ABABIL AIRLINE

L OW F A R E S . S U P E R I O R S E RV I C E .
MANAGEMENT TEAM

• Chief Executive Officer (CEO) Hassan Ahmad Khan

• Chief Financial Officer (CFO) RabNawaz Khan
• Chief Operating Officer (COO) Husnain Asif
• Chief Marketing Officer (CMO) Farman Naseer Khan
• Human Resource Manager RabNawaz Khan
ROLES AND RESPONSIBILITIES

• CEO is the top most level, and he is going to look over all the aspects of the business. The
CFO, CMO, COO will directly report to the CEO and they all will work as a team like board
of directors.

• HR will be responsible for recruit, support and develop talent through developing policies and
managing procedures. Will be responsible for administrative tasks and will contribute to
making the company a better place to work.
ROLES AND RESPONSIBILITIES

• CFO will take care of the financial side the managers under him will manage the financial data
and information and any kind of barriers in work will be monitored by the CFO.

• CMO will delegate works to the marketing managers and they will be conducting the marketing
campaigns. Marketing assistant are there to flow the commands by the upper level regularly, all the
outdoor works will be followed by them.

• COO will take care of all the operations going and the operational manager maintain the
designers and artists work who will be involved in creating new designs and conduct the paint
service. All services will be observed by this COO‟s department.
MISSION STATEMENT

• To offer our customers the most cost-effective air transportation service

ensuring the best quality, every day.
VISION STATEMENT

• To be the best low-cost airline in the country- in the eyes of our customers,
shareholders, communities and serve people who are currently underserved
with poor connectivity and high fares.
OBJECTIVES

• Our objectives is to provide safe efficient and friendly environment

to our customers so they can enjoy their tour freely with airline.
EXECUTIVE SUMMARY

• Ababil airline is a new low-cost consumer airline in its formative stages. It aims to locate in
Islamabad airport, with its head office based in Islamabad. This report has been prepared to
illustrate a carefully detailed Business Plan for starting our company. The major highlights of
this report includes a Company Overview, which includes the Mission and Vision Statement of
our company as well as Key services and strategies, Industry Analysis and Market Overview of
our company,Value Chain Analysis and Operation Plan, Marketing Plan and HR Strategy and
lastly, a Financial Plan, showing the projected profit and loss for 5 years, as well as a Balance
Sheet, showing the amount of capital required, which is 2,000,000,000.
ROUTES

• Ababil Airline looks forward to start its operations by providing low cost passenger
transportations in the following routes:
• Islamabad to Gilgit and Gilgit to Islamabad
• Islamabad to Chitral and Chitral to Islamabad
• Islamabad to Skardu and Skardu to Islamabad
GROUND HANDLING SERVICES

• Gerry’s-danata is providing us ground handling services.

The reason behind is that it is the starting of airline and we are not investing as much.
Because the cost of opening own handling agency is much more then taking and paying for the
services.
GROUND HANDLING CONTRACT

Yearly contract including

• Catering
• Acft Cleaning
• Fueling
• Ground power
• Ramp Services
• Other Airport Services
HOW TO SUCCEED

• Provision of low cost but high-quality service on domestic routes.

• High Aircraft Utilization
• Low Fare, No Frills.
• Employment of cost-effective, up-to-date regional aircraft.
• Utilization of the latest electronic and informational technologies in sales and marketing.
• Ensuring a low cost, friendly, cooperative, enjoyable, yet highly professional face to the
customer.
VALUES
• Commitment to Safety
• Honesty,Trust and Integrity
• Technical excellence and continuous learning
• Compliance with Regulatory Standards
• Acting with purpose and urgency
• Respectful Communication and Constructive Disagreement
• Hard work
• Fun
• Profit
COMPANY GUIDELINES FOR
EMPLOYEES
• Employees should be courteous, well behaved, respectful to all stakeholders of the company,
esp. the passengers
• Employees must not disclose any confidential information about the company to any external
sources including the press, employees of other companies or family members
• Employees should not discriminate between persons based on reasons of race, creed, sex,
social status, religion, nationality, age or physical or mental disability
• Employees must comply with all applicable laws and regulations of Pakistan, and perform their
tasks with ethics and responsibility
• All assets, funds, inflows and outflows must be recorded in the books
• Bribes or illegal payments of any sort are strictly prohibited
CORPORATE SOCIAL RESPONSIBILITY

