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Airline Business Plan

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Air Leo

Financial Plan

Forecast

Key assumptions

In addition to the general financial and business assumptions presented in  the following table, the key parameters presented on the next page also were included as Operating Assumptions in formulating the financial portions of this business plan.

Every effort was made to be realistic in these Assumptions, and if anything they were formulated conservatively, particularly in calculating initial load factors and revenue yields which, in practice, should be considerably higher than offered here. Additionally, passenger and cargo fares were considered to be flat over the entire period covered by this plan to compensate for the possibility that additional competition could force fares to remain relatively constant over the period. However, the objective of this exercise was to show that the proposed operation will be profitable even with much lower revenues than would normally be expected, and the numbers do in fact confirm a profitable outcome.

Additionally, expected net revenues from offering peak-demand special flights also are calculated. They are set apart separately from the scheduled-service revenues to show that both types of service – and particularly the more important scheduled service – are viable and the airline will be profitable even without these additional revenues.

The assumptions utilized here are based on dry leasing new Avro RJ100s at a high level of outfitting and with necessary spares included. A separate set of figures is provided following the Operating Assumptions section which gives a cost comparison should the decision be made to purchase the aircraft new, utilizing ECGD export financing for 85 percent of the purchase price of the aircraft.

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of funds

Start-up Expenses

Legal and consulting $200,000

Route and market study $100,000

Office supplies, stationery etc. $10,000

Brochures and marketing materials $30,000

Design consultants $60,000

Corporate insurance $20,000

Office rent $50,000

Software and systems development $100,000

Expensed equipment and off. furniture $150,000

Expensed vehicles (8) $100,000

Public relations and advertising $80,000

Crew, staff training and manuals $60,000

Other $30,000

TOTAL START-UP EXPENSES $990,000

Statements

Projected Profit and Loss

2018 2019 2020
Gross Margin $39,529,449 $90,496,872 $141,880,017
Operating Expenses
Interest Incurred
Depreciation and Amortization
Gain or Loss from Sale of Assets
Income Taxes $0 $0 $0
Total Expenses $1,997,851 $4,605,528 $7,266,483
Net Profit $39,529,449 $90,496,872 $141,880,017

Projected Balance Sheet

2018 2019 2020
Cash $39,529,449 $130,026,321 $271,906,338
Accounts Receivable $0 $0 $0
Inventory
Other Current Assets
Total Current Assets $39,529,449 $130,026,321 $271,906,338
Long-Term Assets
Accumulated Depreciation
Total Long-Term Assets
Accounts Payable $0 $0 $0
Income Taxes Payable $0 $0 $0
Sales Taxes Payable $0 $0 $0
Short-Term Debt
Prepaid Revenue
Total Current Liabilities $0 $0 $0
Long-Term Debt
Long-Term Liabilities
Paid-In Capital
Retained Earnings $39,529,449 $130,026,321
Earnings $39,529,449 $90,496,872 $141,880,017

Projected Cash Flow Statement

2018 2019 2020
Net Cash Flow from Operations
Net Profit $39,529,449 $90,496,872 $141,880,017
Depreciation & Amortization
Change in Accounts Receivable $0 $0 $0
Change in Inventory
Change in Accounts Payable $0 $0 $0
Change in Income Tax Payable $0 $0 $0
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt
Change in Long-Term Debt
Cash at Beginning of Period $0 $39,529,449 $130,026,321
Net Change in Cash $39,529,449 $90,496,872 $141,880,017

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