Air Transport Economics - Business Plan for New Entrant Airline

This report discusses the business plan of a new organisation called as London Hamburg route. The report emphasizes on the complete business plan in context to the organisation. It includes market audit, situation in market, internal analysis, marketing strategy, segment analysis, product positioning and conclusion.

AIR TRANSPORT
ECONOMICS - BUSINESS
PLAN FOR NEW ENTRANT
AIRLINE

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
Executive Summary.....................................................................................................................3
Market Audit................................................................................................................................3
Situation in Market......................................................................................................................4
Hamburg Airport as the chosen Airport for this study................................................................5
Hawai Airlines.............................................................................................................................6
Internal Analysis..........................................................................................................................7
Marketing strategy.......................................................................................................................8
Segment Analysis........................................................................................................................8
Product Positioning......................................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The current report will discuss about the business plan of a new organisation called as
London Hamburg route. The organisation will place its headquarter in London, United Kingdom.
Company will currently be planning to start with one route between London to Hamburg.
Company aim to dominate the entire market with its influence presence and aim to make air
travel more convenient for all types of customers. This project is all about disclosing the business
idea of the organisation. Henceforth, report will emphasis on the complete business plan in
context to the organisation. A complete detail about the business and the business idea will be
discussed in this project.
Executive Summary
The Hawaii Airline is a low cost airline that wish to offer a most convenient air travel to
all types of target customers. Company aim to make travel more economical which will further
maximise the overall scope of the entire industry. It was concluded that the company is a new
entrant in the market but organisation wishes to hold a very influence power in the sector that
will cater the dominance to the organisation in industry. Also, management of Hawaii Airline
aims to reduce the distance and make the world more connected towards each other.
Market Audit
Aviation sector identified as one of the major area the world is looking forward. As the
industrial pace constant level of competition in the industry make the world more connected and
require time effectiveness when it comes to travel. The constant rising need and demand of
aviation sector further increases the air traffic. Currently the United Kingdom own the 3rd largest
aviation network. In Europe United Kingdom hold the first position in term of air traffic.
According to study aviation sector in United Kingdom contribute almost 3.4% of the entire
economic activity occur in the country. Currently the aviation sector of United Kingdom is
holding a growth rate of almost 5% which clearly reflect the rapid growth of the sector (Chang
and et.al., 2021). As per the studios it is identified the fact that in United Kingdom almost 40
million people travel by air that is massive in number and further this also increasing every year
with the pace of rising demand in industry. Pandemic has created negative impact over the airline
industry but government start allowing people for travelling and this might assist the whole
industry to grow rapidly. Per capita income in United Kingdom is further rising approximately at

a rate of 6% which will further allow the aviation sector to cater more number of potential
customer every year. Per capita income clearly reflects the buying power of the target customer
and due to its constant rising nature more number of passengers would possible be travel by the
air. Market is open in the industry which offer even to a new entrant to hold a strong position in
the market. Hamburg Airport is the fifth busiest commercial airport in Germany. The data clearly
reflect the possibility of this airport to attract the air travel every year (Due, Nhamo and
Chikodzi, 2021). Low cost airlines always carry the opportunity to attract more number of
customers in comparison to the other commercial airplanes. Customer across the globe wish to
travel in low cost as this would certainly save the finances. After the year 2000 low cost airlines
could complete change the whole synergy of the United Kingdom aviation sector. This could
allow more number of travellers and people to travel in the air.
Situation in Market
In the current situation there are a certain number of airports hold a direct flight to
Hamburg. Flights from London Gatwick, London Heathrow, London Stansted, Manchester and
Edinburgh hold a direct flight to the Hamburg. There are list of airlines companies who run a
flight in between the United Kingdom and Hamburg which comprises to Easyjet, British
Airways, Eurowings, Ryanair and Easyjet. Both Ryanair and Easyjest hold the flights to travel
between United Kingdom and Hamburg. Almost every flight between United Kingdom and
Hamburg take 1 hour and 45 minute to make a reach at the Hamburg airport (Gungor, 2021). The
constant rising rate of per capita income in United Kingdom will certainly allow the aviation
sector to cater more number of potential travellers every year. Low cost strategy is a well
suitable tactic and strategy that new entrant associated with aviation industry of United Kingdom
to grow and succeed in the market place. Hamburg Airport is one of the busiest airport in
Germany which clearly reflect the significance of the destination. People in developed nation
like to travel from air as it saves a huge amounts of time. Especially for the international trip air
travel is the most suitable, convenient and time saving mode of travelling. Also the research
show that air traffic between United Kingdom and Hamburg or different locations of Germany is
increasing every year at a rate of approximately 6% which is carry stating the market situation
(Trends, challenges and opportunities in the Hamburg Metropolitan Region, 2021).
Air traffic become the fundamental basis for the airlines companies to operate business.
Recently due to the covid pandemic the air traffic got stopped at a huge level as international