• Ababil Airline have a longstanding commitment of addressing the needs of the society, in view
of its belief that for any economic development to be meaningful, the benefits from business
must trickle down to the society at large. Ababil Airline thinks that the corporate goals must
be aligned with the larger societal goals. The following are some of the societal responsibilities
that the company looks forward to undertake:
• Education
• Community
• Health
• Environment
KEY PRODUCTS & SERVICES

• In order minimize costs and hence ticket fares, the products and services offered will be kept
• simple. “
• No-frills
• ” policy will be adapted.
• Flight services -
• Ababil Airline aims to provide flight facility to three destinations in Pakistan as follows:
• Islamabad to Gilgit and Gilgit to Islamabad
• Islamabad to Chitral and Chitral to Islamabad
• Islamabad to Skardu and Skardu to Islamabad
CONT.

• Online reservations
• (e-reservations) and sales (e-sales) that will provide quick and easy access to airline schedules,
flight availability, reservations, and ticketing to a wide range of customers. This eliminates
payment of agency commissions and shall keep overall costs low - savings that can be passed
on to the customer.
• Baggage handling services
• will be provided to all customers in all the airports.
CONT.

• Electronic ticketing (e-ticketing)

• which will enable passengers to obtain their tickets online and avoid the need to obtain paper
tickets from airline offices, travel agencies, or at the airport. It also frees the airline from having to
stock, track, and issue tickets and maintaining paper trails of them. Again, more savings for both the
airline and the customer.
• Electronic check-in (e-check-in)
• that will virtually eliminate waiting in line to check-in fore-ticketed passengers, enabling them to
confirm their identities, obtain their boarding passes, and check-in their baggage (and even purchase
tickets upon check-in) utilizing a user-friendly kiosk that eliminates those last-minute frustrating
waits to get to the counter. And it also greatly reduces the airline's needs to staff check-in desks,
control long lines, employ local contract ground staff, and expend money and resources on an
antiquated system that only adds to the traveler's inconvenience and frustration. Another win-win
situation for both airline and passenger.
INDUSTRY AND
MARKET
ANALYSIS
PEST ANALYSIS

Political Factors:
• Tax Policy
– The Company will not fraud with any type of government legislation system. The rules given by FBR
(Federal Board of Revenue) will be followed in terms of Tax related issues. Tax payment will be made
as per governmental taxation system and time period.
• Environmental Regulation
– The Company will try to maintain a living friendly environment.
• Political Stability:
– Although there are some political instability in Pakistan, the company will adopt some policies
against these political instabilities.
POLITICAL FACTOR

• Route Charge
– Increase of route charge by the government
• Trade Union
– Increase in trade union pressure
• Government policies
– Change in government policies and regulations which will definitely affect Aviation Industry
• Tourism
– Increase in tourism will work in favor for Ababil Airline- as it is a low-cost carrier
ECONOMIC FACTORS

• Interest Rates:
– The interest rate in Pakistan have increased in 2019 of 0.25 points, which increases the interest rate
from 10% to 10.25% interest rate.
• Price Ceiling
– High price ceiling of petroleum products & fuels increase costs of production.
• Unemployment Rates
– Unemployment rate increased to 5.90% as it was 4.0% in 2018.
• Exchange rates
– Depreciation of Pakistani Rupees.
• Fuel Costs
– Energy and fuel costs are cause of uncertainty
SOCIAL FACTORS

