A Business Proposal of Cube Airlines

Introduction

A business proposal is to convince investors to invest in the proposed business plan. This business proposal will talk about a business plan for an airline. An airline is an organization that caters to air transport of particular routes. It can be international or local, depending on what one desires. In this business plan, the airline is called Cube Airlines. In addition, it has been chosen because it has been noted that the services provided by other companies are not meeting the customers’ satisfaction. Airlines can carry people or goods from one place to another, and the government owns most, but some owned by individuals have been successful.

It is essential to have a business plan and a proposal because it gives a clear picture of how the company will run and the challenges that it will face (Stenger, 2016). A business proposal also gives the investors a firm ground in making decisions. In this business plan, the following will be discussed in detail.

• The business model where the airline will be identified and explained. The pricing and the market focus will be talked about and the routes that the airline will cover. The formation of an alliance is also essential in the business model. Whether or not the business will form alliances will be noted and explained. The business model will show how the airline is unique from other airlines.
• The proposal will discuss the operational analysis and the fleet details. The information will be given clearly. The airline will need crew members, and the number and the requirements will be given to ensure that the business will be well managed and no accidents will occur. The operational analysis shows how the airline operates and what it needs to operate.
• Sales and marketing will be analyzed, the airline’s market focuses on, and the best way to yield revenue. A communication system must be established to reach many people, and the best one will be discussed. Sustainability policy and CSR activity will be addressed.
• Data will be provided on how the airline has been operating in the past year. Data will be provided in various forms. Critical data from each section will be included for emphasis in this section. Moreover, the projected number of passengers and loads, key considerations, and the revenue yield will be included. The possibility of making a loss or profit will be stated.

Environmental Analysis

External factors can affect the business, including political, economic, ecological, social, and technological factors (Shaw,2019). In the airline industry, these factors have been shown to have a significant effect on revenue yield. These factors affect the airline regardless of the increase in passengers. Political instability will affect Cube Airlines because it can lead to war, and tourists will be skeptical about coming to the country. In the social factors, if the image of the airport is stained, maybe if there is a scandal or an accident,t it will affect the number of people that choose to use the airline.

When the airline faces some technological issue, like when the form of entertainment does not meet the expectation of the people, it will be hard for people to want to travel with the airline. Although it is not a significant factor, legal policies affect how the aircraft works. For example, it is required that the airplanes to registered in the countries they will land or take off (Hayward, 2020)

SWOT analysis is also an essential aspect that airline is exposed to. SWOT means strengths, weaknesses, opportunities, and threats. In an airline, one of the strengths is that it is highly profitable because the aircraft are fast, and they cover long distances in a short time, meaning they will earn more. The weakness is that many people cancel their flights, making the aircraft fly when not fully loaded. Tourism growth is a crucial opportunity for an airline because many people would want to travel. And one of the main threats is the weather because they have to travel in calm weather, and the weather is very dynamic, and crashes can occur.

The porters of five is another critical analysis. They include the customer’s bargaining power, the supplier’s bargaining power, the availability of substitutes, and the threats of new entrants. The threats of new entrant do not affect the airline industry so much because it rarely happens. The bargaining power of customers can make the airline reduce their prices and make them experience losses. Because of their high cost, the fuel suppliers tend to overcharge them. Most countries have embraced using of buses. However, this will not be much of an issue because our airline will be traveling long distances, and the use of air will be unavoidable.

TOWs analysis, like the SWOT analysis, focuses on the strengths, weaknesses, opportunities, and threats. The main difference is TOWs focus on the external threats while SWOT focuses on the internal. All of these are the same only the approach is different. The main focus is the threats and opportunities of the airline. The approach makes sure that the airline will focus more on the chance to minimize the weaknesses. In this section of the proposal, more details concerning PESTEL, SWOT, and TOW’s analysis has been further elaborated in the appendix section.

Business model

A business model is a plan on how a business will operate, and in this case, it is how the airline will work according to the routes and market focus (Kopp, 2020).

The proposed airline is called Cube Airline, and its main focus is on the quality of the airline’s services. It has been noted that there is a business gap in how the services are provided to their customers. The problem can occur when the customer is not satisfied with the service basing their judgment on what the company offers. On the other hand, the company’s understanding and the customers are different, making the customer conclude that the service is not meeting their expectations. Cube Airlines will eliminate all this by clarifying and employing well-qualified and polite service workers.