flights was completed stopped. Now as the market is open international travel started which
could further provide a fundamental support to the airlines sector in order to regain the growth
and boost its rapid development rate. Millions of people start travelling from the United
Kingdom at different parts of the world. Internationally United Kingdom hold a very different
kind of significance due to its geographical locations and the commercial development of
country which allow the destination to attract to the millions of travellers every year from all
across the world. Current situation of the airline industry is growing by nature which allow to the
aviation sector and industry as a whole to constantly rise in the market (Guy, Kerstein and
Brennan, 2021). Even in the existing situation new entrant hold the potential to maximise and
grow in market. The rising demand of the United Kingdom aviation industry allow and provide
an opportunity to new companies as well to generate a growth and achieve a positon where
company can sustain and face the competition in the market. Also, the current market situation is
highly supportive for the low fare airlines and companies. People like to travel from such airline
who charge low air fare that will offer the customer to reach the destination in a more affordable
manner.
Hamburg Airport as the chosen Airport for this study
Hamburg Airport is one of the busiest airport based in Germany. This is identified as the
fifth busiest airport in Germany which clearly denote about the speciality of the destination.
Every year millions of passengers travel from this airport which make it more significant for the
travellers. According to the sales and traffic Hamburg is the fifth busiest airport in Germany
which clearly reflect and demonstrate about the speciality of the airport. Every year millions of
travellers take a flight between London and Hamburg (Hallows and et.al., 2021). According to
the air traffic between London and Hamburg which make it the busiest air traffic between United
Kingdom and Germany. Further, the travellers between the cities belong to every age group and
gender which make it diversified as well. IN recent time Germany become more popular in travel
and tourism as people across the globe like to explore Germany which make the location more
favourable for the Hawai Airlines to start the business by initiating the flight between London
and Hamburg. The infrastructure at the Hamburg Airport is also well advanced and equipped
with latest technology and technique that will allow the airport to maximise the overall growth
and development.

The rationale for opting London airport is such that it increase the number of tourist in the city
and connecting the flights with this airport will be more beneficial for economy purpose.
Moreover, London airport is a crucial component if transportation planning and that is why,
opting this will help to improve the connectivity.
Hawai Airlines
About Company
The organisation is a new entrant in the industry. The company is planning to start its
first flight between London and Hamburg. This is the first airplane that is launched by the
organisation as an initial stage to start the whole business idea.
Table 1 Aircraft in the fleet
PLANE SPEAKING
Seating
capacity
Number of
crew
Crushing
Speed
Range of
Aircraft
Number of
Aircraft
BOEING 737 150 2 Pilots 4
Crew
545 Mph 3600 Miles 1
It can be understood that Boeing 737 with the seating capacity of 150 passengers will be the first
airplane. The optimum capacity utilization along with effective fuel consumption will increase
the potential chances of profit for Airport.
Reason behind people travelling to Hamburg
Hamburg is a city situated in Germany. Due to the commercial development many
professional and graduates (working for advertising) like to go to the city for employment
purpose. Further, the geographical landmark of the city allows the location to attract to the
travellers from across the globe. People like to travel to this place due to its historic and natural
attractions.
Hawai Airlines schedule date
Table 2 Daily schedule of flight
Days of Weeks Period of Departure time Arrival time

Validity and airport and airport
Monday 10 th September Hamburg –
9:30AM
London –
11:15AM
10th September London – 1:30
PM
Hamburg - 3:15
PM
Tuesday 11th September London - 1:30
PM
Hamburg - 3:15
PM
11th September Hamburg -
4:30AM
London -
6:15AM
Wednesday 12th September Hamburg -
9:30AM
London -
11:15AM
Thursday 13th September London – 1:30
PM
Hamburg – 3:15
PM
Friday 14th September London – 1:30
PM
Hamburg – 3:15
PM
14th September Hamburg – 4:30
AM
London – 6:15
AM
Saturday 15th September Hamburg -
9:30AM
London -
11:15AM
Hamburg -
4:30AM
London -
6:15AM
Choice of the Aircraft and schedule
Company offer the best and most convenient air travel that will allocate all types of need
and requirements of the people. The management wish to cater the best and most comfortable air
travel that will allow the organisation to achieve the best level of customer satisfaction against
services allocated to the customers (Heiaas, 2021). The Hawai Airplane set the standard time for
all its flights so that there are not any misunderstanding customers face in respect to the

