CORPORATE AIR CHARTER SERVICE

Transcription

1 CORPORATE AIR CHARTER SERVICE

2 ABOUT X Y Z CONSULTING X Y Z Consulting was established in 2013 to provide aviation consulting and aviation services in Africa and the Middle East. Our company is an Associate Member of Oliver Wyman Consulting based in Washington D.C. with both companies having existing business relations and providing services to a range of companies in the aviation industry.

3 Customer Requirements o Looking for a cost effective solution to provide air transport for employees of a Oil & Gas company on selected routes in Nigeria and in the West African region o A recommended weekly flight schedule and weekly travel spend was provided o Looking for one aircraft with less than 30 seats o One cabin configuration of 30 to 32 seating o Aircraft, cockpit crew and lessor required to meet high safety standards and procedures of multinational companies operating in the Oil & Gas industry o Aircraft availability in approximately 4 months

4 Flight Schedule (request by customer) DAYS 7AM 8AM 9AM 10AM 11AM 12PM 1PM 2PM 3PM 4PM 5PM 6PM SUN ROUTE#1 DEP LOS ARR PHC DEP PHC ARR LOS DEP LOS ARR ACC DEP ACC ARR LOS DEP LOS ARR PHC DEP PHC ARR LOS MON &THU ROUTE#2 DEP LOS ARR PHC DEP PHC ARR LOS DEP LOS ARR ACC DEP ACC ARR ABJ DEP ABJ ARR ACC DEP ACC ARR LOS WED, FRI & TUE ROUTE#3 DEP LOS ARR PHC DEP PHC ARR LOS DEP LOS ARR ACC DEP ACC ARR TAK DEP TAK ARR ACC DEP ACC ARR LOS 1HR 1HR 1HR 1HR 1HR 1HR SAT MAINTENANCE MAIN ROUTES: o Lagos to Port Harcourt Route Sundays through Fridays o Lagos to Accra Route Sundays to Fridays SECONDARY ROUTES: o Accra to Takoradi Route recommended for Tuesdays, Wednesdays & Fridays. o Accra to Abidjan Route recommended for Mondays and Thursdays o Aircraft maintenance on Saturdays

5 Corporate Charter Aircraft USPs Departure schedule based on customer needs and convenience Travellers and companies save valuable time through very high punctuality of departures and arrivals of corporate charter aircraft Arrival at departure airport only 1 hour prior to departure Convenience of being able to fly to secondary airports which are less congested, closer to where passenger needs to get to and usually not served by large airlines Unique and dedicated catering solutions available for corporate charter aircraft Checked in baggage items always travel with the passenger and aircraft Large cabin baggage items can safely be placed in the baggage hold prior to boarding the aircraft and received directly after the flight has landed

6 Recommended Aircraft Types Embraer ERJ 135/145

7 Aircraft Exteriors Embraer ERJ 135/145

8 Aircraft Interiors Embraer ERJ 135/145

9 Aircraft Features Embraer ERJ 135/140/145 Aircraft available in 37, 44 and 50 seat configurations Global aircraft dispatch reliability of 99% 937 aircraft are currently in active service Flown by 37 different airlines around the world Regional jet aircraft save valuable time of over turbo prop aircraft through faster speed and further distances Aircraft turnaround times possible in 30 minutes saving valuable time to use aircraft on extra daily flight sectors to generate revenue Aircraft sourced can have built in steps at main door to avoid reliance on airport ground support

10 Aircraft Finance Overview Purchasing aircraft versus leasing aircraft can reduce costs by -14% Purchasing aircraft does not rule out several aircraft financing solutions which are available in the market Experienced technical team on hand to pre-select, inspect and provide informed choices on aircraft selection and options available

11 Aircraft Finance Overview Acquisition of a <5 year regional jet available for +/- $5m Financing over a 5 year period possible at 12% interest rates Profitability from Year 2 possible with contracted business from customers and selection of correct aircraft and continued focus on operational costs and service efficiency Wide choice of modern, excellent condition and cost efficient 37 to 50 seat regional jet aircraft are available in the market Fully comprehensive insurance for aircraft, engines, crew and passengers available from $3k per month

12 Costs/Profit Overview Embraer ERJ seats MARKET Lagos to Port Harcourt Lagos to Accra Accra to Takoradi Accra to Abidjan Frequency Seat Capacity Contracted Seats Load Factor Average OW Fare (excl taxs) Revenue Costs Profit/Loss Customer Spend Current Customer Spend Charter Customer Variance Option % $82,41 $ $ $266 $ $ $3 366 Option % $82,41 $ $ $228 $ $ $2 970 Option % $76,00 $ $ $502 $ $ $ Option % $76,00 $ $ $1 163 $ $ $ Option % $71 $ $ $53 $7 185 $ $8 837 Option % $71 $ $ $35 $7 185 $ $3 496 Option % $108 $ $ $327 $6 856 $ $9 944 Option % $50 $7 400 $ $3 073 $6 856 $ $9 424

