Kyrgyz Airways

Business Plan

INSIDE THIS REPORT

Our Mission
“Our mission is to provide our
passengers with a safe,
Business Overview comfortable, and enjoyable
flying experience while
contributing to the growth and
development of the aviation
Products and Services
industry in Kyrgyz Republic. We
strive to achieve this by
offering exceptional customer
Market Analysis service, utilizing modern
technology and equipment,
and maintaining a team of
Team and Management highly skilled professionals
committed to our core values
of safety, reliability, and
efficiency.”
Financial Forecast
 PREAMBLE
This business plan is presented here to benefit and promote the
operations of “Kyrgyz Airways”. The purpose of this plan is to lay out a
clear and decisive path of action in order to execute the sustainable
and successful development of airline business in Kyrgyz Republic and
simultaneously create and maintain frequent returns on the adopted
business model.

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DISCLAIMER
This document has been prepared for informational purposes only. Information contained in
this business plan has not been independently verified and no representation or warranty,
express or implied, is made and no responsibility is or will be accepted concerning the
accuracy, reliability, or completeness of any such information. This document is to be used as
a basis for continued discussions and does not constitute a commitment in any manner.

The information and opinions contained in this document are not intended to be the sole basis
upon which the implementation of the opportunity contemplated herein (the “Opportunity”)
can be decided. It is therefore advisable for the recipient(s) to make its/their own judgment
and assessment of the information and the Opportunity contained in this document. Opinions
expressed herein reflect the judgment as of the date of this document and may be subject to
change without notice, whether specific to the Opportunity or general, which may have a
material impact on any such opinions. No responsibility is undertaken herein for any
consequences resulting from the use of this document as well as the reliance upon any opinion
or statement contained herein or for any omission.

The preparation of this document is intended for information purposes only and is not tailored
to the specific investment objectives, financial situation, or needs of any specific person or
entity who may receive this material. Investors should receive independent financial advice
regarding the appropriateness of investing in any securities, financial instrument, or investment
strategy discussed in this document. This document is intended to be directed to qualified
investors only.

It is also germane to refer that VMO Management Ltd. has been retained to develop the
business plan for Kyrgyz Airways. Financial, business, and situational matters have been looked
into in light of the best management consultancy practices while expressing opinions of any
sort. Nonetheless, the assumptions relied upon alongside the limiting conditions have been
thoroughly furnished at the end of this document.

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TABLE OF CONTENTS
1. BUSINESS OVERVIEW ..................................................................................................................... 6

1.1. MISSION STATEMENT .......................................................................................................................... 7

1.2. VISION STATEMENT ............................................................................................................................. 7

1.3. KEY OBJECTIVES ................................................................................................................................. 8

1.4. CORE VALUES .................................................................................................................................... 9

1.5. FINANCIAL HIGHLIGHTS ................................................................................................................... 10

2. MARKET ANALYSIS ...................................................................................................................... 11

3. COMPETITORS’ ANALYSIS ........................................................................................................... 16

4. REVENUE MODEL ......................................................................................................................... 19

5. SWOT ANALYSIS .......................................................................................................................... 20

6. MARKETING STRATEGY ............................................................................................................... 21

7. TEAM AND MANAGEMENT ......................................................................................................... 22

7.1. BUSINESS MODELLING & COMPANY STRUCTURE ........................................................................... 22

7.2. OUR ORGANIZATION ....................................................................................................................... 23

7.3. MANAGEMENT STRUCTURE ............................................................................................................. 23

7.4. BUSINESS STRUCTURE........................................................................................................................ 24

7.5. TRAINING .......................................................................................................................................... 27

7.6. FEEDBACK & CONTROL ................................................................................................................... 27

8. FINANCIAL FORECAST ................................................................................................................ 28

8.1. FIVE-YEARS STATEMENT OF ACTIVITIES PROJECTION ..................................................................... 28

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 8.2. FIVE-YEARS PROJECTED STATEMENT OF FINANCIAL POSITION...................................................... 29

8.3. FIVE-YEARS PROJECTED CASH FLOW ............................................................................................. 30

8.4. VISUALIZATIONS ............................................................................................................................... 31

8.5. BASIC ASSUMPTIONS ....................................................................................................................... 33

8.6. COMPANY VALUATION ................................................................................................................... 34

8.7. ENTERPRISE VALUE ........................................................................................................................... 34

8.8. INVESTOR PAYBACK PERIOD ........................................................................................................... 35

8.9. SENSITIVITY ANALYSIS ....................................................................................................................... 37

9. ASSUMPTIONS & LIMITING CONDITIONS ................................................................................... 39

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1. BUSINESS OVERVIEW

Kyrgyz Airways is the first of its kind internationally managed national airlines of Kyrgyz Republic
that aims to provide safe, economical, and reliable air transport for inbound and outbound
traffic and showcase Kyrgyzstan as a preferred destination by offering a strong competition to
all the one stop international airlines operating currently in the region.

Today customers have choice to only one stop carriers with extended layovers through hubs
that is tremendously increasing journey time and resulting in higher fares. There is no national
airline in Kyrgyzstan and there is an acute shortage of Aviation personnel with international
experience. Our plan is to bring in a strong expat team who have extensive global experience
and use the low cost of operations In Kyrgyzstan to have the edge over the current one stop
carriers who are operating from much more expensive bases.

