Spurs Airlines Company Business Plan Report

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Executive Summary

Spurs Airline is a full cost carrier that intends to carry out all forms of services, including on-board and airport support for its customers. The company will also offer both cargo and passenger services. The company’s headquarters are located at George Bush International Airport in Houston, Texas. The overall goal of Spurs Airline is to make sure that the company offers distinguished service to its customers on all of its affiliated businesses.

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Houston is the main hub of Spurs Airline because it has the potential for a wide range of business operations for the company. Spurs Airline also has other bases of operation that are located in Los Angeles, New York, Dubai-United Arab Emirates, and Heathrow.

However, the airline plans to expand its services to other places within the United States and around the world. Most of Spurs Airline’s operations are centralized on passenger services because the airline has not yet secured adequate warehouses for cargo operations in all its satellite locations. Spurs Airline operates passenger flights from six locations through its fleet of 199 aircraft, some of which are owned by the company while others are leased for periods of up to 2 years.

The company limits its operations to the use of the Boeing line of airplanes. Currently, Spurs serves approximately 362 sectors. Hussein Haidari is the current Chief Executive Officer of Spurs Airline. The airline has outlined the strategies that will enable the company to capitalize on both its cargo and passenger operations.

Spurs Airline aims to capitalize on its position as the carrier with the highest cargo load factor in the industry. The company’s brand has not taken shape among the various airlines that operate from the United States. However, the company aims to create a brand that will be synonymous with excellence in terms of both cargo and passenger handling. Reliance on the good quality of carrier engines will also add consistency to the operations of Spurs Airlines. The success of Spurs Airlines relies on a keen analysis of market patterns, the use of good quality aircraft, and reliable personnel, among other factors.

Business Introduction

Spurs Airline is a network carrier that was established a few years ago, and it provides both passenger and cargo services to consumers. The airline is primarily located in Houston, Texas, where it operates from its headquarters at George Bush International Airport. The company headquarters are fully owned by Spurs, and they have some element of permanence in terms of their asset value.

Other Spur Airline offices are located in Los Angeles’ LAX, New York’s JF Kennedy, London’s Heathrow, United Arab Emirates’ Dubai, and France’s Paris airports. The Dubai hub also serves as a primary area of operation for the company also owns various cargo warehouses throughout these locations, and the company’s management is looking into the expansion of these warehouses and cargo operations.

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The office locations are dependent on the intensity of the business operations, with Houston having the largest turnover. Houston was also the center of focus when the airline was charting routes within and out of the country. Consequently, Houston’s potential clients and their most likely destinations were instrumental in the formation of the airline’s routes.

The expansive state of Texas provides the airline with a sound base of operations. Texas has good business potential when it comes to both passenger and cargo operations. The business environment in Houston, Texas, is also vibrant due to interests in agriculture, mining, and other well-performing industries. In addition, the airline’s main area of operation has few concerns when it comes to air pollution that is often associated with airports.

Spurs Airline aims to harness its impressionable cargo load factor when marketing its brand and to attract more customers. The pricing of Spurs’ products is in line with industry standards, and it is, therefore, competitive. The company plans to use the Boeing brand of aircraft exclusively for all its carrier needs.

The use of Boeing aircraft will ensure that Spurs does not incur additional expenses when it comes to maintenance of aircraft and additional training of personnel. Some of the Boeing aircraft are leased while others are fully owned by the company. Most of Spurs Airline’s operations are local; therefore, most of the company’s airplanes are short to medium range in their functionality. Currently, the company is mainly concerned with cargo capacity, a factor that is well addressed by the Boeing variety of airplanes.

Mission

The mission of Spurs Airline is to be the best service provider in both cargo and passenger categories of business. The company also aims to create a history of unrivaled profitability whilst maintaining high standards of service. The objective of the company is to ensure that the airline’s high cargo load factor does not interfere with its quality of service.

The airline endeavors to maintain a high level of punctuality for both cargo and passenger deliveries whenever possible. Spurs Airline also aims to stay abreast of new technology and possible expansion opportunities. The company is modeled around the premise of blending capacity with excellence. If the company can achieve its mission of being the best in both cargo and passenger services, it will also achieve most of its set goals.