• Health Consciousness
– The Company will adopt stringent health consciousness policies. It will ensure medical facilities for its
employees and customers.
• Population Growth Rate
– Pakistan has a population growth rate of 5.20% per annum. So, the company will have the opportunity to
bring new exciting services at low cost for the increased population.
• Life style
– Increase in travelling life style
• Prosperity
– As the economy is increasing at this moment prospects are now more interested to fly for vacation which
will help our Airline Industry.
• Demographic prospects
– Low-Cost Airline will help to attract a wide range of demographic of prospects.
TECHNOLOGICAL FACTORS
• Research and Development Activity
– The Company will implement airport technology research and development program. In this
program the role of airports will be to accommodate the increased traffic safely. The Environment
and Energy Research &Development program of Ababil Airlines will try to reduce significant
community noise and air quality emissions impacts in absolute terms, reduce the impact of aviation
green house gas emissions on global climate (including the rate of fuel burn), improve energy
efficiency(including air traffic operations and alternative fuels development), proactively address
other environmental issues.
• Fuel efficiency
– High fuel efficiency, less noise pollution and lessening of carbon emission by the supplier Boeing
Technological expansion. Internet competition being raised Web sales/services. Low fuel
consumption cars. Online check-in, self service checks at Airports for Ababil Airline passengers
which might be too technical but in tune with our prospects which may make them unhappy. By
using proper technology a company can reduce its costs effectively and also can maintain good
relationship with customers.
PORTER`S FIVE FORCES
BARGAINING POWER OF SUPPLIERS

• Aircraft Suppliers: Number of suppliers for Aircraft parts was increased so there is a fierce
rivalry in supplier industry.
• Fuel Suppliers: Fuel costs depends on supply and its supply subject to fluctuations.
BARGAINING POWER OF BUYERS

• New consumers from different divisions of the country are interested in flying from one
destination to other due to low prices of Airlines. Distribution power of travel agents is
decreasing as prospects used to book tickets from internet or through direct booking. So it is
a threat for travel agents, so they used to offer complete travel solutions to customers.
• Power of buyers is moderate in Pakistan. The cost involved with switching airplanes is
decreasing as customers can access internet easily to compare and buy air tickets online. More
customers including travel agents and individuals prefer to take the budget airlines rather than
full-service airlines.
THREAT OF SUBSTITUTE PRODUCTS

• Availability of Substitutes is quite high for domestic airlines, including bus services, train,
personal cars, etc. These forms of transport may be more convenient and safer than Airways.
THREAT OF NEW ENTRANTS

• Threat of New Entrants is low. The airline industry is so saturated that there is hardly space
fora newcomer even to squeeze its way in. The main concern for this is the cost of entry. The
airline industry is one of the most expensive industries, due to the cost of buying and leasing
aircrafts, safety and security measures, customer service and manpower. Another major barrier
to entry is the brand name of existing airlines and it is really difficult to lure customers out
of their existing brands.
INTENSITY OF COMPETITIVE RIVALRY

• There are more service providers than needed in the local market. The various airlines are
competing for the same customers. The airlines are continually competing against each other in
terms of prices, technology, in-flight entertainment, customer services etc. Highly competitive
industries generally earn low returns because the cost of competition.
COMPETITIVE ADVANTAGES
• With the Low-Cost Carrier Ababil Airline have the following competitive advantages over the
competitors in the airline industry, which can be summarized in the following diagram.
SWOT ANALYSIS

• To figure out the internal factors such as strengths and weaknesses, and external opportunities
and threats to business objectives, a SWOT Analysis of Ababil Airline is conducted and shown
next;
SWOT

• Strengths
• Low cost operations.
• Fewer management level, effective, focused and aggressive management.
• Simple proven business model that consistently delivers that lowest fares.
• Penetrate and stimulate to potential markets.
• Multi-skilled staffs means efficient and incentive workforce.
• Single type fleet minimize maintenance fee and easy for pilot dispatch
SWOT

• Weaknesses
• Service resource is limited by lower costs.
• Limited human resources could not handle irregular situation.
• Government interference and regulation on airport deals and passenger compensation
• Opportunities
• Huge market share.
• Adding customer services or operation as full-service airline with low fares.
• New routes and airport deals.
• Unprofitable competitors.
SWOT