Kyrgyz Airways aims to target religious traffic to Saudi Arabia from the catchment area of 16
million Muslim population, 40,000 students from India and Pakistan, VFR traffic, nature seekers,
inbound tourism from GCC, the Russian market which is now struggling with reduced capacity
due to sanctions, Chinese market, and outbound tourism to south India. Additional Kyrgyz
Airways has already completed discussion with major GCC airlines to carry traffic to their hubs
and feed their Global networks.

It is pertinent to mention here that today the region has been identified as the largest growing
low-cost market in the world so there is no better time to enter and consolidate and Kyrgyz
Airways offers domestic and international flights to meet the growing demand for air travel in
the region. We will operate a modern fleet of aircraft, including narrow-body and wide-body
planes, equipped with advanced technology for safety, efficiency, and comfort. The
company will prioritize safety as its top priority and comply with all safety regulations to ensure
the safety of its passengers, crew, and aircraft. To establish a strong brand reputation and gain
a competitive advantage, the airline will focus on providing exceptional customer service to
its passengers. This will include a hassle-free booking process, comfortable seating, timely and
efficient handling of luggage, and friendly and helpful staff.

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 1.1. MISSION STATEMENT

Our mission is to provide our passengers with a safe, comfortable, and enjoyable flying
experience while contributing to the growth and development of the aviation industry in
Kyrgyz Republic. We strive to achieve this by offering exceptional customer service, utilizing
modern technology and equipment, and maintaining a team of highly skilled professionals
committed to our core values of safety, reliability, and efficiency.

1.2. VISION STATEMENT

Our vision as a first national airline company of Kyrgyz Republic is to be the leading and most
trusted airline in the region, providing exceptional service and connecting Kyrgyzstan with the
world. We are committed to offering safe, reliable, and affordable s travel to our passengers,
while maintaining a high level of customer satisfaction. Our goal is to expand our network to
new destinations and continue to innovate in the aviation industry, while promoting the culture
and beauty of Kyrgyzstan to the world.

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 1.3. KEY OBJECTIVES

Kyrgyz Airways Company holds the following key objectives which define the purpose of the
organizational existence.

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 1.4. CORE VALUES

Kyrgyz Airways is an organization that is guided by values. A company that is guided by its
values is a company that will always achieve its goals. The following are our values that they
believe in religiously and that they strictly follow in their work and life:

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 1.5. FINANCIAL HIGHLIGHTS

“Kyrgyz Airways” has seen potential growth in the business. Our financial forecast shows that
the company can utilize its assets to stimulate business growth in the nearest future.

Following is a rough projection of the financial situation of the business for the next 5 years.

All Amounts in USD

2022 2023 2024 2025 2026

Revenue 101,265,500 208,455,250 288,848,250 353,286,750 428,847,250

Cost of Sales (13,090,551) (25,608,001) (34,087,800) (39,861,016) (46,311,560)

Gross Profit 88,174,949 182,847,249 254,760,450 313,425,734 382,535,690

Operating Expenses (85,097,433) (164,069,542) (220,447,319) (267,796,824) (329,850,120)

Net Profit (2,055,817) 12,392,155 25,592,808 37,315,597 44,942,444

Net Profit Margin -2.03% 5.94% 8.86% 10.56% 10.48%

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2. MARKET ANALYSIS

The global airline market was valued at

$332.2 billion in 2020, and is projected to $744 B

reach $744 billion in 2030, registering a

CAGR of 11.72%1.
CAGR 12.70%

The major factor driving the market growth

$332.60 B
for this market is the speed of transport and
reasonable prices. when compared to other
means of transport airways is the fastest and
most reliable way to transport goods across
2020 2030
the globe.

The aviation industry in Kyrgyz Republic has shown steady growth over the past decade, with
increasing demand for air travel both domestically and internationally. The country is
strategically located between China, Kazakhstan, Uzbekistan, and Tajikistan, making it a key
transit hub for air travel in the region.
The air transport sector makes a
major contribution to Kyrgyzstan’s
economy. Airlines, airport
operators, airport on-site enterprises
(restaurants and retail), aircraft
manufacturers, and air navigation
service providers employ 3,000
people in Kyrgyzstan. In addition,
by buying goods and services
from local suppliers the sector

1https://www.prnewswire.com/news-releases/global-airlines-market-report-2022-market-to-reach-744-billion-by-2026---emerging-new-technologies-for-urban-

mobility-to-step-up-the-excitement-in-the-market-post-pandemic-301577764.html

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 supported another 16,000 jobs. On top of this, the sector is estimated to support a further
4,000 jobs through the wages it pays its employees, some or all of which are subsequently
spent on consumer goods and services. Foreign tourists arriving by air to Kyrgyzstan, who
spend their money in the local economy, are estimated to support an additional 13,000 jobs.
In total 36,000 jobs are supported by air transport and tourists arriving by air.

The air transport industry, including airlines and its supply chain, are estimated to support
US $153 million of GDP in Kyrgyzstan. Spending by foreign tourists supports a further US $45
million of the country’s GDP, totaling US $198 million. In total, 2.4 percent of the country’s
GDP is supported by inputs to the air transport sector and foreign tourists arriving by
air2.
Air transport facilitates flows of goods, investment and people.

