode of air transportation. This new airline will base its business and marketing strategies on achieving high and profitable, load factors through absorption of unmet demand, on which high unmet demand currently exists or can be readily developed. Market research shows that "mean-and-lean" operations in Bangladesh airline industry while still meeting the needs and desires of the traveling public, with the low fares, will not only survive, but can prosper.
Page | 4
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.
The characteristics leading to the success and profitability of this new carrier will be:
Provision of low cost but high-quality service on domestic routes that currently are poorly served, or under-subscribed by existing carriers, thereby setting both a new trend and a new pace in air service in the country.
High Aircraft Utilization: Implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity.
Low Fare, No Frills: Providing guests with the choice of customizing services without compromising on quality and services.
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.
Ensuring a low cost, friendly, cooperative, enjoyable, yet highly professional face to the customer. In short, the goal of this new airline is to be known to the passenger by its proposed tagline, Low Fares. Superior Service.
Page | 5
Rate of Return
20 15 10 Rate of Return 5 0 2012 -5 2013 2014 2015 2016 2017
The above chart shows the Rate of Return our company will be generating for the next five years. Initially, for the first two years, we will be incurring negative rate of returns, but from 2014 onwards, we will be having positive returns. This shows that, the feasibility of our company is high and the future prospects of our company are profitable.
Page | 6
Page | 7
COMPANY OVERVIEW
Name: ABABIL AIRWAYS Tagline: Low Fares. Superior Service. Mission Statement: To offer our customers the most cost effective air transportation service ensuring the best quality, every day. Vision Statement: To be the best low cost airline in the country- in the eyes of our customers, shareholders, communities and serve people who are currently underserved with poor connectivity and high fares. Values Commitment to Safety In each decision and each action, every time, every day. Honesty, Trust and Integrity In all actions with one another, our suppliers and our customers. Technical excellence and continuous learning We strive to do it right, then we improve to do it better. Compliance with Regulatory Standards In all actions and all decisions, every time, everyday. Acting with purpose and urgency We make decisions to do the right thing and then act on it.
Page | 8
To get to the best result, together. Hard work We strive to do the difficult things that make our airline better than the others. Fun We are positive people who cherish success, learn from mistakes and enjoy our work. Profit We deliver a sustainable profit to support the growth and improvement of our company.
Company Guidelines for Employees Employees should be courteous, well behaved, respectful to all stakeholders of the company, esp. the passengers Employees must not disclose any confidential information about the company to any external sources including the press, employees of other companies or family members Employees should not discriminate between persons based on reasons of race, creed, sex, social status, religion, nationality, age or physical or mental disability Employees must comply with all applicable laws and regulations of Bangladesh, and perform their tasks with ethics and responsibility All assets, funds, inflows and outflows must be recorded in the books Bribes or illegal payments of any sort are strictly prohibited Alcohol in any form and usage of drugs, except under medical advice, is prohibited Employees are expected to maintain a productive work environment free from any sorts of harassment and disruptive activities, which include:
Page | 9
a) Unwelcome remarks or jokes about issues such as race, religion, disability or age b) Displaying racist or other offensive pictures or posters c) Inappropriate physical contact such as touching, patting, pinching or punching d) Physical assault e) Employees should give utmost priority to cleanliness of work areas f) Threats, intimidation and verbal abuse
Corporate Social Responsibility Ababil Airways have a longstanding commitment of addressing the needs of the society, in view of its belief that for any economic development to be meaningful, the benefits from business must trickle down to the society at large. Ababil Airways thinks that the corporate goals must be aligned with the larger societal goals. The following are some of the societal responsibilities that the company looks forward to undertake: Education Supporting local primary schools that provide education to underprivileged children Merit-based scholarship programs for underprivileged students
Community Employment quota for disabled people Sponsoring local activities that benefit the youth of the area
Health Free eye clinics in remote villages Blood donation programs in all the divisions
Environment Environment friendly engines in all the aircrafts ensuring less carbon emissions Go Green Project-creating awareness among the employees about the environment Reducing and recycling wastes Minimising air and noise pollution
Page | 10
Online reservations (e-reservations) and sales (e-sales) that will provide quick and easy access to airline schedules, flight availability, reservations, and ticketing to a wide range of customers. This eliminates payment of agency commissions and shall keep overall costs low - savings that can be passed on to the customer.