Routes Networks

The airline routes will be a long haul, meaning it will travel long-distance and operate at an international level. Cube airways will run from Bangkok in Thailand to New York. In Bangkok, it will be located in Bangkok Survanabhumi, and in New York, its destination will be at John F Kennedy airport. It will mean that the only route will be from Bangkok to New York. The flights will have different frequencies in the week depending but will have almost the same number of total flights. All this will depend on the demand for the flights and how frequently people travel. The one route will help the management concentrate fully on improving the quality of its services.

Business strategy

The business strategy that the airline will take will include improving the services; it will focus on a specific market and the price. The market in the spotlight is the people who are not satisfied with other airlines and feel they need a change. In this way, it will be goal-oriented, and the moves it will take will always be calculated. The targeted market is the premium customers; these are people who have a high budget and put the quality of goods and services above everything else. Pleasing this type of person will be hard but possible. For that to happen, the airline will make sure it is unique. The services try to meet the expectations of people. All these factors are intertwined, and when all these are met, the airline will become very popular and liked by many.

Alliances

Cube Airlines is considering making alliances with other airlines that offer other routes and different times of travel for the people. It is to means when Cube Airlines has no airplane offering to travel from Bangkok to New York, the other airline that Cube Airlines has allied with can chip in and take the passengers that want to travel. In this case, the airlines both benefit from it. Many airlines have successfully benefitted for many years. As it is for Cube Airlines, improving the quality of the travels services will be a good move for them. Booking is easy, and also moving from one airline to the next is very easy (DiScala, 2018). Flights that may come on short notice can be taken care of, and people with emergencies will not suffer. The prices of the tickets are significantly reduced, and most frequently, traveling people are noticed easily, and gratitude is offered to them (International Civil Aviation Organization, 2013). However, there are disadvantages that a company may face because of the alliance; when the company makes the partnership, it can cause a lot of complications, and the partnership has become very complex (IPL, 2013). It is important to note that knowing what could lead to the formation of alliances, Cube Airlines will be more careful not to land into that pit.

The factor that differentiates the airline from its competitors on the same airline route is that the airline will have a high quality of services. The service will be improved compared to the ones the airline provides. The service will include that the food and drinks provided will be of high quality. It will be achieved by employing very qualified and experienced chefs who can maintain high sanitation in their working area. The chef’s quality of food will be checked before employing them. The customers will be asked to give their honest opinions about the food and drinks and be seriously considered. The flight attendants will be given polite and very welcoming orders to the customers. The airplane’s cleanliness is going to be maintained. And above all, the airplanes will be in good condition before taking off and driven by highly qualified, experienced pilots.

The management ignores many of these things, not how small they may appear. With these taken into high consideration, the airline will beat its competitors. When the prices are reduced by introducing offers on holidays or every week, it will attract more people. However, when many people are traveling, it can overwhelm the staff and the facilities; the airline should also be prepared to expand and accommodate more people and offer more trips by increasing the number of airplanes.

Operational Analysis

In this section, it is planned that the routes to be talked about in great detail. The routes will be discussed in terms of which cities will be affected, the slots, the destinations, and the distribution frequency. The types of leases are also to be discussed. There are three types of leases, dry, wet, and damp (sofema, 2019). It is essential to understand the types. The wet lease is where the lessor provides the aircraft, the crew, the maintenance, and the insurance. The lessors pay for everything. The lessor provides only the aircraft, maintenance, and insurance in a wet-lease. And in the dry lease, the lessor provides the crew, maintenance, and insurance, whereas the lessee provides the aircraft. The purpose of leases is to lower the cost and avoid a lot of debt. It can be used to try new routes by a company, and the wet lease is mainly used here.

The routes

Cube airline, located in Bangkok Shurvanabhum airport in Bangkok, works in handy with John F Kennedy Airport in New York. The airline will only have this one route, but the aircraft will operate every day. However, the aircraft will work in shifts to allow the aircraft to be serviced for safety. Three aircraft will work for three days intermittently during the week while the rest of the days, the other four will fly. On the days an airplane is supposed to be working, it should not rest to avoid losses. Other companies have experienced huge losses because of these. Cube Airlines will not make the same mistakes. The advantage of having one route is that the market will be observed, and if need be, the number of routes will increase.

