Type of paper: Business Plan

Topic: Airline, Business, Company, Services, Aviation, Finance, Investment, America

Pages: 7

Words: 1925

Published: 2020/10/25

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Implementation, Evaluation, Controls

Executive Summary:
The world has been very demanding. Many people are very aware of what the technology can offer to them. And that is convenience. Convenience can also be felt through the ease of transportation. One of these is the aviation services. Market opportunities have supported the establishment of a new empowered and high quality aviation services for the United States. The linking of those past services into a newly developed synchronized airline could lead to a more efficient service to the American People (Andora, 2011).
In addition the new establishment of the airline is inclined with the highest technology present, high security commands and a more passenger-friendly aviation services. As most businesses’ core value, they combined all the work force’s passion, knowledge and effort to provide high quality service that is globally competitive and affordable to the masses (Oklas, 2008). American Airlines is an established company but has not yet tackle a credible and well accord business planning. This short business plan will give an insight on how to market and operate the airline.

Company Overview:

American Airlines is established by a combination and assimilation of other US airlines. It is an airline that caters international and domestic flights for the Americans. The route for the domestic flights is within the state and North America. International Flights include Asia, India, Europe, South America and the Caribbean. It has centers on 5 airports, including the John F. Kennedy Airport in New York, the Dallas airport, Miami, Ohio and lastly in Chicago. It also has a maintenance site located at Tulsa International Airport. The focal point of the company is located at Fort Worth, Texas (Lazarowitz, 2013).

Company Objectives:

The purpose of the business plan is to tackle new services for the American airlines. It is given in a timeline and is allotted with investment on marketing and equipment finances. The target of the company is to overhaul the existing system which offers a rather confusing aviation service. It could be factored by the assimilation of previous airlines and their old systems too. However, the business plan is also made to ensure the return of investment to be targeted in the next few years without sacrificing the quality of services. The main purpose of the investment is to improvise and renovate existing air buses, airport and airport services.
Additionally, the purchasing of the equipment and other machineries is directly included on the expenditures. It is also assumed that the wages of the staff and crews of the airline is included to the expenditure outline of the plan. Another assumption is that the promotional strategy must be fully operating. Other factors including market forecast is included in the implementation. Cross Impact analysis is done to have a better understanding of the market.

Marketing Strategies:

A team comprised of marketing agents shall form a concept of advertisement that focuses on the new airline services. High quality service, affordable flight fare, and then high end security will be the core values the advertisement will be presenting. Platforms such as the internet and the TV shall be used for the desired marketing methods.

Implementation Plan:

Financial Objectives and Milestones:
The airline is expected to market the new flagship aviation services to the Americans. The affordable travel routes, high technology and security services will be the focal point of the marketing strategy (Yeun, 2009). The scenario would lead to the investment of $1,000,000,000 for the first year. The following year would expect an investment amounting to about $350,000,000. The business plan has one breakeven point and is expected to be on the 2nd year of operation.
Figure 1
Figure 2
Forecasting the sales of the airlines would help the business plan to get the idea on how to recover the investment prior to the start of operation. It is expected that the breakeven point would be on the 2nd year of the airlines’ operation. The considered revenues are coming from domestic, international, cargo and chartered flights.
Figure 3
In a worst case scenario, the sales must be considered lower for if and only if stated hindrances such as natural calamities or aerial accidents would decrease the marketability of the airline. On the other hand, considering the best possible things that would be for the airline’s advantage, the gross profit shall increase. Figure 3 gives an insight on what could happened to the financial status of the airlines.