• Threats
• Full-service airlines start cut costs to compete.
• Entrance of other low-cost airlines.
• High fuel price decreases yield.
• Accident.
• Aviation regulation and government policy.
• Increase in operation cost.
UNIQUE VALUE
PROPOSITION
CORE COMPETENCIES

• Low cost.
• Effective, focused and aggressive management.
• Multi-skilled staffs.
• Online booking.
• Point to point routing.
• Operation of On-Time delivery.
• No Frills Strategy.
• Route policy strategy
YIELD MANAGEMENT SYSTEM (YMS)

• Anticipates and reacts to the behavior of customers to maximize the revenue taking into
account the operating cost and shall aid Ababil Airline to optimize prices and allocate capacity
to maximize the expected revenues by 2 levels:
• a) Seat: Seats are available at various prices in different points of time. A reservation done at a
later date will be charged more than the one done earlier for the same seat.
• b) Route: By adjusting prices for routes / destinations that have a higher demand when
compared to others.
• Results increased revenue (3-4%) by taking advantage of the forecast of the high / low demand
patterns, lower prices as YMS has aided Ababil Airline to increase the revenue by offering
higher discounts, more frequently during off-peak times while raising prices only marginally for
peak times.
COMPUTER RESERVATION SYSTEM
(CRS)
• An integrated web-enabled reservation and inventory system suite that includes Internet, call
center, and airport departure control functionality.
• Satisfy the unique needs of Ababil Airline implementing a low-cost business model to transform
the business process to efficiently streamline operations.
ENTERPRISE RESOURCE PLANNING
SYSTEM (ERP)
• An integrated ERP solution powered by Microsoft Business Solutions (MBS) on Microsoft
technology platform which is implemented by Avanade consultants in May 2005.
• With the robust ERP technology platform, Ababil Airline is able to successfully maintain
process integrity, reduce financial month-end closing processing time, speeds up reporting and
data retrieval process.
MARKET
ORERVIEW
MARKET

• In Pakistan, the market power of airline companies for local or regional traveling is not too
high. It is well known that Pakistan is a developing country in which per capita income is very
low. So the potential customer base is not very strong.
TARGET MARKET

• We divide the market share of the company based on two issues;

• Income
– Mainly people whose monthly income is RS 80,000 Thousand minimum use airline for local
traveling.
• Profession
– This is a market segmentation based on profession. In Pakistan, the business people and the service
holders mainly travel by airlines, which includes many foreigners. For domestic traveling.
MARKETING PLAN

• Ababil Airline targets the travelers who look for low cost flights.The company promises low-
cost but the best service for domestic traveling. Ababil airline will target leisure travelers.
• Sales and marketing:
• The company targets customers from various income brackets. To make tickets easily available
Ababil Airline sells it online. The marketing will be in commercial T.V. channels, radio, business
magazines etc. To advertise Ababil Airline the company targeted some magazines which are
very popular to the business people and also by the service holders.
MARKETING PLAN
• Distribution:
• Initially we will start the business with three routes and we will take fewer passengers because
we are new in this business. To keep things simple, our tickets will be available for online
purchases only. No travel agencies will be used to avoid commission expenses. There will be no
ticket counters in any airports as a part of the low-cost strategy.
• Advertising / Product promotion :
• Initially, we would distribute 20,000 leaflets in major city centers in Islamabad. After that we
would not engage in any direct promotional campaign throughout the next year. This decision
is taken with regard to the fact that the company and its service, although has an identified
market, will start off in a small scale. Then, after break-even and profit making, the company will
think of going larger-scale. So, initially due to the small size of the business, we would not go for
more promotional campaigns for feasibility purposes.
MARKETING PLAN

• Customer Service :
• We will have special arrangements for the customers who will travel in our airlines. We will
provide paid foods inside the aircraft and we will also provide the foods for free to our card
holders. As our business is low cost, so the lowest possible plane fare would be the main
service for the customers.
MARKETING PLAN