The most important benefits from air transport go to passengers and shippers and the
spillover impacts on their businesses. The value to passengers, shippers and the economy
can be seen from the spending of foreign tourists and the value of exports (though note
these figures include all modes of transport). A key economic flow, stimulated by good air
transport connections, is foreign direct investment, creating productive assets that will
generate a long-term flow of GDP.

2 https://www.iata.org/en/iata-repository/publications/economic-reports/Kyrgyzstan-value-of-aviation/

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Air transport connects Kyrgyzstan to cities around the world. Air transport generates benefits
to consumers and the wider economy by providing speedy connections between cities.
These virtual bridges in the air enable the economic flows of goods, investments, people and
ideas that are the fundamental drivers of economic growth.

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Passenger Facilitation and Visa Openness
Kyrgyzstan’s passenger facilitation (2.6/10) scores below the average of Europe (4/10). On
the World Economic Forum’s Travel & Tourism Competitiveness Index, the country ranks 23rd
out of 140 countries for visa openness. In all these scores, higher is better.

Measure of air cargo trade facilitation

Kyrgyzstan’s facilitation of air cargo through its regulations ranks 112th out of 124 countries in
terms of the Air Trade Facilitation Index (ATFI) and 42nd out of 135 countries in terms of the
eFreight Friendliness Index (EFFI) globally.

Domestic Market
Kyrgyzstan's domestic market is primarily served by two airlines, Tezjet and Avia Traffic
Company. Both airlines operate a fleet of narrow-body aircraft and serve key domestic
routes, including Bishkek-Osh, Bishkek-Jalal-Abad, and Bishkek-Batken. The market is
relatively underserved, with limited competition, which presents an opportunity for new
airlines to enter the market and establish a strong foothold.

International Market
Kyrgyzstan's international market is primarily served by foreign airlines, with limited direct
flights to key international destinations. Currently, Aeroflot, Turkish Airlines, Ural Airways,
Jazeera Airways, Flydubai, Air Arabia, Pegasus operate flights to Kyrgyzstan's main

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 international airport, Manas International Airport located in the capital city of Bishkek and
Osh International Airport in Osh the second biggest city in Kyrgyzstan.

Market Demand Forecast

Air transport in Kyrgyzstan is forecast to grow by 167% in the next 20 years under the
“current trends” scenario. This would result in an additional 2.7 million passenger
departures by 2038. If met, this increased demand would support approximately US $530
million of GDP and around 45,400 jobs.

Passengers USD GDP Jobs

2018 1.6 M $198 M 35,770

Current Trends 4.3 M $530 M 45,387

2023

Upside 6.1 M $750 M 65,709

Downside 3.5 M $430 M 36,943

The demand for air travel in the region is driven by several factors, including business travel,
tourism, and the large number of Kyrgyz citizens living abroad. The tourism industry in Kyrgyz
Republic has been growing rapidly, with the country's natural beauty, unique culture, and
historical sites attracting more visitors each year.

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3. COMPETITORS’ ANALYSIS

Competitive analysis is a crucial process that helps businesses understand their market and
competition better. In the case Kyrgyz Airways, the competitive landscape can be analyzed
using various parameters, including pricing, route network, customer service, and fleet size,
among others. Here is a detailed competitor’s analysis for an airline company operating in
Kyrgyz Republic:

Fly Dubai
A budget airline based in Dubai, United Arab Emirates, Flydubai operates flights between
Dubai and Bishkek, the capital of Kyrgyz Republic, offering passengers affordable
connections to the Middle East and beyond.

Air Arabia
A low-cost airline from the United Arab Emirates, Air Arabia connects the Kyrgyz Republic
with Sharjah, one of the UAE's major cities. This connection provides a convenient link for
travelers to access the Middle East and North Africa region.

Turkish Airlines
As the national flag carrier of Turkey, Turkish Airlines operates flights from Istanbul to Bishkek,
offering convenient connections between Kyrgyzstan and Europe, Middle East, and other
international destinations through its extensive network.

Pegasus
A Turkish low-cost airline, Pegasus Airlines operates flights from Istanbul to Bishkek, providing
a cost-effective option for travelers seeking connections between the Kyrgyz Republic and
Turkey, as well as onward flights to Europe and the Middle East.

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Aeroflot
Russia's largest airline, Aeroflot connects the Kyrgyz Republic with Moscow, offering
passengers convenient connections to Russia and beyond through its extensive network. The
airline operates flights between Moscow's Sheremetyevo International Airport and Bishkek's
Manas International Airport.

Air Astana
As the national carrier of Kazakhstan, Air Astana operates flights between Almaty and Nur-
Sultan, Kazakhstan's largest cities, and Bishkek. The airline provides convenient connections
for travelers between Kyrgyzstan and Kazakhstan and further access to Central Asia and
beyond.

Jazeera Airways

A Kuwaiti low-cost airline, Jazeera Airways operates flights between Kuwait City and Bishkek,
connecting the Kyrgyz Republic with the Persian Gulf region and providing access to
destinations throughout the Middle East.