Baggage handling services will be provided to all customers in all the airports. Electronic ticketing (e-ticketing) which will enable passengers to obtain their tickets online and avoid the need to obtain paper tickets from airline offices, travel agencies, or at the airport. It also frees the airline from having to stock, track, and issue tickets and maintaining paper trails of them. Again, more savings for both the airline and the customer.
Electronic check-in (e-check-in) that will virtually eliminate waiting in line to check-in for e-ticketed passengers, enabling them to confirm their identities, obtain their boarding passes, and check-in their baggage (and even purchase tickets upon check-in) utilizing a user-friendly kiosk that eliminates those last-minute frustrating waits to get to the counter. And it also greatly reduces the airline's needs to staff check-in desks, control long lines, employ local contract ground staff, and expend money and resources on an antiquated system that only adds to the traveler's inconvenience and frustration. Another win-win situation for both airline and passenger.
Comfortable economy class seats. Seats in this cabin feature seats ranging from 20 inches (51 cm) to 20.9 inches (53 cm) in width. Seat pitch on this cabin class is 3132 inches (79 81 cm) 3132 inches.
Page | 11
KEY STRATEGIES
Ababil Airways make the low fare model possible and create values through the implementation of the following key strategies: Key Strategies i. Safety First: Partnering with the worlds most renowned maintenance providers and complying with the world airline operations. ii. High Aircraft Utilization: Implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity. iii. Low Fare, No Frills: Providing guests with the choice of customizing services without compromising on quality and services. iv. Streamline Operations: Making sure that processes are as simple as possible. v. Lean Distribution System: Offering a wide and innovative range of distribution channels to make booking and traveling easier. vi. Point to Point Network: Applying the point-to-point network keeps operation simple and lower costs.
Page | 12
BUSINESS MODEL
Ababil airways looks forward to changing the definition of airline industry that air travel is a luxury and it is only for the upper segment of the population. The key objective of Ababil Airways is to increase our reach and provide the services to a large segment. Ababil airways follows the Low-Cost-Carrier business model in the airline industry, which can be characterized as below
Simple Product
Catering on demand for extra payment Planes with narrow seating and only a single class
Positioning Both business and non-business passengers, especially leisure traffic and price-conscious business passengers Point to point frequencies traffic with high
Aggressive marketing
Low wages Low airport fees low aeroplane rent cost Low costs for maintenance, cockpit training and standby crews due to homogeneous fleet High resource productivity
Page | 13
Page | 14
system. The rules given by NBR (National Board of Revenue) will be followed in terms of Tax related issues. Tax payment will be made as per governmental taxation system and time period. Employment Laws: The Employment of Labor Act, 1965 will be followed for
ensuring the implementation of employment laws of Bangladesh. Employees will be maintained as per laws systems. Environmental Regulation: The Company will try to maintain a living friendly
environment. Political Stability: Although there are some political instability in Bangladesh, the
company will adopt some policies against these political instabilities. Route Charge: Increase of route charge by the government
Trade Union: Increase in trade union pressure Government policies :Change in government policies and regulations which will
definitely affect Aviation Industry carrier Tourism: Increase in tourism will work in favour for Ababil Airlines- as it is a low cost
Economic Factors:
Economic Growth: The economy of Bangladesh is a rapidly developing market-based
economy. Its per capita income in 2010 was est. US$1,700 (adjusted by purchasing power parity). The economy has grown at the rate of 6-7% per annum over the past few years. So, the company can go with their low cost services at this type of economic growth easily.
