Happy Airways: Low Cost Carrier for UK with McDonnel Douglas MD-80 Series Fleet

Happy Airways is a speculative airline business that aims to provide low cost fares and increase local air transport connectivity for the people of UK. It will operate within the UK borders with a majority of fleets being McDonnel Douglas MD 80 series. The major products and services offered will include flights services, online reservations and e-sales, automated ticketing, automated check-in, baggage handling services and comfortable economy class seats. Happy Airways target is to change the mind-set of people that airline industry is a luxury and it is only meant for the upper segment population. The major goal of Happy Airways is to intensify its reach as well as offering air transport services to a wider segment.

Enterprise Development
Date
2750 Words
Name
Institution Name

Executive Summary (Business aims, financial summary)
Happy Airways is novel low cost carrier in its developmental stages. The aim of this airline is
to situate itself in Nottingham city and offers its customers with low cost fares and increase
local air transport connectivity for the people of UK as a whole. Happy Airways intents to
operate within the UK borders with a majority of fleets being McDonnel Douglas MD 80
series.
Introduction
Name: Happy Airways is a speculative airline business name.
Tagline: Low costs and high quality service
Happy Airways will be operating within the UK borders with a majority of fleets being
McDonnel Douglas MD 80 series. Accordingly, McDonnel Douglas is an associate of Boeing
which has majored in building of short, mid-size as well as mid-range planes of MD-80
family. These aircrafts are specialised for regional routes. Therefore, the fleet of Happy
Airways include a series of MD-80, such as MD-81, MD-82, and MD-83. MD-87 and MD-
88. The McDonnell Douglass MD-80 is a series of two engine, short to medium-range single-
aisle commercial jet airliners. Certainly, these type of planes are suitable for short distance
travels and have a capacity of between 137 to 172 passengers. Accordingly, these type of
airplanes will be suitable for Happy Airways since its operations are exclusively within the
UK borders.
Mission statement:
To provide our customers with most cost effective air transportation service and ensuring
exceptional quality each day.
Vision statement:

To be the top low cost commercial airline in the country in the eyes of our customers,
communities, shareholders and serve individuals who are presently underserved with poor
connectivity as well as outrageous fares.
Elevator pitch
Values
 Trust, honesty and integrity: In all interaction with each other, our clients and our
suppliers
 Acquiescence with regulatory standards: In all practices and decisions every time,
everywhere and always.
 Guarantee to safety: In each decision and practice every time everywhere and
always.
 Practical superiority and unremitting learning: We struggle to do it precisely and
then advance to become better.
 Acting with purpose and urgency: We make decisions to work rightly and then act
on it promptly.
 Courteous communication and fruitful disagreement: To realise the best outcome
as one.
 Hard work: We strive to undertake the most challenging things to making our carrier
better than the rest.
 Pleasurable: We are optimistic individuals who love achievement, learning from
fault and delight in our effort.
 Earnings: We provide a justifiable return to support the growth and development of
our corporation.
OWNER’S BACKGROUND

Reasons for owning your business
Happy Airways has been launched so as to provide the people of UK with the lowest cost
carrier across the country by ensuring that it salvage the currently underserved citizens with
poor airline connectivity and unfordable due to high fares.1
Previous work experience
The pioneer of Happy Airways has sufficient experience in the airline business having
worked as a chief executive officer at British Airways for over five years. As a result, starting
up Happy Airways carrier would not be a challenging task because of the extensive
knowledge and skills in managing British Airways which among the best airline worldwide.
Therefore, as an airline manager the owner has the relevant experience and skills to be in a
position to oversee the running of the newly started carrier service.2
Qualification and education
The founder of Happy Airways is in possession of a Bachelor’s degree and Masters in
management.
Training
In future as the owner of Happy Airways I will major in aviation airway management and
operation major. This program will be of great significance since it prepares one to be in a
better position to apply technical skills and knowledge to the management of Happy Airline
services and operations. The aviation airway management and operations major consists of
ground support and flightline operations, flight safety and security, instructions in airport
1 Burghouwt, Guillaume. Airline network development in Europe and its implications for airport planning. Routledge, 2016.
2 Barry, William Sidney. Airline Management: Business Management in Transport 3. Routledge, 2017.