Success Factors:

As a mainstream airline company, the American airlines has the capability to excel in the market given that marketing strategies are applied all throughout the operation and contingency plans are very present for every scenario the company may face (Andors, 2013)

The following are the success factors of the company:

Marketability
Accessibility
Good Company Reputation
Good Economic Status
High Quality Services
High End Security
Cross-Impact Analysis:
Previously we have forecasted the sales that the company may have given that there are no major interruptions to the airlines’ operation. It is also evident that cross impact analysis on the possible damages the company takes must be accounted. This method is invented by Theodore Gordon with Olaf Helmer in the year 1966. This would help a business plan to have an insight on what other events may be doing to the operations of a planned business (Tulen, 2013).
The following table will be an assumption on what would be affecting the company’s operation accounted into an amount and will be directly seen to do some effects to the revenue of the company.
Given that the percentile of these damages including machinery failure, insurance cost, and wasted investment are very minimal. This would allow the business plan to have contingency plans in case of a scenario. Anticipation of such events can give an advantage to the company. Assuming that the collateral damages for the first year of operation would be 10% of the total revenue.

Evaluation

Given the sales forecast for the airlines, the marketing strategies such as advertising and online promotions and the direct response from them will be very relevant. In a way that it is like approaching the client’s in a personal process, immediate response is expected and measurable feedbacks are assumed to be given (Iacobucci, 2013).
The evaluation of the marketing strategy as well as the forecasting of the sales could be understood because there are many assumptions regarding the plan.

Return of Investment:

As the company continues its operation given that there are no interruptions, the breakeven point will be 1.6 years right after the establishment of the company. The calculation of the return of investment is basing on the expenditures and the revenues assumption of the business plan (Zerna, 2012).
(System Sales-COGS-Marketing Plan Expenditures)

Marketing Plan Expenditures

765,000,000-1,000,000,000-(0.1x First year revenue)1,000,000,000
The first year would be understandable to have less recovery rate but the second year expenditures vs revenue will give the return of investment for the company.

1,000,000,000-350,000,000-0.04x 2nd year revenue350,000,000

This would result to 174% recovery rate for the company. On a positive note the additional damages given on the cross impact analysis has contributed much less to the expected.

Scenario Building:

The expected collateral damages must be taken into account by the team to have an insight on what might happen to business operation. For an instance, if the airlines will be having an interruption in operation mainly because of typhoon warnings and other natural calamities, the damages including rebooking cost, bad feedbacks from the clients and machinery damages must be auctioned beforehand. And that follows the contingency plan.

Contingency Plan:

Having a plan B for most cases will give an upper hand to your business. In the case for the airline, it is much advisable that the damages given by natural calamities must be assessed. Prior studies on this matter will also enlighten the team on what to do. Bad client feedbacks and machinery damages are expected in these calamities. The airlines must be ready for any upcoming typhoons and coordinate with the country’s weather system as to lessen the damages. Accordingly, it must also devise a plan in informing the passengers on what will happen to their flights (Yeun, 2009).

References

Andora, O. (2011). “Business Blueprints.” A guide into International Businesses. 3rd Edition.
Iacobucci, D. (2013). MM4. Mason, OH: South Western Cengage Learning.
Tulen, I., (2013). “Cross Impact Analysis”. An Introduction. 3rd Edition. Tulion Publishing Ltd.
Oklas, R., (2008). Aviation Service and Technology. Empress Publishing Ltd.
Yeun, R. et al., (2009). Aviation safety management systems. Journal on Aviation Management. Retrieved from [http://www.inderscience.com/dev/search/index.php?mainAction=search&action=record&rec_id=67234&prevQuery=&ps=10&m=or]
Lazarowitz, Elizabeth (February 14, 2013). "American Airlines and US Airways merge to create world's largest airline; move may potentially increase airfares". New York Daily News. Retrieved February 15, 2013.
Zerna, J., (2012).“ Return of Investment Calculations” Business Proposal on Economics. An Undergraduate Thesis.

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WePapers. (2020, October, 25) Marketing Business Plans Examples. Retrieved June 22, 2021, from https://www.wepapers.com/samples/marketing-business-plans-examples/
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Marketing Business Plans Examples. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/marketing-business-plans-examples/. Published Oct 25, 2020. Accessed June 22, 2021.
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