Onboard services and differentiation services

In aircraft, the onboard services offered are like the medical service. Many people must get sick because of fear when traveling by air, and with the help of a medical officer, it would be possible to calm them down. Meals and drinks could be offered because the flights might take long hours, and one may require to eat to ensure that the passengers’ comfort is maintained. The passenger can consume something that they are allergic to, and a medical officer will be of great help. Entertainment should be offered because of the long flights. It can be provided by installing large television sets behind their seats to watch as they travel. A crew ready to answer their questions and give them instructions and precautions during their flight should be provided. It is to make sure that the passengers are safe and they will get whatever they want if it is available (Paethrangsi, 2021). In addition to the services include smaller cabin size and better seats for clients.

Differentiation services differ depending on the company and are based on creativity and the company’s amount of money (Leopold, 2019). Their main purpose is to attract as many people as possible. The differentiation service can be offered where the airline can improve their seats and make them more comfortable for the passengers. They can offer offers on particular days, especially the short flights. It may create their seats so that the passengers will have privacy, which will make people want to travel with their aircraft.

Crew and Personnel Requirements

For Cube Airways to be successful, it must employ employers that are qualified and with a certain level of experience. A crew that is fit to work will be able to maintain a smooth running sequence of events as required by the management. The crew members are the ones that will determine the success of the airline, and they are the ones that will ensure that the goal is met. The crew members should have the following requirements

• They should be twenty or above years of age
• The crew members should have a good color vision
• They should be able to work long hours
• The members should have good interpersonal skills to maintain kindness
• The members should have experience in the job they have been allocated to.
• The crew members should be able to work alone
• The crew members should know more than language for communication with passengers
• The crew members should be physically fit
• They should be able to handle difficult moments with a lot of calmness
• Most importantly, the crew members should have a passport that does not limit them to any country
• The crew members should be eloquent and assertive in their decision making

Leases

Leases will be issued by the airline on various occasions. According to the need, the management will decide on the type of lease they want. When the company wants to try a new route, it can look for a company that will offer a wet lease (Cummins, 2019). It will be cheap, and they will benefit from it. A wet lease is mainly used when trying new routes. Leases will help reduce debts making the company not bankrupt (Loh, 2020). Trying new routes will help them tose e how the market is before investing in it. These calculated moves are the ones that help the company grow.

Sales, marketing, and distribution analysis

The market that Cube Airways is purposing to target is the people who are not satisfied with the services which they receive from other airlines (Zheng, 2020). It can be in the form of goods they are traveling. However, Cube Airways will focus more on people. Cube Airways will ensure that it’s aircraft and service are unique from other airlines, making sure that it still targets the people under a high budget. The market segment that Cube Airways is targeting is the premium customers who value and look for high-quality services and will pay any price at a high-quality cost. Cube Airlines’ prices will be high, and the services will be worth it. The airline will have unique features that will attract people who want to use them.

Pricing and Revenue Yield Strategy

A revenue yield strategy is where a company looks at what it can do to get money from its products or services. Dynamic pricing is one of the best ways of making sure you are making a profit and making the best out of the season (Blanes, 2022). Dynamic pricing is whereby the rates go higher in high seasons and go lower when demand decreases. Cube Airways will profit from this to ensure that the airline can be maintained in good condition and make progress. To ensure that you have the upper hand, Cube Airways should keep track of its competitors and know what they are doing. This way, they may see their mistakes and see errors and make sure they avoid them. It is also good to have services that vary to accommodate every social group when pricing. For example, the airline can charge extra on the first-class differently depending on what they have. The things provided first can also be different to motivate people to pay for them.

Distribution strategy

There are several distribution strategies that a company can use to market its services and goods. It is best to use the indirect and the direct distribution strategy in our case.

In an indirect distribution strategy, the company will use a universal website for advertising their airline. For some Global Distribution Systems websites, like the TRAVELPORT, the rate will be higher because the airline is not using their website (Srivastava, 2020). It is not the best way to sell their tickets. It is a way of increasing their chances of being known and marketing the airline. A particular group may know the website of people who will use it to buy tickets.

In the direct distribution strategy, the company has a website where people can book their tickets. It is the most preferred way of distributing their product to people because it is cheaper when one buys the tickets from the website (Srivastava, 2020). The website should be known to people to be attracted by the low rates of purchasing the tickets and then attract more people. After buying the tickets directly or indirectly, the airline will issue the tickets once paid. The websites are a good way of keeping track and seeing their progress. It will help them plan and have data to help them make decisions.