operations, and aviation industry regulation. These skills will be of great significance to the
management and operations to ensuring that Happy Airline stand out from its competitors.
Hobbies and interest
The hobbies and interests of Happy Airways owner include travelling and adventure and
interest include business travel and marketing.
Additional information
PRODUCTS AND SERVICES
Accordingly, so as to minimise expenses and thus ticket fares, Happy Airways products and
service shall be kept simple.3 Indeed, there are no frills which will be adapted.
What are you going to sell?
The major products and services offered will include:
 Flights services
 Online reservations and e-sales
 Automated ticketing (e-ticketing)
 Automated check-in (e-check-in)
 Baggage handling services
 Comfortable economy class seats
Product/service description
Flights services: The aim of Happy Airways is to offers flight facility to various destinations
across the UK as follows:
3 Lawton, Thomas C. Cleared for take-off: structure and strategy in the low fare airline business. Routledge, 2017.

Nottingham to Leicester
Nottingham to Manchester
Nottingham to London
Nottingham to Liverpool
Nottingham to Bristol
Nottingham to Southampton
Online reservations and e-sales: Happy Airways will offers its customers an easy and quick
access to airline schedules, reservations, flight availability, ticketing among other assortment.
4 Ultimately, this will remove payment of agency commissions to ensuring that it keep the
overall expenses low a saving which will be passed to consumers.
Automated ticketing (e-ticketing): This will allow customers to get their ticket online to
avoid cases of travelling agencies, and travelling to get paper ticket from airline offices.5
Consequently, this also frees the company from tracking, stocking and issuing tickets
allowing savings to both customers and the airline.
Automated check-in (e-check-in): Accordingly, this will eradicate waiting in queues to
check-in for e-ticketed customers, allowing them to approve their personalities get their
boarding permits as well as check-in their luggage. Certainly, this a customer-friendly service
as it eliminate last-minute rush of going to the counter. Additionally it minimises on the
carrier’s needs to workforce check-in desks, employing of indigenous convention ground
staff and control of long queues. 6 Indeed this only increases the resources and money spend
4 Nagle, Thomas T., and Georg Müller. The strategy and tactics of pricing: A guide to growing more profitably. Routledge,
2017.
5 Taneja, Nawal K. Simpli-Flying: optimizing the airline business model. Routledge, 2017.
6 Taneja, Nawal K. Driving airline business strategies through emerging technology. Routledge, 2017.

on an out-dated system which only increase traveller’s inconveniences. Thus, e-check-in has
eliminated such inconveniences.
Baggage handling services: Happy Airways will ensure that luggage handling services are
installed in all its airports.
Comfortable economy class seats: Happy Airways will launch planes with comfortable
economy class seats to enhance customer’s comfort.7
Description of different types of product/service you are going to be selling
Happy Airways will be tasked with offering a large variety of services to its clients both prior
to boarding and throughout the flight voyage with food services and entertainment. Presently,
Happy Airways fleet size will have a fleet size of 50 McDonnel Douglass MD-80 series in its
product. 8 On the other hand the airline will have diverse cabin amenities such as first class,
business class and economy class.
First Class: The seating position in Happy Airways will be provided with leg rest as well as
extra services such as entertainment and message provisions.
Business Class: accordingly, this will be one of the exceptional services provided by Happy
Airways in a majority of its aeroplane. 9 The cabin facilities will be characterised by comfy
seating with additional design and touch screen services for its travellers.
7 Hussain, Rahim, Amjad Al Nasser, and Yomna K. Hussain. "Service quality and customer satisfaction of a UAE-based
airline: An empirical investigation." Journal of Air Transport Management 42 (2015): 167-175.
8 Turan, Onder. "Energy and Exergy (ENEX) Analyses of a MD-80 Aircraft." INTERNATIONAL JOURNAL 5, no. 3
(2016): 206-209.
9 Turan, Onder. "Energy and Exergy (ENEX) Analyses of a MD-80 Aircraft." international journal 5, no. 3 (2016): 206-209.