Aero Nomad
Aero Nomad's operations in Kyrgyz Republic include flights to a number of domestic
destinations, such as Osh, Batken, and Jalal-Abad, as well as international destinations such
as Tashkent, Uzbekistan. The airline operates a fleet of Embraer E190-E2 and E195-E2 aircraft,
which are modern and fuel-efficient.

Aero Nomad also offers charter flights for individuals and groups, as well as cargo
transportation services. The airline has a commitment to safety and quality service and is
focused on meeting the needs of its customers.

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Avia Traffic Company

Avia Traffic Company is a Kyrgyz airline that operates scheduled domestic and international
flights from its hub at Manas International Airport. The airline operates a mixed fleet of Boeing
737, Airbus A320, and Embraer E190 aircraft. Avia Traffic Company is known for offering
competitive fares, and it has a broad network of domestic and international routes, serving
destinations across Central Asia, Russia, and China.

SCAT Airlines
SCAT Airlines is a Kazakhstan-based airline that operates scheduled domestic and
international flights from its hub at Shymkent International Airport. The airline serves several
destinations in Kyrgyzstan, including Bishkek and Osh, as well as other destinations across
Central Asia, Russia, and the Middle East. SCAT Airlines operates a mixed fleet of Boeing and
Airbus aircraft, and it offers a basic level of service to its passengers.

S7 Airlines

S7 Airlines is a Russian airline that operates scheduled domestic and international flights
from its hub at Domodedovo International Airport in Moscow. The airline serves several
destinations in Kyrgyzstan, including Bishkek and Osh, as well as other destinations across
Central Asia, Russia, Europe, and Asia. S7 Airlines operates a modern fleet of Airbus and
Boeing aircraft, and it offers a full-service experience to its passengers, including inflight
meals, entertainment, and baggage allowances.

In summary, the airline industry in Kyrgyz Republic is highly competitive, with several airlines
operating both domestic and international flights. Air Manas and Avia Traffic Company are
the main low-cost carriers in the market, while S7 Airlines offer a full-service experience. SCAT
Airlines also competes in the market, primarily focusing on domestic and regional flights.
Pricing, route network, customer service, and fleet size are essential parameters that airlines
must consider competing effectively in this market.

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4. REVENUE MODEL

The entity will derive its income from the following major revenue streams:

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5. SWOT ANALYSIS

The SWOT Analysis is a necessary part of us because it gives an in-depth look at our Strengths,
Weaknesses, Opportunities, and Threats.

Strengths
• First national airline of the Kyrgyz Republic
• Serving in domestic and international routes
Strengths
• Good relationships with key stakeholders, such as
government agencies and tourism boards
• Modern fleet of aircrafts with advanced
Weaknesses
technology
• Strong and experienced leadership team
SWOT
Weaknesses
Analysis
• Limited route network compared to larger
Opportunitie
international airlines.
s
• Limited financial resources compared to larger
international airlines.
Threats • Dependence on seasonal tourism for revenue
generation
• Limited access to major international airports

Opportunities
• Expansion of the route network to new domestic and international destinations
• Increasing demand for air travel in the region
• Increasing popularity of tourism in Kyrgyz Republic
• Development of new tourism products and services in the region
• Growth in demand for cargo transportation services

Threats
• Intense competition from larger international airlines
• Political instability in the region
• Fluctuating fuel prices affecting operating costs
• Economic downturns affecting passenger demand and tourism industry

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6. MARKETING STRATEGY

The 4P marketing mix of ICC is provided as under:

Place
The place element of the
Product marketing mix refers to the
The product is the core distribution channels used
offering of Kyrgyz Airways, to reach customers. Kyrgyz
which includes passenger Airways can reach its
transport, cargo transport, customers through various
charter flights, and channels, including its
maintenance and repair website, travel agencies,
services. Kyrgyz Airways and online booking
focuses on developing a platforms. The airline would
competitive product by ensure that its services are
investing in the quality of its easily accessible and
services, improving the convenient for customers.
inflight experience, and
ensuring customer
satisfaction.

Promotion
Price
Promotion refers to the
Price is a crucial element in
marketing activities used to
the marketing mix, and Kyrgyz
raise awareness about Kyrgyz
Airways considers various
Airways' services. The airline
factors when setting its prices.
can use various promotional
Kyrgyz Airways offers ultra-low
activities, including advertising,
prices to customers. The airline
social media marketing, and
considers cost of operations,
public relations, to reach its
competitor prices, and
target audience. Kyrgyz
demand for its services when
Airways can also collaborate
determining the prices.
with travel agencies and other
industry partners to promote its
services.

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7. TEAM AND MANAGEMENT

7.1. BUSINESS MODELLING & COMPANY STRUCTURE

The basis of an organization's design is its key design concepts. These ideas are used to
transform the value chain and operational model into a functional and positional
organizational structure.

Value

Customer Function Industry Organizational

Scalability
Centricity Segregation Specialization Efficiency

Create a Distribute critical To facilitate the Align the business Create a flat, lean
pleasurable activities across rapid development development organization.
customer functional of new and account
experience domains. services/products, management
flexibility and teams with the
Improve the
scalability are industries.
Separate critical control span for
required.
Make an effort to support management
keep things competencies functions.
simple for our from operational Invest in specialist
customers responsibilities Ability to adapt resources that are

and centralize swiftly to market relevant to our

Ensure job
them. changes company, area,
continuity and
or service.
Have a single eliminate
point of contact potential
Separate the
for all customers Customer support bottlenecks,
activities of
services should be particularly in the
business
modular to absence of
development
promote greater managers.
and account
customer
management.
satisfaction.