Corporate Social Responsibility and Sustainability Policy

Corporate social responsibility is what the company does to society in return (Victoria University, 2020). Cube Airways will engage in charity work to donate money to children’s homes and foster care places in Bangkok and other countries and cities. Cube Airways will support the movement, clubs that support the unprivileged. It will be done out of kindness because of the support that they have shown them. The airline will support children coming from families that suffer financially. It is hoped that Cube Airways can provide a means of transport for the flying doctors in the future. The airline will use recyclable plastic cups to preserve the environment (Aless & Besse, 2019). Cube Airways will emphasize short-haul travel to prevent air pollution. It is a way of taking care of the community’s environment. in this way, the airline will show it is after their needs and those of the community and general well-being. Cube Airways will sometimes use electricity instead of fuel for the same reason, to preserve the environment. It will be communicated on the personal website and through posters.

Promotion strategy

One of the best ways to increase many customers choosing Cube Airways is by creating a loyalty program where the passengers get promotions and offers (Chauhan, 2019). It can include giving them an extra free seat. It will make them want to travel with the airline. The airline can also offer free meals and better entertaining services for those who travel with them. Cube Airways can attract more people by choosing a good platform for advertising its services. It may include television, ads on YouTube, and other apps.

The advertisement should be catchy for people to listen to have the full information (de Oliveira, 2019). The company can try to find the most frequent customer and reward them by giving them a free flight with their family or friends. Although this may be hard to track, a system can be created where one can see the number of flights that one has bought and used. The system can alert the managers when a certain amount of targeted flights has been reached by someone, and they will contact them. A membership card can help reduce the price of the tickets for the members. It is also essential to see what the other airlines are doing and build on that.

Performance Summary

To be successful, one needs to look at the market and know how their upcoming business will be successful. Projected revenue is essential to know if it is worth investing in the business or not. The first few years are crucial for a business, and it is necessary to make calculated moves to ensure that the business does not fail. Most businesses fail due to bad management.

Cube Airways is estimated to make the following revenue in the first year.

The estimated number of passengers that the plane can carry in a year is about 20,000 per plane. It can be increased or reduced depending on the number of trips a plane can make. The capacity of a commercial aircraft is about 850 people. It is essential to consider some considerations, like the fuel; this has become crucial. Fuel is costly, and flying rates also increase when it increases. Another critical consideration is the maintenance of the aircraft. It is essential to service the planes before every flight and after to ensure it is safe for traveling. It is essential because this reduces and prevents accidents that can be fatal and can make the customers lose faith in them.

Cube Airways will be willing to spend a lot of money to make sure that all these considerations are met because it will attract more people, and in the end, it will make more money than it spent on the services. It is also expensive to pay highly qualified and experienced personnel. Still, Cube Airways will go that extra mile to ensure their customers’ safety and experience mine.

Conclusion

The proposed business is called Cube Airways, which will be an international airline. Cube Airways will be an airline that will thrive despite the competition in the industry. The airline’s purpose is to capture people’s minds with their services. Cube Airways looks forward to accommodating the premium customers ready for any kind of money to have the best kind of services. The airline will have long-haul routes only, which means it is long distance. The airline will make alliances with other airlines to make more profits. Alliance has a lot of advantages like the easy accessibility of planes from one airline to the next. Bangkok Suvarnabhumi Airport will have leases to help them look for new routes, and the crew will have requirements that need to be met. The crew members should have good interpersonal skills to make sure that they treat the passengers kindly and warmly (Yang, 2020).

Cube Airways will use dynamic pricing to make sure they maximize the high seasons when people are traveling a lot. It is a strategy that will increase the revenue hence making a profit. To keep their customers, they will have the policy to give free rides to a particular group of people. It is noted that Cube Airways will give back to the community by supporting charity and children from families that struggle financially. Things like reusable bottles will be used to take care of the environment. Therefore, Cube Airways will be successful and stand out from the other airlines. It is also important to mention some of Cube Airways’ challenges, including duel. The fuel prices are high, which may cause some challenges in fueling their aircraft (TTSadmin, 2018). The stiff competition is another major problem that Cube Airways will face. There will always be upcoming airlines whose goal is to outdo the airline. Due to some issues, the airline can have some labor unrest where the crew members strike and work is halted, causing significant losses.

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Appendix 1

PESTEL Analysis

Appendix 2

SWOT Analysis

Appendix 3

TOW’s Analysis

Appendix 4

A route from Bangkok to New York

Appendix 6

Only one route will be offered by Cube airways that is from Bangkok to New York