Economy Class: Happy Airways will also offer best services to the budget class of its carrier.
This cabin will provide passengers with better seats and personalised TV for entertainment as
well as USB ports for diverse uses. 10
Additional information
Also Happy Airways will ensure that there is inflight entertainment by providing passengers
with television and other entertainment portals. Additionally, internet facilities will be
provided in the first class cabin to ensure that passengers can access facilities of surfing the
internet and sending mails while on the journey.11 In addition to on-board services Happy
Airways will avail various exceptional reclines at its aerodromes to make sure that travellers
have an exemplary practise and also provide income for the carrier. The management will
ensure there is availability of check in services, duty free shops, conference zones, Jacuzzi,
nursery and restaurants.12
THE MARKET
Customers Segment
The target customer segment for Happy Airways include both individuals and businesses.
Describe your typical customer
10 Osterwalder, Alexander, Yves Pigneur, Gregory Bernarda, and Alan Smith. Value proposition design: How to create
products and services customers want. John Wiley & Sons, 2014.
11 Taneja, Nawal K. Simpli-Flying: optimizing the airline business model. Routledge, 2017.
12 Lin, Zhibin, and Raffaele Filieri. "Airline passengers’ continuance intention towards online check-in services: The role of
personal innovativeness and subjective knowledge." Transportation Research Part E: Logistics and Transportation
Review 81 (2015): 158-168.

Accordingly, most of the individual customer segment for Happy airline include people
travelling for leisure, students, and labour. On the other hand, the business segment comprise
of companies who in most cases travel for business trips and conferences as well as
transporting of perishable products from one region to another.
Where are your customers based?
Most of Happy Airline customers are based in both small and major cities across the UK.
What prompts your customers to buy your product/services?
The major reason that prompts our customers to buy our products is because of the
exceptional quality of service offered by the airline at a low cost.13 Similarly, customers’
presser to travel by Happy Airways because it has customer-friendly attendants who treat
customers with much respect. Also, Happy Airways management has put in place additional
service such as inflight entertainment and food services which ensures that passengers are
able to entertain their selves and also quench thirst and even have delicacies while on the
journey.14
Factors which help customers in choosing which business to buy from?
Some of the aspects which greatly influence customer choices for Happy Airways include
best quality services at a low cost, the comfort of the cabins as well as their personal
preferences such as travelling for leisure and recreation.15
13 Iatrou, Kostas, and Mauro Oretti. Airline choices for the future: from alliances to mergers. Routledge, 2016.
14 Hagmann, Carmen, Janjaap Semeijn, and David B. Vellenga. "Exploring the green image of airlines: Passenger
perceptions and airline choice." Journal of Air Transport Management 43 (2015): 37-45.
15 Hwang, Jinsoo, and Sunghyup Sean Hyun. "First-class airline travellers' perception of luxury goods and its effect on
loyalty formation." Current Issues in Tourism 20, no. 5 (2017): 497-520.

Have you sold products/services to customers already? If your answer is yes give details
No. The business is preparing to launch its airline so as to provide customers with low cost
fares unlike the currently highly expensive service providers in the market.
Have you got customers waiting to buy your product/service? (yes/no) if yes give details
Yes. Happy Airways has potential customers waiting for its products and services particularly
those who are poorly served with the airline connectivity.
Additional information
Happy Airways target is to change the mind-set of people that airline industry is a luxury and
it is only meant for the upper segment population. The major goal of Happy Airways is to
intensify its reach as well as offering air transport services to a wider segment.
MARKET RESEARCH
Key findings from desk research
Customers are increasingly looking at airlines as hospitality business instead of a means of
moving from one point to another. Nevertheless, Happy Airways has come to change this
illusion and make its customers enjoy low cost fares.
Key findings from filed research
According to research findings from customers it shows that most parts of the UK are poorly
connected in terms of airline because of expensive fares which cannot be afforded by a
majority of the customers.
Key findings from field research