Page | 15
Interest Rates: The interest rate in Bangladesh is a little bit higher than outside money
market. Current borrowing rate is decreased to 12.51% and also lending rate is decreased to 12.51%. So, the company will not have trouble to deal with financial issues related to interest. Price Ceiling: High price ceiling of petroleum products & fuels increase costs of
production. Unemployment Rates: Unemployment rate slash down to 8.7% in 2011. Exchange rates: Depreciation of Bangladeshi Taka. Fuel Costs: Energy and fuel costs are cause of uncertainty.
Social Factors:
Health Consciousness: The Company will adopt stringent health consciousness
policies. It will ensure medical facilities for its employees and customers. Population Growth Rate: According to World Bank, Bangladesh has a population
growth rate of 1.1% per annum. So, the company will have the opportunity to bring new exciting services at low cost for the increased population. Life style: Increase in travelling life style
Prosperity: As the economy is increasing at this moment prospects are now more
interested to fly for vacation which will help our Airline Industry.
demographic of prospects. . Emphasis on Safety: The Company will introduce Aviation Safety Action Program
(ASAP). The goal of the Aviation Safety Action Program (ASAP) is to enhance aviation safety through the prevention of accidents and incidents.
Page | 16
Technological factors:
Research and Development Activity: The Company will implement airport technology research and development program. In this program the role of airports will be to accommodate the increased traffic safely. The Environment and Energy Research & Development program of Ababil Airlines will try to reduce significant community noise and air quality emissions impacts in absolute terms, reduce the impact of aviation greenhouse gas emissions on global climate (including the rate of fuel burn), improve energy efficiency (including air traffic operations and alternative fuels development), proactively address other environmental issues. Fuel efficiency: High fuel efficiency, less noise pollution and lessening of carbon
emission by the supplier Boeing Technological expansion. Internet competition being raised Web sales/services. Low fuel consumption cars. Online check-in, self service checks at Airports for Ababil Airways passengers which might be too technical but in tune with our prospects which may make them unhappy. By using proper technology a company can reduce its costs effectively and also can maintain good relationship with customers.
Page | 17
Page | 18
terms of prices, technology, in-flight entertainment, customer services etc. Highly competitive industries generally earn low returns because the cost of competition.
COMPETITIVE ADVANTAGES
With the Low Cost Carrier Ababil Airways have the following competitive advantages over the competitors in the airline industry, which can be summarized in the following diagram.
Page | 19
SWOT ANALYSIS
To figure out the internal factors such as strengths and weaknesses, and external opportunities and threats to business objectives, a SWOT Analysis of Ababil Airways is conducted and shown below: Strengths i. Low cost operations ii. Fewer management level, effective, focused and aggressive management iii. Simple proven business model that consistently delivers that lowest fares iv. Penetrate and stimulate to potential markets v. Multi-skilled staffs means efficient and incentive workforce vi. Single type fleet minimize maintenance fee and easy for pilot dispatch
ii. Limited human resources could not handle irregular situation iii. Government interference and regulation on airport deals and passenger compensation
Opportunities i. Huge market share ii. Adding customer services or operation as full service airline with low fares iii. New routes and airport deals iv. Unprofitable competitors
Threats i. Full service airlines start cut costs to compete ii. Entrance of other low cost airlines iii. High fuel price decreases yield iv. Accident v. Aviation regulation and government policy vi. Increase in operation cost.
Page | 20
GROWTH STAGE DEMAND TIME FOR ABABIL AIRWAYS This analysis is very essential for every organization as it gets into the particular market or an industry and gives a brief analysis. Ababil Airways has to strategize in accordance to the market growth, opportunities, industry's entry barriers, competitive level and product differentiation. Outcomes The scenario of Bangladesh airline industry is in growth stage' Motives behind it: 1. High-end competition 2. Low entry barrier
