Airline Business Plan

Air Leo

Executive Summary

Opportunity

Market

Economic growth and the requirements of redevelopment, not to mention the impending entry of several countries in the region to the European Union, are creating increased demand for air services between Western Europe and the countries of Southeast Europe and Turkey.

The market combines a variety of elements all of which demand a higher quality of air service than often currently available:

1. 1. Business travelers requiring convenience, reliability, speed, and schedules built around business needs.

 

1. 1. Government and international organization travelers, requiring the same elements.

 

1. 1. Personal and leisure travelers from the Southeast Europe/Turkey region who have the money to travel by air and who increasingly demand a higher level of service and convenience, but at an economical cost.

 

1. 1. The “Diaspora,” Personal and leisure travelers originally from the Southeast Europe/Turkey region, but now living and working in sizable numbers in the countries of Western Europe, with the same demands.

 

1. 1. Western European personal and leisure travelers, primarily traveling on the airline’s routes between Western European points.

 

1. Seasonal (primarily summer, with some limited niche markets in the winter period) holiday travelers, primarily destined for Greece, Turkey, and the islands of the Mediterranean. Cost, reliability, convenience, and destination are their concerns.

The proposed new airline will appeal to all these distinct groups by offering better quality service (and in some cases, offering service where none now exists), at a higher level of safety, comfort, and convenience, and at reasonable fares, than currently available. The new airline also will focus on the niche markets identified in the Service Description section of this plan, enabling it to better serve and to become identified as the carrier of choice for those markets.

Competition

The overall airline industry operating between Western Europe and Southeastern Europe and Turkey consists of four primary segments:

1. 1. Established mainline European carriers (primarily Swiss International, Austrian, Lufthansa, Alitalia, Malev, Turkish) utilizing their Southeast European routes as spokes connecting to main hubs in Western Europe (or Budapest and Istanbul in the case of Malev and Turkish, respectively) and serving to feed traffic to their prime intra-European and trans-Atlantic routes (or domestic Turkish routes in the case of Turkish).

 

1. 1. Smaller, but generally well-established regional airlines primarily from Western Europe or the upper level of Eastern European states (primarily Swiss International, Tyrolean, and Adria) that perform essentially the same function as the mainline carriers or, in the case of carriers like Adria, link destinations in Southeast Europe to their own national capitals.

 

1. 1. Home-based Southeastern European carriers (such as ADA Air, Albanian Airlines, Avioimpex, Balkan Air, Hemus Air, JAT, and Tarom Airways) that often operate older, Soviet-built aircraft or turboprops, offer a generally lower level of service (though not always lower fares), and are often less highly regarded, including by travelers from Southeastern Europe. These airlines connect points within Southeast Europe, or they may connect Southeastern European destinations to major destinations in Western Europe.

 

1. There also is a fourth segment worth noting, and that is the fairly significant charter market that exists within certain niche or seasonal markets. This market includes charter flights between Pristina and destinations in Switzerland and Germany, as well as primarily summer charters from Southeast Europe to New York and other destinations in North America. These charters are often operated by individual travel agencies or airlines, and often are categorized by a low level of service and utilization of older, often Soviet-built, aircraft. There also are the vacation charters that operate from Western Europe to Greece, Turkey, Cyprus, and the other holiday spots of Southeastern Europe and the Mediterranean.

It is anticipated that the proposed new airline would most closely fit into the second grouping above, but would compete effectively with all four main segments through a combination of a high level of safety and service, carefully selected routes, niche-market service, convenient schedules, reasonable and competitive fares, and modern, safe, comfortable aircraft. It also will offer service on under-served and unserved routes where little or no competition currently exists.

Why Us?

Air Leo will fill a niche in the growing air-travel and cargo markets linking Western Europe, and points beyond, to Southeastern Europe and Turkey; to achieve high, and profitable, load factors by identifying and serving key routes and city pairs currently unserved, under-served, or poorly served, and where significant unmet demand exists; and to set a new standard for air service and professionalism both within the target market region and beyond.

Expectations

Financial Highlights by Year