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 7.2. OUR ORGANIZATION

The human resources component of the entire service delivery must be a major element. We
want to gain a competitive edge by being able to completely satisfy our clients' demands by
having passionate, capable, and empowered employees dealing with them. We also plan to
provide our employees with adequate decision-making power to ensure that clients are
served quickly and that service delivery times are cut in half. To guarantee that employment
and pay packages are competitive, they must be evaluated against market standards for
employees' activities.

7.3. MANAGEMENT STRUCTURE

Our management strategy is focused on accountability and respect for one another. We
understand the importance of continual change to adapt to the changing environment. We
will have a flexible framework that will allow us to do the above tasks quickly and efficiently.
According to our flexible structure, we will use below the easy organizational structure to have
in place for the key personnel.

Board of Directors

Chief Executive
Audit Commission Lawyer
Officer (CEO)

Chief Financial Chief Operations Marketing

HR Manager Chief Accountant Admin Manager
Officer (CFO) Officer Manager

Flight Operations Commercial

Accountant HR Officer Marketing Staff Accountant Support Staff
Department Department

Maintenance and
Engineering Network Planning Cashier
Department

Ground
Revenue
Operations
Management
Department

Customer Service
Pricing
Department

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 7.4. BUSINESS STRUCTURE

We are quite aware of just how important it is to build up a solid business structure capable of
supporting a top-notch eatery. For this reason, we are committed to hiring only the best
individuals within our specified area of operations. Among the qualities we look for in
candidates include hardworking, result-driven, creative, customer-centric, and, most
importantly, qualified.

For the roles and responsibilities, we look at the job description that fits within our company’s
business structure:

The CEO
• Develop and uphold the company’s • Ensure compliance with laws and
culture and mission/vision. regulations
• Act as the figurative head of the
organization when communicating • Implement strategic plans by working • Report irregularities in the internal
with investors, government entities with senior stakeholders. control to the board
and the public.
• Evaluate and track the success of the • Set out risk management policies
• Lead the development of the company in reaching its goals.
organization’s long- and short-term
Lawyer
strategies.
Board
• Prepare the appropriate legal
• Manage overall operations and
• Govern the organization and the documents for trial or court
make major decisions affecting the
relationship with the CEO proceedings.
organization.

• Establish a policy-based governance • Evaluate new business partnerships

• Manage the organization’s
system with vendors and subcontractors.
resources.

• Provide direction for the organization • Represent the company in legal

• Negotiate or approve agreements
proceedings.
and contracts for the organization.
• Recruit, supervise, retain, evaluate
and compensate the managers • Design and oversee the company’s
• Manage company organizational
policy and position on legal matters.
structure.
• Fiduciary duty to protect the
organization’s assets and member’s • Protect the company against legal
• Communicate with the board of
investment risks and violations.
directors.

• Monitor and control auditing • Examine the legal issues related to

• Assess and minimize risks to the
function new products and services.
company.

• Set strategic goals. Audit Commission • Negotiate deals on behalf of the

company.

• Provide company-wide leadership. • Oversee the financial reporting

• Serve as the company’s primary
spokesperson.
• Guide management on regulatory
system of the entity
and compliance issues to ensure
compliance with legal regulations.
• Monitor the audit process

• Identify and address companywide • Set internal controls CFO

problems.

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 • Drive the company’s financial including recruitment, training, and • Training, counselling, and coaching
planning development our staff.

• Perform risk management by • Ensure that the airline's operations • Resolving conflicts through positive
analysing the organization’s liabilities are cost-effective and efficient by and professional mediation.
and investments managing budgets and resources
• Carrying out necessary
• Decide on investment strategies by • Develop and maintaining administrative duties.
considering cash and liquidity risks relationships with industry
stakeholders, such as airports, • Conducting performance and wage
• Control and evaluate the regulatory agencies, and vendors reviews.
organization’s fundraising plans and
capital structure • Identify and addressing operational • Developing clear policies and
challenges and issues, including ensuring policy awareness.
• Ensure cash flow is appropriate for equipment failures, weather
the organization’s operations disruptions, and staffing shortages • Creating clear and concise reports.