departure of flight or any other issue. Scheduling of both departure and arrival is at one standard
time which allow the company to attract the customers in the most efficient manner.
Internal Analysis
It helps in internal evaluation for any organisation highlighting all the key factors of an
organisation which they need to work upon and also the good points that exist with an
organisation. The new brand will create an excitement in the customers. Resources are also
available with the organisation as it is initiating at a smaller scale by operating one airplane.
Human resources are skilled thus adding on to the benefits. Whereas lack of experience in the
market is a major disadvantage. New brand always takes time to get settled in the market. Also
inflation in the economy is a core weakness of the company. Further, Digital marketing and
Social media marketing is a great opportunity for the business. Further, skill development
activities for employees can also be increased. Introducing new and latest technology and
systems will be a great opportunity. Focus on increase in young travellers. Competition in the
market has increased by multiple folds. Covid pandemic has restricted the international travelling
many times. There are many environments related impacts as well.
Marketing strategy
Marketing is a practice related to promoting the products and service suffer by the
company in front of the target customers. Marketing is a practice involve carrying out the
promotions in front of the customer base that is targeted by the organisation. Social media
marketing with the support of various social media platforms such as Facebook, Instagram and
many more will be a core strategic choice for the organisation (Higham and et.al., 2021). Digital
marketing practice will also adopt by the company that will include various digital channels such
as YouTube, Hotstar and many more. Email marketing will also use. Search engines will also
take into the action by the marketing tem in order to gain an engagement in respective target
market.
Segment Analysis
Segmentation is the way the product of the company will put in front of the target
customers. Hawai Airlines will segment the services and airline on the basis of demographic
characteristics in which region, age, population, social class and life style of the target customers.
All these will be the fundamental basis for the organisation to segment its product in front of the
target customers in respective target market (Kobierecki, 2021). Through this, company can

target all the age group people in which both male and female are welcome and this in turn help
to attract range of people towards it. This is important for the company to understand all the core
element and factor that affect to the buying behaviour of the potential customers in the market.
All these factors and aspects will fundamentally influence and drive to the organisation to get
influence to the customer buying decision. Currently company is segmenting its brand as a low
cost airplane services that will meet the travel related need of the potential customers.
Product Positioning
Company will use the price positioning strategy. This will allow the organisation to
positon the brand based on the price feature. As the aviation sector is highly competitive which
require the brands to offer the most desirable price possible in order to attract the buying
behaviour of the target customers.
Market Tactic
Hawai Airlines is aiming to target the customers that are more like price sensitive,
belong to all age group and also the customer who like to enjoy the premium services like
providing bar facilities, relaxation chair, spa.
Product
Company will offer its services in all the category economy and business class. Economy
class will hold a lower fare but business class will certainly charge more tickets. Along with this
company will also offer the service to carry bags and luggage (Ng, Farooq and Yang, 2021).
Trained cabin crew will take care of all the needs of customers. Cargo facility will also available
for the people.
Price
It is for one way only and the cost are based by determine the current and past trend analysis.
HAM (airport code of Hamburg): LCY (airport code of London)
Price for Route up to 800 Km:
 Business Flex = £600
 Economy Flex = £500
 Business Fixed = £300
 Economy Fixed = £100 - £200
Estimated Operating Cost

Total operating expense: £120000
Seat KM available is £108600
= £1.105 (120000 / 108600)
Distance between London and Hamburg = 750 KM
Cost per seat for one way: 750 * 1.105
= £829
Cost per passenger: 829 /.9
= £921.11
Profit and loss
Sales (£) £12000000
Less:
Operating cost £4000000
Financial charges £1000000
Logistic cost £700000
Refreshment £500000
Food £600000
Profits £5200000
It is based upon the current industry analysis only.
Market Share
This is estimated that at present Hawai Airlines will be able to generate .05% of the
overall market share of the London Airport. With the help of this business plan, the market share
of the company will be expand because it provide different flights to the people through which
people get advantage of the same. The flight has a maximum capacity of 70 people.
Place
Currently the Hawai Airlines will run the flight between London and Hamburg. The
company has a plan to increase the total number of flights as the growth and progress own by the

organisation (Rutherford and et.al., 2021). At current time company is planning to run a daily
flight between London and Hamburg.
Promotion
Marketing team at Hawai Airlines will use both modern as well traditional marketing or
promotion practice (Tag and Country, 2022). This involve social media marketing, digital
marketing, search engine and such kind of techniques that will allow the organisation to effective
promote the service of the business in front of target customers.
Distribution plan
Company has designed the team of logistics who will take care of all distribution related
need and requirement of business. The team will look at all the aspects such as food, clothing
and all other distribution practices. Professional will take care of costing as well while
channelizing to the distribution practice of the company.
Competitors
Company will face competition from companies like Ryanair, British Airways, and many
more airlines companies (Wittmer and Linden, 2021). Along with this the organisation will also
deal with the competition allocated by other mode of transportation for the passengers.
CONCLUSION
Hawai Airlines is planning to start its first airline between London Hamburg. Company
will adopt the modern as well traditional marketing practices in order to promote the products
and services of the business. The organisation will adopt the low cost practice in order to gain a
competitive advantage in respective target market. The organisation has formed a distribution
team so that all kinds of need of the customer can fulfil by the company.

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