The research indicates that the costly airline fares is the cause of customers viewing air
carrier as a luxury and not a normal means of transport.
MARKETING STRATEGY
What are you going to do? Why have you chosen this
marketing method? How much
will it cost?
Product strategy
New products: Happy Airways
will introduce McDonnell
Douglas MD-80 series planes
since they are suitable for regional
travel
The cost for
introducing
this type of
plane is likely
to cost Happy
Airline
approximately
1 million
pounds
Pricing strategy
Happy Airways will place its fares
at a low cost
One way cost
is
approximately
50 pounds per
person
Promotion strategy
Happy Airways will use internal
media services such as television,
BBC campaign to position it as a
premium airline, CNN New report
testimonials from carrier staff and
customers and sponsoring high
sporting activities such as English
Premier League football.
The cost is
approximated
to be about
500 million
pounds
Place strategy
Happy Airways has developed an
online system of customer
accessing tickets hence there no
need of travelling to the airport to
pick a paper ticket.
The costs for
the online
ticket system
is
approximated
at 350 million
pounds
TOTAL COST 1.85 million
pounds

COMPETITOR ANALYSIS
Name, location
and business
size
Product/service Price Strengths Weaknesses
British Airways Passenger and
cargo services
65 pounds
travelling across
the UK
Strong business
brand.
Supported by
the UK
government
Possession of
its own
engineering
branch to
maintain its
airplane fleet.
High cost
operations
SWOT analysis

 Strengths
 Low cost operations
 Single type of fleet hence reducing
the maintenance costs and easy for
pilot dispatch.16
 Simple proven business model
which constantly delivers at lower
fares.
Weaknesses
 Limited human resource are unable
to handle the uneven situation
 Service resources are restricted by
lower costs
 Opportunities
 New routes and airport deals
 Large market share
 Addition of customer service as a
complete service airline with low
cost fares. 17
Threats
 Entrance of other low cost airline
competitors
 High cost of fuel decline returns
 Upsurge in operation costs
Unique selling point (USP)
Happy Airways has ensured that it provide its customers with high quality services at a lower
cost as compared to its competitors in the industry.
OPERATION AND LOGISTICS
Production
16 Holloway, Stephen. Straight and Level: Practical Airline Economics: Practical Airline Economics. Routledge, 2017.
17 Halpern, Nigel, and Anne Graham, eds. The Routledge Companion to Air Transport Management. Routledge, 2018.

Happy Airways will offer both cargo service and passenger services to its esteem customers
at a low cost all year round.18
Delivery to customers
The airline will employ an online ticket booking system to ensure that its customers are able
to book for their travel online and at the comfort of their homes or work offices.
Payment methods and terms
Happy Airways will allow its customers the following form of payment policy that is PayPal
and credit card to make payment for their online flights.
Suppliers
Name and location
of supplier
Items required and
prices
Payment
arrangements
Reasons for
choosing supplier
McDonnel Douglas
Boeing Company,
Berkeley Missouri.
MD-81, MD-82, and
MD-83. MD-87 and
MD-88.
Mortgage McDonnel Douglas
Boeing Company is
a well-known
aerospace
manufacturing
commercial and
military planes
Premises
18 Hu, Yuzhen, Yan Song, Kang Zhao, and Baoguang Xu. "Integrated recovery of aircraft and passengers after airline
operation disruption based on a GRASP algorithm." Transportation research part E: logistics and transportation review 87
(2016): 97-112.