13 Costs/Profit Overview Embraer ERJ seats MARKET Frequency Seat Capacity Contracted Seats Load Factor Average OW Fare (excl taxs) Revenue Costs Profit/Loss Customer Spend Current Customer Spend Charter Customer Variance Lagos to Port Harcourt Lagos to Accra Accra to Takoradi Accra to Abidjan Option % $82,41 $ $ $179 $ $ $6 139 Option % $82,41 $ $ $154 $ $ $594 Option % $76,00 $ $ $273 $ $ $ Option % $56,00 $ $ $65 $ $ $ Option % $65 $ $ $293 $7 185 $ $ Option % $65 $ $ $195 $7 185 $ $4 373 Option % $108 $ $ $75 $6 856 $ $ Option % $50 $ $ $1 157 $6 856 $ $15 144

14 Costs/Profit Overview Preliminary Recommendations Preliminary Results: Based on the preliminary results, only the Lagos-Port Harcourt route has been identified to currently operate on a breakeven basis for Northern Oilfields whilst also being able to reduce or maintain the current travel spend for Schlumberger. The remaining 3 routes at this stage have a combination of low current travel spend by Schlumberger, low air fares and particularly on Lagos-Accra, a very high amount of passenger taxes which combined make it currently unsustainable to operate on a breakeven basis for Northern Oilfields and be able to reduce travel spend for Schlumberger. Approach to costs/profits: Analysis was carried out based on the current travel spend of Schlumberger and comparing those to the average direct operating costs and fixed operating costs of Embraer ERJ aircraft and also taking into account the cost of aviation fuel in Lagos, various passenger taxes and using block flight hours.

15 Costs/Profit Overview Preliminary Recommendations Summary recommendations To consider launching one daily flight between Lagos and Port Harcourt between Sundays to Fridays for Schlumberger using a 37 seat aircraft to minimize operating costs which would ensure operating at breakeven at a 86% load factor The other alternative is similar to the above in schedule however to rather use a 50 seat aircraft where breakeven is possible at 68% load factors which offers 192 weekly seats to grow the market with contracted business from other customers Either way it is important to develop operational expertise and develop a sound industry reputation in order to contract more customers Once the expertise and reputation has been built, a second aircraft should be sourced such as a 37 seat aircraft which can develop secondary routes such as Lagos-Accra, Accra-Takoradi and Accra-Abidjan where demand and yields are low. A second aircraft can also be used to operate on the Lagos-Port Harcourt route to cater for more contracted business in the Oil & Gas industry.

16 Operational Overview Crew: planning for 2 sets of crew consisting of two cockpit crew and one cabin crew member who are licensed with the highest safety and operational standards available in the industry Technical Support: 1 Aircraft Technician Operational Support: 1 Operational Manager Aircraft Backup: a backup aircraft contract can be negotiated to ensure a less than 4hr downtime in the event of a major technical occurrence Administrative Support: o 2 administrative employees based in Lagos for coordination purposes o 2 drivers available 24/7 for crew transportation o 2 vehicles for crew transportation and for administrative duties

17 Potential Services X Y Z Consulting would be able to provide your company with the below areas of expertise; To identify, evaluate commercial opportunities, assess potential risks and recommend suitable aircraft types and service providers Develop and assist with creation of business plans, strategy documents and presentations To recruit and provide the operational and administrative team which will coordinate with your customers travel department, coordinate with flight deck crew and airport authorities to ensure a professional, reliable and safe air charter service is provided To manage key business relationships with aircraft lessors, aircraft financing banks, airport service providers and government aviation authorities. Our service includes assisting you with developing a negotiation position and supporting you in negotiations once common areas of interest and cooperation have been established with aircraft lessors, aircraft financing banks, customers and aviation service providers.

18 Next Steps Submission of initial proposal to Northern Oilfield - done 18 June Meet with Northern Oilfield to discuss and present proposal - 25 June Discuss and finalise agreements between Northern Oilfield and XYZ Consulting - 25 June Meetings and discussions with potential customers to secure guaranteed and contracted purchase of seats Develop business plan Source financing solutions Application for a air service license Source suitable aircraft for operation and recruit Operational Team