Page | 21
3. Growth is high Strategy of low-cost competitor is likely to continue lively in the marketplace.
CORE COMPETENCIES
a) Low cost. b) Effective, focused and aggressive management c) Multi-skilled staffs. d) Online booking e) Point to point routing f) Operation of On-Time delivery g) No Frills Strategy h) Route policy strategy
Yield Management System (YMS) Anticipates and reacts to the behavior of customers to maximize the revenue - taking into account the operating cost and shall aid Ababil Airways to optimize prices and allocate capacity to maximize the expected revenues by 2 levels: a) Seat Seats are available at various prices in different points of time. A reservation done at a later date will be charged more than the one done earlier for the same seat
Page | 22
b) Route By adjusting prices for routes / destinations that have a higher demand when compared to others. Results increased revenue (3-4%) by taking advantage of the forecast of the high / low demand patterns,lower prices as YMS has aided Ababil Airways to increase the revenue by offering higher discounts, more frequently during off-peak times while raising prices only marginally for peak times. Computer Reservation System (CRS) An integrated web-enabled reservation and inventory system suite that includes Internet, call center, and airport departure control functionality. Satisfy the unique needs of Ababil Airways implementing a low-cost business model to transform the business process to efficiently streamline operations. Enterprise Resource Planning System (ERP) An integrated ERP solution powered by Microsoft Business Solutions (MBS) on Microsoft technology platform which is implemented by Avanade consultants in May 2005. With the robust ERP technology platform, Ababil Airways is able to successfully maintain process integrity, reduce financial month-end closing processing time, speeds up reporting and data retrieval process.
Page | 23
MARKET OVERVIEW:
In Bangladesh, the market power of airline companies for local or regional traveling is not too high. It is well known that Bangladesh is a poor developing country in which per capita income is below 2 dollars. So the potential customer base is not very strong.
TARGET MARKET: We divide the market share of the company based on two issues: 1. Income: Mainly people whose monthly income is 40,000 thousand taka minimum use airline for local traveling. The pie chart of market segment based on income level is given below:
5%
10%
2. Profession: This is a market segmentation based on profession. In Bangladesh, the business people and the service holders mainly travel by airlines, which includes many foreigners. For domestic traveling, the pie chart will give a clear view of that the category of professions and their percentage of traveling.
Page | 24
5%
providing
maintenance,
inspections,
upgrades,
re-fits,
inventory
Future Competencies
Ababil`s unique resources are its human resources that are its employees. It can build on this resource by training and developing its existing staff in their jobs to increase their skills and for achieving excellence in service delivery. It also an impressive number of fleet which it can further increase by purchasing new carriers for business expansion.
Ababil Airways can further develop its customer services by developing and delivering standardised way of delivering customer service throughout the organisation. This will enable everyone to deal with customers in the Ababil Airway`s way. It can also negotiate cost effective agreements with airports to reduce costs and avail tax incentives from them.
Competent leadership. This can further be improved by encouraging new and young talent and by training and developing key employees to become tomorrows leaders. Ababil aims to hire knowledgeable pilots. These pilots need to keep themselves informed of the changes in international flying regulations to efficiently do their jobs.
Equipment
We will be leasing three Dash-8-Q 300 planes from US-based commercial aircraft leasing and financing firm GE Capital Aviation Services (GECAS) for 5 years.
Value Chain
To better understand and analyze the specific activities through which Ababil Airways can create a competitive advantage, a value chain analysis for airline industry has been conducted as below to model Ababil Airways as a chain of value creating activities. The goal of these activities (Inbound logistics, Operations, Outbound logistics, Marketing and Sales, and Service) is to create value that exceeds the cost of providing the product or services, thus generating a profit margin.
Page | 26
MARKETING PLAN
Ababil Airways targets the travellers who look for low cost flights. The company promises low cost but the best service fordomestic traveling.
The company targets customers from various income brackets. To make tickets easily available Ababil Airways sells it online. The marketing will be in commercial T.V. channels, radio, business magazines etc. To advertise Ababil Airways the company targeted some magazines which are very popular to the business people and also by the service holders.