Happy Airways will operate between the following locations
1. Nottingham to Leicester
2. Nottingham to Manchester
3. Nottingham to London
4. Nottingham to Liverpool
5. Nottingham to Bristol
6. Nottingham to Southampton
7. Nottingham to Manchester
Equipment
If being bought
Items required Already owned New or second
hand?
Purchased
from
Price
MD-81, MD-
82, and MD-83.
MD-87 and
MD-88.
MD-81, MD-
82, and MD-83.
MD-87 and
MD-88.
New McDonnel
Douglas,
Boeing
Company
@ $41.5 million
Transport
Happy Airways will start by having seven flight destination points as follows
8. Nottingham to Leicester
9. Nottingham to Manchester
10. Nottingham to London

11. Nottingham to Liverpool
12. Nottingham to Bristol
13. Nottingham to Southampton
14. Nottingham to Manchester
Legal requirements
Accordingly all commercial airlines operating in the UK are supposed to be in possession of
operating licence from CAA.
Insurance requirement
To be in apposition of getting an airline licence in UK an airline has to demonstrate that it has
enough level of insurance in place.19 Certainly, the minimum levels of insurance cover
depend on the things that are being conveyed and the size of the plane. Therefore, the price
level for Happy Airways is based on the Maximum Take-Off Mass (MTOM) of its number of
passengers.20 As a result the airline will insures itself on the following passengers, cargo,
baggage, third party cover and risk of war and terrorism.
19 Seufert, Juergen Heinz, Amir Arjomandi, and K. Hervé Dakpo. "Evaluating airline operational performance: A
Luenberger-Hicks-Moorsteen productivity indicator." Transportation Research Part E: Logistics and Transportation
Review 104 (2017): 52-68.
20 Rosa, Miguel, Gavin O’Brien, and Vadim Vermeiren. "Spain–UK–Belgium Comparative Legal Framework: Civil Drones
for Professional and Commercial Purposes." In Ethics and Civil Drones, pp. 43-75. Springer, Cham, 2018.

Management and staff
Happy Airway will ensure that it has an extensive training as well as re-educative programs
for its staff as a way to enhance flexibility in the company’s structure. 21 Also, Happy
Airways will strive to ensure that it uphold high customer service ethics in all its operations.22
COSTS AND PRICING STRATEGY
Product/service name Happy Airways
A Number of units in calculation 50
B Product/service components Components cost
C Total product/service cost $2.1 billion
D Cost per unit $41.5 million
E Price per unit $42 million
F Profit margin () $0.5 million
G Profit margin (%) 1.2048
H Mark up (%) 1,2048
FINANCIAL FORECAST
Sales and costs forecast
Month 1 2 3 4 5 6 7 8 9 10 11 12 To
taL
21 Shaw, Stephen. Airline marketing and management. Routledge, 2016.
22 Ha, Hai Thi Hong, and Narameth Nananukul. "Air Cargo Optimization Models for Logistics Forwarders." Advanced
Science Letters 23, no. 5 (2017): 4162-4167.

A Month
name
Jan Fe
b
Ma
rch
Ap
ril
Ma
y
Jun
e
Jul
y
Au
g
Se
p
Oc
t
No
v
Dec
Sales
forecast
B Product/
service
Passenger
fare
£50 £50 £50 £50 £50 £50 £50 £50 £50 £50 £50
C Product/
service
Baggage
£15 £15 £15 £15 £15 £15 £15 £15 £15 £15 £15
Costs
forecast
D Product/
service
risk of
war and
terrorism
£20
000
£20
000
£20
000
£20
000
£25
000
£25
000
£25
000
£25
000
£20
000
£20
000
£20
000
£20000
E Assumptio
ns
(e.g.
Seasonal
The passenger fare and cargo is expected to remain constant throughout
the year while the risk of war and terrorism is likely to change because it
is not easy to predict such cases.

trends)
Cost table
Cost item What is included and how you worked it out Total cost
e-ticket system Online ticket booking £150000
e-check-in system Eradicate delayomh in queues to check-in for
e-ticketed travellers, allowing them to approve
their personalities and get their boarding
authorisations as well as check-in their
luggage.
£20000
BACK-UP PLAN
Short-term plan
Happy airways intents to ensure that its customers start to enjoy low cost fares within the first
three months of operation.
Long-term plan
Happy Airways would like to ensure that it improve the airline connectivity among the
different cities within the UK in the next 2-3 years.