Strategy

The business strategy of Spurs Airline is closely dependent on the company’s ability to adhere to these strategies:

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  1. To maximize on the airline’s capacity for doing business within the United States, Dubai, and other locations around the country
  2. To make sure that the airline maintains high levels of customer service that will eventually boost consumers’ confidence in relation to the Spurs’ brand
  3. To provide a higher than average level of in-flight entertainment with the view of appeasing individual customer tastes and to preferences
  4. To maintain its current position as the airline with the highest cargo load factor, which currents stand at 18.02
  5. To keep a keen eye on market patterns so as to maintain high levels of profitability that will, in turn, lead to a quick return on investment
  6. To maintain a highly functional fleet by ensuring that purchased aircraft undergo regular overhauls and also the company does not lease new carriers for more than two years and old ones for more than one year
  7. To continue purchasing assets that will enable the airline to set out on expansion agendas across the world
  8. To build strong ties with stakeholders within the airline industry including government agencies and private entities
  9. To achieve a global presence in at least major regions in the world namely America, Europe, and the Middle East.

Market Opportunity and Demand

The airline carrier market has been facing various types due to competition and marketing dynamics. Spurs Airline is both a passenger and cargo services airline, and this magnifies the marketing opportunities for the company. For instance, some of the strongest airline brands in the market have experienced major market turbulences.

Survival in the airline industry requires a deep understanding of the market dynamics that apply to the current market environment. Spurs Airline proposes to fill a gap in the market by entering the industry from the most viable locations in America. In addition, the airline seeks to be gradual in its entry to international markets. This ‘caution’ provides the airline with a chance for gradual and realistic expansion.

For example, Spurs airline has only ventured into areas that have direct links to the United States’ air travel. Consequently, the airline customer potential is magnified by the fact it has offices and warehouses in the world’s biggest air travel hubs, including Heathrow, Paris, JFK Airport, and Dubai. These strategic locations mean that the airline does not have to struggle to attract business in the form of both passengers and cargo. Spurs Airline does not intend to use price as a major element when attracting new business. However, Spurs will rely on the efficiency and the ability to maintain a high load factor for cargo services and punctuality in passenger services.

Proposed Route Structure Schedule

Spurs Airline will rely on information from highly-trained analysts when charting its route structure and schedule. Currently, the domestic and European markets provide the airline with basic routes whilst the hub in Dubai acts as a major connector between the two regions. The airlines ability to venture into the international markets will only be determined by its success in the domestic hubs. Consequently, all the routes that will be formulated by the airline in the future will have a bearing on the current route-structure.

The airlines initial route structure consisted of flights from George Bush International Airport to JFK, LAX, Heathrow, Dubai, and Paris. The other major operations route consisted of flights from Dubai International Airport to Heathrow, LAX, Paris, JFK-New York, and Houston.

The current route also features a newly charted route from LAX to Alaska. The two hubs in Dubai and Houston are essential route connectors in both passenger and cargo services. For instance, there is a lot of goods moving out of Texas, and Dubai is a major passageway for items that are moving across Europe, Asia, Africa, and the Americas. The Dubai terminal comes with sophisticated cargo handling equipments that are essential in the maintenance of flight schedules.

The most viable expansion routes for Spurs Airline are in the European region, where cargo and human movements are subject to constant changes. In addition, African and South American routes still present the carrier with opportunities for route expansions. Amsterdam, Madrid, Dublin, and Tokyo are some of the most viable future hubs of operation for Spurs Airline.

Financial Analysis

During its four years of operation, Spurs Airline has relied on bonds and loans for its expansion strategies. During its first four years of operation, Spurs Airline has had an average gross income of $2.7 billion. The goal of the company is to achieve a turnover of $5.3 billion by the third quarter of 2019.

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Spurs intend to keep using the same avenues of financing that it has been utilizing for the last four years. A majority of the airline’s revenue comes from ticket sales, while the most income goes towards fueling of aircraft. The airlines product is the seat and cargo space, although cargo services only account for less than 10% of the airline’s revenue.

The financial success of Spurs Airline can be assessed through the Revenue Available Seat Mile (RASM) and the cargo load factor. Currently, the airline’s RASM stands at $0.2 per mile. This number is set to go up as the airline embarks on expansion plans.

Sales and Promotional Strategy

Brand acceptance and recognition are key elements in the success of any product. Currently, the airline industry is under close scrutiny, especially in regards to customer service. For instance, news of a customer being treated badly by a carrier can easily be shared through social media avenues, thereby damaging a reputable brand.

Modern branding in the airline industry can no longer be limited to costing because customer comfort has become a major distinguishing factor in the flying business. Repeat customers also offer stability to a brand and consequently bring down the costs of advertising. The company has considered all these factors when coming up with an advertising strategy that best suits several of the airline’s business segments.

Premium advertising channels favor television as the most effective avenue. All of the airline’s products can be effectively advertised through television media. Advertising through event sponsorship is one of the most unviable means of adverting Spurs’ products at this point because the brand has not yet taken off.