Page | 27
Distribution:
Initially we will start the business with three routes and we will take fewer passengers because we are new in this business. To keep things simple, our tickets will be available for online purchases only. No travel agencies will be used to avoid commission expenses. There will be no ticket counters in any airports as a part of the low cost strategy.
Initially, we would distribute 20,000 leaflets in major city centre sites in Dhaka, Chittagong, Sylhet and Cox`s Bazar. After that we would not engage in any direct promotional campaign throughout the next year. This decision is taken with regard to the fact that the company and its service, although has an identified market, will start off in a small scale. Then, after break-even and profit making, the company will think of going larger-scale. So, initially due to the small size of the business, we would not go for more promotional campaigns for feasibility purposes.
We can also arrange some TVC advertisement so that every potential customer gets to know about Ababil Airways and its low cost service. When our business will carry its full fledged activities, we will gain some loyal customers who will always travel through us, we can offer them the privilege card which will contain 10% discount in every flight. For that reason we will specially have to focus on the business people. It is also true that students are also our main target customers, but we have to give special attention to our corporate businessmen, they travel everyday and they need a low cost airplane service that will serve them the most and will cost them less. So here we are, Ababil Airlines to help them satisfy their needs and attract them will some new and exciting promotional features.
Page | 28
We will also give some discounts to all our customers during the month From October to December and also during the month of Ramadan. Thats how we will carry our promotional campaigns and advertisings. Customer Service : We will have special arrangements for the customers who will travel in our airlines. We will provide paid foods inside the aircraft and we will also provide the foods for free to our privilege card holders. As our business is low cost, so the lowest possible plane fare would be the main service for the customers.
PRICING
The base fares of our flight services are as follows: ROUTE Dhaka to Chittagong / Chittagong to Dhaka 2800 B.D.T TICKET FARE
2500 B.D.T
3350 B.D.T
Page | 29
The company will also follow a tier system for pricing. We shall adopt a simplistic fare structure based on time value relationship for seats. The earlier the customer books, the cheaper will be the fare will be. There are 12 fare buckets, each bucket is priced according to our specification. The first few tiers are targeted to value conscious passengers, but they can only get their hands to extremely cheap tickets if they book way ahead of time. The mid tier buckets target the captive market. Ones the revenue collected is sufficient to cover all the operational costs to the flight, the system will then move to the top tier bucket. This is when prices will start to creep up and our profit grows.
Page | 30
Employer branding It is defined as the image of your organization as a great place to work". Employer branding creates this image. The company will try to increase the image of Ababil Airways so employee will find it as a great place to work .
Recruitment process
Recruitment refers to the process of attracting, screening, and selecting a qualified person for a job. All companies in any industry can benefit from contingency or retain professional recruiters or outsourcing the process to recruitment agencies.
Recruitment process in ABABIL AIR WAYS Initial selection Substantive selection Contingent selection
Page | 31
Initial selection: Its goals are to use for preliminary rough cut to decide whether the applicants meets the basic qualification for a job . Example: applicants form , background check
Substantive selection: Its goal is to determine the most qualified applicants from among those who meets the basic qualifications Example: written test, performance test, interview.
Contingent selection: Its goal is to make final check before making offer to applicants . Example : drug test , background check .
In the field of human resource training and development is the field which is concerned with organizational activity aimed at bettering the performance of individuals and groups in organizational settings. It has been known by several names, including human resource development, and learning and development
Page | 32
Types of training
In our airline we give four types of training. The four general skill categories are :
Basic literacy skill Technical skill Interpersonal skill Problem solving skill And new addition of training is ethics training.
Ababil Airways trains its flight crews to the absolute highest standards in the industry. Pilots with corporate and airline experience are considerately selected to operate Ababil Airways premier aircraft. These flight crews are then provided with the highest quality initial and recurrent flight training at FlightSafety International, the most highly regarded flight training school in the world. At FlightSafety our pilots go through rigorous simulator and classroom sessions taught by the most talented aviation professionals in the industry. These lessons are taught to advance our pilots overall knowledge in the aviation industry and more specifically the aircraft we fly, the Hawker 400xp. To conclude training, our crews are evaluated by FAA examiners who test their skill and knowledge in the classroom and the simulator. This training is repeated on a semiannual basis guaranteeing that when you fly with Ababil Airways you are getting a meticulously trained top quality flight crew.