• Pricing:
• The company will also follow a tier system for pricing. We shall adopt a simplistic fare
structure based on time value relationship for seats. The earlier the customer books, the
cheaper will be the fare will be. There are 12 fare buckets, each bucket is priced according to
our specification.The first few tiers are targeted to value conscious passengers, but they can
only get their hands to extremely cheap tickets if they book way ahead of time. The mid tier
buckets target the captive market. Ones the revenue collected is sufficient to cover all the
operational costs to the flight, the system will then move to the top tier bucket. This is when
prices will start to creep up and our profit grows.
ORGANOGRAM
DESTINATIONS

• Ababil Airline will operate on following Destination

• Gilgit
• Chitral
• Skardu
• We don’t choose these destinations according to airline service we chose these destinations
according to customer demand.
GILGIT

• Why we chose Gilgit as many as

• 1.72 million have visited Gilgit-Baltistan during last 11 months this year
• As compared to 0.5 million tourists who visited last year.
• The tourists' visits brought Rs 300 million revenue to the local economy during the last couple
of years.
• The provincial government is expecting 2.5 million visitors in 2019.
SKARDU

• Skardu is the main town of Baltistan along the wide bank of the river Indus.
• Skardu is the largest district of the Gilgit Baltistan.
• It is equally popular with high altitude trekkers, who treks to Baltoro Glacier, K2 Base Camp
and Concordia.
• Coming to the point is, Skardu by road, lies approximately 5 hours away from Gilgit and 12
hours drive from Besham. A daily flight to and from Islamabad is also in operation.
CHITRAL

• Chitral located in the North west of Pakistan is a beautiful valley in the Hindukush range of
Mountains.
• There is the Chitral fort and Palace of Mehtar (Mir Or King)
• In front of the Fort is the Jamia Mosque of Chitral an impressive architecture with beautiful
inlays and decorations.
• People use to get to Chitral from Peshawar or Swat via Dir thru the Lowari tunnel.
• It takes almost overnight at PHANDAR Motel and Phandar guest house and later continue to
Chitral next day.
• That’s why we are here to save time of our customers.
AIRCRAFT

• Embrar EMB 110

• Price
• 953,580,000 PKR
COSTS

• Total capital: 2,000,000,000

• Start up cost:
– TPRI license cost: 10,535,000
– 25% advance to pay for 2 aircrafts: 476,790,000
– Others expenses : 5000,000
– Per month aircraft lease for three years: 39,732,500
ROUTE FARES

• Islamabad to Gilgit : 12000 pkr

• Islamabad to Chitral : 15000 pkr
• Islamabad to Skardu : 16000 pkr
REVENUE

• 2 flights per day on every route.

• Islamabad to Gilgit 1-month revenue: 12,096,000
• Islamabad to Chitral 1-month revenue: 15,120,000
• Islamabad to Skardu 1-month revenue: 16,128,000
• Total revenue 1-month: 43,344,000
COST

• Lease: 39,732,500 pkr

• Office rent: 250000 pkr
• Terminal Navigation Charges: 150 pkr
• Parking charges: 70,422 pkr
• Passenger service charges: 520 pkr
• Salaries: 500000 pkr
• Total expense: 40,553,592 pkr
INCOME STATEMENT
2019 2020 2021
Revenue 43,344,000 pkr 53,764,000 pkr 64,385,000 pkr

Cost
Lease 39,732,500 pkr 39,732,500 pkr 39,732,500 pkr

Office Rent 250000 pkr 300000 pkr 350000 pkr

150 pkr 150 pkr 150 pkr
Terminal Navigation Charges

Parking charges 70,422 pkr 70,422 pkr 70,422 pkr

520 pkr 520 pkr 520 pkr
Passenger service charges

Salaries 500000 pkr 550000 pkr 600000 pkr

Total expense 40,553,592 pkr 40,653,592 pkr 40,753,592 pkr

Profit including tax 2,790,408 pkr 13,110,408 pkr 23,631,408 pkr

Tax 20%

Profit 2,232,326 pkr 10,488,326 pkr 18,905,126 pkr

INTERNATIONAL ROUTES

• We will operate internationally after 4 years of Domestic success in Travelling and tourism in
China, Saudia, Dubai, India.
THANK
YOU!!!