• Supervise all finance personnel • Participate in strategic planning • Giving helpful and engaging
(controllers, treasurers, etc.) and decision-making processes to presentations.
ensure the airline's long-term
• Manage vendor relationships success and growth • Maintaining and reporting on
workplace health and safety
• Prepare reliable current and • Represent the airline at industry compliance.
forecasting reports events and conferences, and
promoting its operations and • Handling workplace investigations,
• Set up and oversee the company’s achievements disciplinary, and termination
finance IT system procedures.
Marketing Manager
• Ensure compliance with the law and • Maintaining employee and
the company’s policies • Recruit, hire, and train marketing workplace privacy.
team
• Manage a team of financial • Leading a team of junior human
controllers and financial analysts. • Set sales goals, compare resource managers.
performance to goals, and adjust
COO goals as needed Accountant
• Assess current team processes and
• Develop and implementing • Manage and oversee the entire
procedures, identify opportunities for
strategies to ensure the smooth and accounting team
improvement, and implement them
efficient operation of the airline's
various departments. • Conduct all necessary training to
• Develop individual quotas and
keep the team's skills and knowledge
assign territories for team members
• Ensure that the airline's operations up to date
comply with regulatory
requirements and safety standards • Provide detailed and accurate sales
• See that tax interviews are
and marketing forecasts
conducted properly with clients
• Establish and monitoring
operational performance metrics, • Coach, mentor, and provide
• Ensure that all necessary documents
such as on-time performance, feedback to team members
are requested, collected, and
completion rates, and compiled
maintenance metrics • Foster a competitive yet
collaborative team environment
• Review corporate and personal
• Collaborate with other income tax returns to ensure
departments, such as Finance and HR Manager accuracy
Marketing, to develop and
implement cross-functional • Consistently recruiting excellent staff. • Advise business owners and
initiatives and programs individuals regarding the tax code
• Maintaining a smooth onboarding
• Lead and managing the airline's process. • Oversee the processing of state and
department heads and managers, federal payroll taxes

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• Maintain current and garner new • Uphold the excellent reputation of • Maintain highly organized and
client relationships our firm updated client files

• Monitor and mentor/train junior staff, • Maintain constant communication • Work collaboratively with other
clerks, and bookkeepers with the IRS, state agencies, and our teams to achieve shared goals
clients
• Detect and address potential • Report directly to the operations
compliance issues proactively • See that tax consults and manage
onboarding procedures are in place
• Maintain compliance with all state for new clients
and federal regulations at all times

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 7.5. TRAINING

In-house training will be ongoing, with external training scheduled regularly, particularly in
response to market changes. This is to guarantee that we are always able to anticipate the
demands of our markets–a proactive strategy that is critical for gaining and maintaining a
competitive edge. We will also receive external training to guarantee that we are up to date
on the newest culinary and hospitality arts. This will also guarantee that our employees can set
high criteria, or benchmarks, based on the norms of these companies.

7.6. FEEDBACK & CONTROL

• We will urge our workers to provide any recommendations they may have for improving
any of the company's functions–we believe in an open-door policy. A culture like this
promotes innovation and creativity, which leads to job satisfaction and enrichment.

• We commit to formalizing and measuring cross-functional working communication

regularly to guarantee that all departments work together to achieve company goals

• Important notifications and changes will be conveyed to workers regularly to keep them
informed and promote a sense of belonging and unity within the company.

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8. FINANCIAL FORECAST

8.1. FIVE-YEARS STATEMENT OF ACTIVITIES PROJECTION

_ _ _All Amounts in USD _ _ _

2024 2025 2026 2027 2028

Revenue
101,265,500 208,455,250 288,848,250 353,286,750 428,847,250

Cost of Sales
(13,090,551) (25,608,001) (34,087,800) (39,861,016) (46,311,560)

Gross Profit
88,174,949 182,847,249 254,760,450 313,425,734 382,535,690

Operating
Expenditures (85,097,433) (164,069,542) (220,447,319) (267,796,824) (329,850,120)

Earnings before
interest, tax,
depreciation, and
amortization 3,077,516 18,777,707 34,313,131 45,628,909 52,685,570

Depreciation &
Amortization Expense (4,133,333) (3,733,333) (5,373,333) (4,849,333) (4,377,733)

Earnings before
interest and tax (1,055,817) 15,044,374 28,939,798 40,779,576 48,307,836

Interest Expense
(1,000,000) (2,000,000) (2,000,000) (1,500,000) (1,000,000)

Profit before tax

(2,055,817) 13,044,374 26,939,798 39,279,576 47,307,836

Tax Expense
- (652,219) (1,346,990) (1,963,979) (2,365,392)

Profit after tax

(2,055,817) 12,392,155 25,592,808 37,315,597 44,942,444

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 8.2. FIVE-YEARS PROJECTED STATEMENT OF FINANCIAL POSITION

_ _ _All Amounts in USD_ _ _

2024 2025 2026 2027 2028

Non-current assets

Fixed Assets
36,220,000 32,590,000 47,320,000 42,574,000 38,299,600
Intangibles
946,667 843,333 740,000 636,667 533,333

37,166,667 33,433,333 48,060,000 43,210,667 38,832,933

Current assets

Cash and Bank

20,524,569 35,359,631 32,548,888 61,283,755 97,523,933
Account Receivable
8,323,192 17,133,308 23,740,952 29,037,267 35,247,719

28,847,761 52,492,939 56,289,840 90,321,022 132,771,652

Total Assets
66,014,428 85,926,273 104,349,840 133,531,688 171,604,585

Owners’ Equity

Share capital
10,000,000 10,000,000 10,000,000 10,000,000 10,000,000
Retained Earnings
(2,055,817) 10,336,338 35,929,146 73,244,743 118,187,187

7,944,183 20,336,338 45,929,146 83,244,743 128,187,187

Non-Current Liabilities

Long-term Loans
50,000,000 37,500,000 25,000,000 12,500,000 -

50,000,000 37,500,000 25,000,000 12,500,000 -

Current Liabilities

Accounts Payable
8,070,245 15,589,935 20,920,695 25,286,946 30,917,398
Short-Term Loan
Payable - 12,500,000 12,500,000 12,500,000 12,500,000