Performance appraisal
Performance appraisal, employee appraisal, performance review, or (career) development discussion is a systematic and periodic process that assesses an individual employees job performance and productivity in relation to certain pre-established criteria and organizational
Page | 33
objectives. Other aspects of individual employees are considered as well, such as behavior, accomplishments, potential for future improvement, strengths and weaknesses, etc.
The three most popular sets of criteria of employee the company shall evaluate: Outcomes Behaviors Traits
Written essay Critical incidents Graphic rating scale Behaviorally anchored rating scale Forced comparison
Page | 34
A 5 days work a week Performance bonus Long service awards Examination leave Career progression opportunity for employee health and wellness
Hospitalization and surgical expense Personal accident and term life insurance coverage Food and drinks subsidies
Paternity leave Compassionate leave Hospitalization expense for employees spouse and children.
Page | 35
Structure There are six elements that managers need to address when they design their organizations structure:
Staff requirement
Page | 36
AUTHORITY OF PRINCIPALS:
Name Nafees Imtiaz Abdullah Al Zubair Al Inzamam Akhtar Salman Daud Mohammad Towaha Sakin
Specialization Finance & Accounting Finance & Marketing Finance & Accounting HRM Marketing
Graduated From North South University North South University North South University North South University North South University
Page | 37
Page | 38
FINANCIAL PLAN
Projected Income Statement
Year 2012 Sales Less Variable Costs Contribution Less Fixed Expenses Office Rent Plane Rent Admin Overhead Utilities Salaries Membership Fees Promotional Budget Maintenance Total Overhead
Total Profit Before Tax
Year 2013
Year 2014
Year 2015
Year 2016
Year 2017
354,750,000 372,487,500 391,111,875 430,223,062.50 473,245,368.75 520,569,905.63 236,500,000 248,325,000 260,741,250 286,815,375.0 315,496,912.5 347,046,603.8 118,250,000 124,162,500 130,370,625 143,407,687.50 157,748,456.25 173,523,301.88
1,200,000 90,000,000 6,000,000 120,000 2,400,000 120,000 12,000,000 12,000,000 123,840,000 - 5,590,000 - 2,096,250 - 3,493,750 -0.98% -3.06%
1,200,000 90,000,000 6,300,000 126,000 2,520,000 120,000 12,600,000 12,600,000 125,466,000 - 1,303,500 - 488,813 - 814,688 -0.22% -0.71%
1,200,000 1,200,000 1,200,000 1,200,000 90,000,000 90,000,000 90,000,000 90,000,000 6,615,000 7,276,500.0 8,004,150.0 8,804,565.0 132,300 145,530.0 160,083.0 176,091.3 2,646,000 2,910,600.0 3,201,660.0 3,521,826.0 120,000 120,000 120,000 120,000 13,230,000 14,553,000.0 16,008,300.0 17,609,130.0 13,230,000 14,553,000.0 16,008,300.0 17,609,130.0 127,173,300 130,758,630 134,702,493 139,040,742 3,197,325 12,649,057.50 23,045,963.25 34,482,559.58 1,198,997 1,998,328 0.51% 1.75% 4,743,396.56 8,642,236.22 12,930,959.84
Tax 37.5% Profit After Tax Net Profit Ratio Rate of Return
4.14% 18.89%
Forecasted Balance Sheet and Cash Flow Statement (Percentage of Sales Method):
Forecasted Balance Sheet: Current Assets: Cash Other Current Assets Total Current Assets Long-term Assets Licensing Office Interiors Office Leasing Plane leasing Total Long-term Assests Total Assets Current Liabilities Short-term borrowing Total Liabilities Paid-in Capital Retained Earnings Total Capital Total Capital and Liabilities Additional Funds Needed 2012 2013 2014 2015 2016 2017