Marketing specialists have pointed out that economy products will rely on television adverts for promotion while premium products are better suited for a wide range of advertising avenues, including television, billboard, radio, and print advertisements.

Promotion of cargo has the least reliance on television media, and radio adverts can bridge the gap between potential cargo customers and the company’s sales representatives. Social media is also another avenue that Spurs Airline plans to use in the course of its future expansion agenda. All travel agents will receive a total a 10% commission on their ticket and cargo space sales.

Aircraft Operating Strategy

Spurs Airlines has already been in operation for four years. During this period, the airline has injected vast amounts of capital into its operations, and it has managed to remain profitable. The company is also in the process of servicing some of its previous loans and bonds. The airline currently owns a total of 103 Boeing aircraft and leases 96 others on periods not exceeding two years.

Eventually, the company plans to dispose of some of the oldest aircraft within its flight in the next two years. The model of Boeing aircraft in use will depend on whether it is hauling passengers or cargo. Models that will be used for short and medium-range passenger carriers include the B737-700, B737-900, and B737-800.

Dream liners such as the B767 and B787 will be used for hauling cargo and embarking on long flight destinations. The daily utilization of the aircraft will range from 12 to 15 hours. The company has also placed an order ten wide-body Boeing aircraft that are expected to be delivered by the year 2019. The planes will rely on top-notch engines from Pratt and Whitney, General Electric, and CFM.

Competition and competitive Response

The airline industry is characterized by a high level of competition, especially from multinational companies that have vast assets all over the world. However, Spurs Airline will rely on a simple and well-modeled business strategy to survive in the competitive airline industry.

The company has also based its operations in areas that have the potential for growth. For instance, the United Arab Emirates is a competitive business hub for all airline operators across the world. Consequently, having an operation base in Dubai will boost the prospects of Spurs Airline.

The company uses competitive reward schemes and promotional fares that are aimed at putting the airline at par with its competitors. These forms of brand appraisal will also ensure that the airline can manage to net repeat customers.

All the attracted customers will be treated to high levels of service within both the airport premises and aboard flights — the airline endeavors to give notice of changes in flight schedules at the earliest opportune times. The in-flight treatment of passengers will also reflect the highest industry standards that include personalized entertainment for all passengers.

Management and Support Team

The employee team that is tasked with turning Spurs Airline into a global brand consists of highly trained individuals who have attained exceptional achievements in their areas of operation. The management team is led by Husain Haidari, the CEO of Spurs Airlines. Other key members of the management team include one operation analyst who is instrumental in the scheduling of Spurs’ flights, evaluation of existing routes, and charting of new paths.

The other key member of the management team is the cargo manager, who is in charge of the airline’s cargo-based operations, including handling, storage, and safe delivery. Spurs Airlines is also a new business that requires intense advertising in order to gain brand recognition. Consequently, the airline utilizes the services of three advertising managers in its three key areas of operations. Since its inception, the airline has not encountered any cases of employee disquiet.

Risk Factors

There are various risks that are associated with the airline industry. Most of these risks are external factors such as inflation, terrorism, bad weather, war, and fierce competition. Furthermore, airline industries are not dependent on local economic environments, but they also factor-in international events. In the current environment, terrorism and economic uncertainties make up the biggest risk factors in the operations of Spurs Airlines.

A seemingly insignificant event such as a terrorist attack can have major effects on the profitability of the airline industry. Instability of fuel prices also has a significant risk factor when it comes to the operations of Spurs Airlines. For example, when fuel prices are down, an airline can adjust its prices downwards only for fuel prices to start rising again.

Invitation to Participation

Spurs Airlines takes this opportunity to cordially invite you to join our company as an esteemed investor. Spurs Airlines offers investors a potentially good return on investments through its operations in the ever-expanding airline industry.

The airline has managed to maintain profitability in its first four years of operation, and this progress should act as an incentive to all potential investors and act as a stamp of approval for its management team. The airline plan to venture into new markets with the same gusto it has been operating with over the last four years.

All offers can be submitted through the company email or delivered to the headquarters in Houston.

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IvyPanda. (2020) 'Spurs Airlines Company Business Plan'. 3 May.

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IvyPanda. 2020. "Spurs Airlines Company Business Plan." May 3, 2020. https://ivypanda.com/essays/spurs-airlines-company-business-plan/.

1. IvyPanda. "Spurs Airlines Company Business Plan." May 3, 2020. https://ivypanda.com/essays/spurs-airlines-company-business-plan/.


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IvyPanda. "Spurs Airlines Company Business Plan." May 3, 2020. https://ivypanda.com/essays/spurs-airlines-company-business-plan/.

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