8,070,245 28,089,935 33,420,695 37,786,946 43,417,398

Total owners’ equity and

liabilities 66,014,428 85,926,273 104,349,840 133,531,688 171,604,585

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 8.3. FIVE-YEARS PROJECTED CASH FLOW

_ _ _All Amounts in USD_ _ _

2024 2025 2026 2027 2028

Profit/(Loss) before tax
(2,055,817) 13,044,374 26,939,798 39,279,576 47,307,836
Additions to Net
Earnings

Interest Expense
1,000,000 2,000,000 2,000,000 1,500,000 1,000,000
Increase
(Decrease) in Current
Operating Liabilities 8,070,245 7,519,690 5,330,760 4,366,251 5,630,453
Increase
(Decrease) in Current
Operating Assets (8,323,192) (8,810,116) (6,607,644) (5,296,315) (6,210,452)
Non-cash losses
and expenses
included in net
income 4,133,333 3,733,333 5,373,333 4,849,333 4,377,733

4,880,387 4,442,907 6,096,449 5,419,269 4,797,734

Interest Paid
1,000,000 2,000,000 2,000,000 1,500,000 1,000,000
Tax Paid
- 652,219 1,346,990 1,963,979 2,365,392

(1,000,000) (2,652,219) (3,346,990) (3,463,979) (3,365,392)

Net Cash Flow From

Operating Activities 1,824,569 14,835,062 29,689,257 41,234,866 48,740,178

Purchase of assets
(41,300,000) - (20,000,000) - -
Net Cashflow from
Investing Activities (39,475,431) 14,835,062 9,689,257 41,234,866 48,740,178

Increase in Share
Capital 10,000,000
Issuance of Long-
term Loan 50,000,000
Capital Repayment
- - (12,500,000) (12,500,000) (12,500,000)
Net Cashflow from
Financing Activities 20,524,569 14,835,062 (2,810,743) 28,734,866 36,240,178

Cash at Beginning of
Year - 20,524,569 35,359,631 32,548,888 61,283,755

Cash at End of Year

20,524,569 35,359,631 32,548,888 61,283,755 97,523,933

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 8.4. VISUALIZATIONS

Sales Trend

428,847,250
353,286,750
288,848,250
208,455,250
101,265,500

2024 2025 2026 2027 2028

Gross Margin

89.20%

88.72%

88.20%

87.72%

87.07%

2024 2025 2026 2027 2028

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 EBITDA Margin

12.92%
12.29%
11.88%

9.01%

3.04%

2024 2025 2026 2027 2028

Net Margin

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 8.5. BASIC ASSUMPTIONS

January
Financial Year Start

Jan-24
Start Month (Operations)

Jan-24
Start Month

3.5%
Inflation

Base
Scenario

12.0%
VAT

10.0%
Sensitivity

5.0%
Tax Rate

4.0%
Interest Rate

10.0%
Depreciation Rate

10.0%
Amortization Rate

30 Days
Debtor Turnover

30 Days
Creditor Turnover

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 8.6. COMPANY VALUATION

2024 2025 2026 2027 2028

Free Cashflows 1,824,569 14,835,062 29,689,257 41,234,866 48,740,178

Present Value of Free

Cashflows 1,386,208 9,824,065 17,137,014 20,745,999 21,374,248

Terminal Value 449,275,908

PV of Terminal Value 226,038,752

Sum of Cashflows (1-5) 70,467,533

Terminal Value 226,038,752

Enterprise Value $ 296,506,286

8.7. ENTERPRISE VALUE

2024 2025 2026 2027 2028

PV of Free Cash Flows

1,386,208 9,824,065 17,137,014 20,745,999 21,374,248

Free Cash Flows

1,824,569 14,835,062 29,689,257 41,234,866 48,740,178

Terminal Value (Perpetual)

12,888,721 104,794,573 209,724,306 291,282,255 344,299,624

Terminal Value (EV/EBITDA)

32,375,468 197,541,478 360,974,139 480,016,124 554,252,192

Terminal Value (Average)

22,632,095 151,168,026 285,349,223 385,649,189 449,275,908

PV of Terminal Value
19,726,894 114,849,167 188,963,775 222,601,578 226,038,752

Enterprise Value
21,113,101 126,059,440 217,311,061 271,694,864 296,506,286

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 8.8. INVESTOR PAYBACK PERIOD

Net Present Value

2024 2025 2026 2027 2028

Free Cashflows
(Excluding Interest) 2,824,569 16,835,062 31,689,257 42,734,866 49,740,178

Present Value of
Free Cashflows 2,145,953 11,148,504 18,291,439 21,500,676 21,812,782

Initial Investment (60,000,000)

Net Present Value 14,899,354

Internal Rate of Return

2024 2025 2026 2027 2028

Free Cashflows 1,824,569 14,835,062 29,689,257 41,234,866 48,740,178

Present Value of
Free Cashflows 1,386,208 9,824,065 17,137,014 20,745,999 21,374,248

Initial Investment (60,000,000)

Internal Rate of
Return 30.91%

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 Investors Payback Period
2024 2025 2026 2027 2028

Free Cashflows
1,824,569 14,835,062 29,689,257 41,234,866 48,740,178

Initial Investment
(60,000,000)