10,000,000 12,000,000 22,000,000 11,100,000 3,000,000 1,000,000 100,000,000 115,100,000 137,100,000 15,000,000 15,000,000 125,593,750 - 3,493,750
10,851,130 13,239,266 24,090,396 12,155,072 3,073,726 1,008,104 248,212,626 264,449,528 288,539,925 16,968,983 16,968,983 125,593,750 5,595,552 131,189,302 148,158,285 140,381,640
11,124,819 13,646,678 24,771,497 12,498,489 3,095,686 1,010,466 391,416,265 408,020,906 432,792,403 17,638,279 17,638,279 125,593,750 19,999,279 145,593,029 163,231,308 269,561,095
11,386,335 14,040,199 25,426,534 12,828,576 3,115,936 1,012,624 715,152,539 732,109,675 757,536,210 18,295,673 18,295,673 125,593,750 41,550,878 167,144,628 185,440,301 572,095,908
11,447,315 11,799,115 3,025,370 3,049,942 1,002,819 1,005,519 128,188,865 172,304,132 143,664,369 188,158,707 166,352,178 211,543,516 15,634,249 15,634,249 16,290,459 16,290,459
Forecasted Cashflow Statement: Cash flow from Opearating Activities: Net Income Cash provided by changes in Current Assets and Liabilities: Increase in Other Current Assets Increase in Short term Borrowing Net Cash provided by Operating Activities Cash provided by changes in Financing Activities: Capital Expenditure Net Cash provided by Financing Activities Increase/Decrease in cash
2012
2013
2014
2015
2016
2017
- 3,493,750
- 814,688
1,998,328
7,905,661
14,403,727
21,551,600
0 0 0 0 0 - 3,493,750
Page | 40
2.82% 3.38%
2.76% 3.33%
2.70% 3.28%
2.52% 3.08%
2.35% 2.88%
Assumptions:
Sales are expected to rise by 5% for the first two years, and 10% from year 3 and onwards. Some short-term borrowing might be needed, in case of purchase of certain equipment or advance purchase of fuel, in case fuel prices rise.
Page | 41
CONCLUSION
Ababil Airways will be providing a whole new strategy that is not yet present in Bangladeshs Airline Industry, which is a no frills, lowest fare airline service that will capture our target market. We hope to hold this competitive advantage in the near future, by standing by our Mission statement, and carrying out the objectives we have outlined in the Plan. Our biggest strength is the size of our operations, which are small-scale. This gives us a better advantage in terms of Management and achieving low cost in every possible aspect of our operations. This gives us a further competitive advantage than our competitors, who not only provide Domestic air travel, but also International. This causes them to lose focus on their domestic goals, and gives us the chance to grab this opportunity to become the market leader in the Domestic air travel market in Bangladesh. Furthermore, as our financial plan shows, we have consistently achieved a positive net profit margin as well as rate of return, excluding the first two years of operations, which shows that Ababil Airways has the potential to be a highly profitable venture.
Page | 42
Appendix:
Variable Cost per Flight
Variab Particulars Fuel Co-pilot Air-Hostess Wage (2) Pilot Wage Maintenance Airport Charges Sales Commision 5000 10000 5000 110000 Cost 50000 10000 10000 20000
Total
Sales Calculation 30 passengers/flight 20 passengers/ flight 30 passengers/flight total Flights Per Week Day Sunday Monday Tuesday Wednesday Thursday Friday Saturday Number of Shifts 3 2 2 2 3 3 3 up/down up/down up/down 3 routes Zones 3 1 3 1 3 2 3 TOTAL
Total 75,000 60,000 30,000 165,000 Revenue per Flight 165,000 165,000 165,000 165,000 165,000 165,000 165,000
Total Flights per year 450 100 300 100 450 300 450 2150
Yearly Revenue 74,250,000 16,500,000 49,500,000 16,500,000 74,250,000 49,500,000 74,250,000 354,750,000
Page | 43