Reference List
Barry, William Sidney. Airline Management: Business Management in Transport 3.
Routledge, 2017.
Burghouwt, Guillaume. Airline network development in Europe and its implications for
airport planning. Routledge, 2016.
Pereira, Bruno Alencar, and Mauro Caetano. "A conceptual business model framework
applied to air transport." Journal of Air Transport Management 44 (2015): 70-76.
Taneja, Nawal K. Simpli-Flying: optimizing the airline business model. Routledge, 2017.
Wensveen, John. Air transportation: A management perspective. Routledge, 2018.
Turan, Onder. "Energy and Exergy (ENEX) Analyses of a MD-80 Aircraft." international
journal 5, no. 3 (2016): 206-209.
Rosa, Miguel, Gavin O’Brien, and Vadim Vermeiren. "Spain–UK–Belgium Comparative
Legal Framework: Civil Drones for Professional and Commercial Purposes." In Ethics and
Civil Drones, pp. 43-75. Springer, Cham, 2018.
Shaw, Stephen. Airline marketing and management. Routledge, 2016.
Lawton, Thomas C. Cleared for take-off: structure and strategy in the low fare airline
business. Routledge, 2017.
Taneja, Nawal K. Driving airline business strategies through emerging technology.
Routledge, 2017.
Nagle, Thomas T., and Georg Müller. The strategy and tactics of pricing: A guide to growing
more profitably. Routledge, 2017.

Hussain, Rahim, Amjad Al Nasser, and Yomna K. Hussain. "Service quality and customer
satisfaction of a UAE-based airline: An empirical investigation." Journal of Air Transport
Management 42 (2015): 167-175.
Osterwalder, Alexander, Yves Pigneur, Gregory Bernarda, and Alan Smith. Value
proposition design: How to create products and services customers want. John Wiley &
Sons, 2014.
Lin, Zhibin, and Raffaele Filieri. "Airline passengers’ continuance intention towards online
check-in services: The role of personal innovativeness and subjective
knowledge." Transportation Research Part E: Logistics and Transportation Review 81
(2015): 158-168.
Hagmann, Carmen, Janjaap Semeijn, and David B. Vellenga. "Exploring the green image of
airlines: Passenger perceptions and airline choice." Journal of Air Transport Management 43
(2015): 37-45.
Iatrou, Kostas, and Mauro Oretti. Airline choices for the future: from alliances to mergers.
Routledge, 2016.
Hwang, Jinsoo, and Sunghyup Sean Hyun. "First-class airline travellers' perception of luxury
goods and its effect on loyalty formation." Current Issues in Tourism 20, no. 5 (2017): 497-
520.
Holloway, Stephen. Straight and Level: Practical Airline Economics: Practical Airline
Economics. Routledge, 2017.
Halpern, Nigel, and Anne Graham, eds. The Routledge Companion to Air Transport
Management. Routledge, 2018.

Hu, Yuzhen, Yan Song, Kang Zhao, and Baoguang Xu. "Integrated recovery of aircraft and
passengers after airline operation disruption based on a GRASP algorithm." Transportation
research part E: logistics and transportation review 87 (2016): 97-112.
Seufert, Juergen Heinz, Amir Arjomandi, and K. Hervé Dakpo. "Evaluating airline
operational performance: A Luenberger-Hicks-Moorsteen productivity
indicator." Transportation Research Part E: Logistics and Transportation Review 104
(2017): 52-68.
Ha, Hai Thi Hong, and Narameth Nananukul. "Air Cargo Optimization Models for Logistics
Forwarders." Advanced Science Letters 23, no. 5 (2017): 4162-4167.