Cumulative
Cashflows (58,175,431) (43,340,369) (13,651,112) 27,583,755 76,323,933

Payback Period
3.54 Years

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 8.9. SENSITIVITY ANALYSIS

Optimistic Scenario

2024 2025 2026 2027 2028

Revenue 111,392,050 229,300,775 317,733,075 388,615,425 471,731,975

Cost of Sales (12,959,646) (25,351,921) (33,746,922) (39,462,406) (45,848,445)

Gross Profit 98,432,404 203,948,854 283,986,153 349,153,019 425,883,530

Operating Expenditures (93,259,432) (180,058,060) (242,053,168) (294,116,687) (362,356,742)

Earnings before interest,

tax, depreciation, and
amortization 5,172,972 23,890,794 41,932,985 55,036,331 63,526,789

Depreciation &
Amortization Expense (4,133,333) (3,733,333) (5,373,333) (4,849,333) (4,377,733)

Earnings before interest

and tax 1,039,639 20,157,461 36,559,652 50,186,998 59,149,055

Interest Expense (1,000,000) (2,000,000) (2,000,000) (1,500,000) (1,000,000)

Profit before tax 39,639 18,157,461 34,559,652 48,686,998 58,149,055

Tax Expense (1,982) (907,873) (1,727,983) (2,434,350) (2,907,453)

Profit after tax 37,657 17,249,588 32,831,669 46,252,648 55,241,603

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 Pessimistic Scenario

2024 2025 2026 2027 2028

Revenue 91,138,950 187,609,725 259,963,425 317,958,075 385,962,525

Cost of Sales (12,959,646) (25,351,921) (33,746,922) (39,462,406) (45,848,445)

Gross Profit 78,179,304 162,257,804 226,216,503 278,495,669 340,114,080

Operating Expenditures (76,935,434) (148,081,024) (198,841,470) (241,476,962) (297,343,499)

Earnings before interest,

tax, depreciation, and
amortization 1,243,871 14,176,780 27,375,033 37,018,707 42,770,582

Depreciation &
Amortization Expense (4,133,333) (3,733,333) (5,373,333) (4,849,333) (4,377,733)

Earnings before interest

and tax (2,889,463) 10,443,446 22,001,700 32,169,374 38,392,848

Interest Expense (1,000,000) (2,000,000) (2,000,000) (1,500,000) (1,000,000)

Profit before tax (3,889,463) 8,443,446 20,001,700 30,669,374 37,392,848

Tax Expense - (422,172) (1,000,085) (1,533,469) (1,869,642)

Profit after tax (3,889,463) 8,021,274 19,001,615 29,135,905 35,523,206

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9. ASSUMPTIONS & LIMITING CONDITIONS

This report is subject to the following assumptions and limiting conditions:

I. Information, estimates, and opinions contained in this report are obtained from sources
considered to be reliable. However, we assume no liability for such sources;

II. Kyrgyz Airways and its representatives warranted to us that the information they have
provided is complete and accurate to the best of their knowledge and that the
financial statements’ information reflects the company's results of operations and
financial condition in accordance with generally accepted accounting principles
unless otherwise stated. Information provided by the management has been accepted
as correct without further verification, and we express no opinion on that information;

III. We have not conducted a site review of the subject business premises, nor have we
audited or otherwise reviewed the business financial statements, which have been
provided by the business management;

IV. Possession of this report, or a copy thereof, does not carry with it the right of publication
of all or part of it, nor may it be used for any purpose by anyone without the previous
written consent of Kyrgyz Airways and, in any event, only with proper attribution;

V. We are not required to give testimony in court, or be in attendance during any hearings
or depositions, with reference to the company being analyzed;

VI. Various estimates of value presented in this report apply to this study only and may not
be used out of the context presented herein. This study is valid only for the purpose or
purposes specified herein;

VII. The study contemplates facts and conditions existing as of the reporting date. Events
and conditions occurring after that date have not been considered, and we have no
obligation to update our report for such events and conditions;

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VIII. Information and calculations are based upon the marketing data and other information
as provided to us by the management of Kyrgyz Airways;

IX. To the best of our knowledge, the projections drawn, and facts narrated herein are true
and correct;

X. The Projected Financial Statements for the next five years have been prepared in
consultation by Kyrgyz Airways. The same projected financial statements have been
used for appraising the venture. Detailed underlying assumptions used in the
preparation of the projected financial statements have not been validated and
analyzed by us in detail since the said scope has not been assigned to us;

XI. We have conducted the appraisal based on non-advocacy and have no present or
contemplated interest in the business appraised;

XII. Our compensation is not contingent on any action or event resulting from the analysis,
opinions, or conclusions in, or the use of, this Report;

XIII. The appraiser's analysis, opinions, and conclusions, as well as the development of this
report, have been in reasonable accordance and conformity with the generally
accepted management consultancy standards.

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 About Kyrgyz Airways
Kyrgyz Airways is putting the “Nomad in the Sky” by positioning as the first true
Internationally managed National Airline of Kyrgyzstan who will provide safe,
economical, and reliable air transport for inbound and outbound traffic and
showcase Kyrgyzstan as a preferred destination and offer strong competition
to all the one stop International Airlines who operate currently.

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 Date: March 12, 2023

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