Strategic Planning for Airlines Emre Serpen 15May13

Strategic Planning for Airlines

Dr Emre Serpen,

Intervistas Consulting Group

EVP

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Realizing the vision together

Intervistas team members have extensive airline strategy

and network design assignments worldwide

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Examples of Strategy and Network Design Projects

Company-wide strategy

and turnaround

Development of

network, Cairo hub, and

schedules

Improvements in sales,

marketing, organization,

IT

Fleet & Business Plan

EgyptAir

Lead Consultant:

Dr. Emre Serpen

Lead Consultant:

Dr. Emre Serpen

Lead Consultant:

Dr. Emre Serpen

Lead Consultant:

Dr. Emre Serpen

Lead Consultant:

Dr. Emre Serpen

Turkish Airlines Temasek (SQ) South African Airways

Market evaluation,

capacity assessment,

SWOT analysis

2016 and 2012 network

design, hub design, and

schedule

Business plan

associated with the

strategy

SWOT analysis of

Singapore Airlines

Market forecasting

Identify growth

opportunities

Develop strategy for

medium and long haul

network and fleet

Marker assessment

Strategy for maximizing

share in Africa

Selection of hub

locations in west and

central Africa

Network design and fleet

plan

Business plan

Malaysian Airlines

Evaluated the feasibility

of a premium service in

conjunction with another

airline

Market Forecasting

Route Design

Commercial Workshops

Joint Venture/Codeshare

Benefits

Lead Consultant:

Dr. Emre Serpen

LOT Polish Airlines

Multiple network

optimisation projects

Alliance strategy

analysis and decision for

LOT to joined Star

Alliance

Develop Asian strategy

and network for LOT

Evaluate joint venture

with Indian partner

Dr. Emre

Serpen

Executive Vice

President, Head of

Airline Practice

• 20+ years, 70+

airlines in 50+

countries


Lead Consultant:

Zach Mensen

Lead Consultant:

Dr. Emre Serpen

Czech Airlines ČSA

Examples of Strategy and Network Design Case Studies

Delta Air Lines

Hub optimisation of

Atlanta ATL and

Memphis MEM hubs

Improved network

contribution of Delta’s

domestic flying

Fleet optimisation

between mainline and

regional aircraft

Network design and

route optimisation for

ČSA

Short term

improvements for the

summer schedule by

connecting and

improving and flights

Continental Airlines

Air Canada

Lead Consultant:

Marcus Lam

Hub optimisation of

Toronto YYZ regional

USA network

Fleet optimisation using

Fleet Assigner modelling

software, to maximize

medium and short term

profitability

New route forecasts

Istanbul Airport

Lead Consultant:

Dr. Emre Serpen

Medium to Long Term

Passenger Forecast to

2040 for Istanbul’s new

Third Airport

Fleet Plan forecasts for

fast-growing Turkish

Airlines (TK)

Future IST hub route

design for TK and other

airlines

Lead Consultant:

Dr. Emre Serpen

Diagnostic assessment

Market evaluation and

forecasting

Network design,

Colombo hub design

Fleet plan

Commercial

improvements

Business plan

SriLankan Airlines

Lead Consultant:

Jim Miller

Optimisation of Frankfurt

and Munich hubs

Advised Lufthansa on

the ramifications of

deregulation of the

European market

Examined in detail the

history and competitive

implications of U.S.

deregulation

Lufthansa Airlines


Intervistas uses Industry Trusted Sources And

Professional Network Optimisation Tools

. The modelling tool uses discrete choice methodology, an advanced form of the

QSI passenger market share forecasting method.


Strategic Planning for Airlines - Overview

6 6

Strategic

Assessment

Network

Design and

Fleet

Planning

Business

Model

Alignment

Business

and

Implementa

tion

Planning

Strategic

Intent

1 2 3 4 5

Global

Continent/Region

Country

Specific

Segment

Long Term

Short Term

Hub Design

Fleet Planning

Demand

Supply

SWOT

Market

Forecasting

Commercial

Operational

Subsidiaries

Organisational

Business Plan

Implementation

Plan


Step 1: Obtain Macro Economic, Air Traffic, Competition, Governance and Operational Cost data for each country.

Step 2: Assign Score; Best in Category country is assigned a 10.0 score; scores of other countries are assigned a score relative to the Best in Category country.

Step 3: Add up all scores per the weighting of each category to calculate a final score for each country.

Analytical Framework for Multi Country Strategy

7

Weight South Africa Egypt Nigeria Ghana Botswana Ethiopia Cote d'Ivoire Mauritius Seychelles Algeria

Macro Economic 25% 5.0 4.8 6.5 4.4 4.9 4.6 4.1 4.9 5.1 3.8

GDP per Capita 35% 6.7 2.8 1.5 1.7 8.4 0.5 1.0 8.8 10.0 4.6

GDP Growth Forecast Average 35% 4.9 7.0 8.5 9.6 5.4 8.2 9.5 5.2 4.7 4.7

Population 30% 2.9 4.8 10.0 1.5 0.1 5.3 1.4 0.1 0.0 2.0

Air Traffic 25% 6.0 5.9 3.3 1.7 1.0 2.9 1.4 1.0 1.8 4.3

Intra Africa Oubound Pax (2012) 50% 10.0 1.8 3.6 0.7 0.1 0.5 0.4 0.2 0.1 0.5

# of City Pairs (<140% Circuity) 50% 2.0 10.0 3.0 2.7 2.0 5.3 2.4 1.8 3.4 8.0

Competition 17% 1.7 3.2 5.1 7.1 4.5 6.0 9.0 3.3 4.3 4.6

Seat Share of Dominate Airline 33% 3.2 2.1 4.4 10.0 2.7 2.0 7.1 3.0 2.8 2.1

Population/Outbound Seat 33% 0.6 5.0 5.4 5.4 0.9 9.2 10.0 0.3 0.1 5.2

Quality of Competition (SkyTrax Rating) 17% 2.0 4.0 10.0 10.0 10.0 4.0 10.0 10.0 10.0 10.0

Presence of Competition 17% 0.7 1.0 0.9 2.0 10.0 10.0 10.0 3.3 10.0 3.3

Governence 17% 7.1 5.1 4.1 5.5 7.1 4.9 4.5 9.4 6.4 4.1

Stability 25% 7.1 5.4 4.2 5.6 9.1 4.8 5.5 10.0 6.7 4.7

Ease of Business 25% 4.9 1.7 1.5 3.0 3.2 1.5 1.1 10.0 2.6 1.3

Corruption 25% 6.6 4.9 4.2 6.9 10.0 5.1 4.5 8.8 8.0 5.2

Infrastructure 25% 10.0 8.2 6.6 6.7 6.2 8.4 7.0 8.7 8.2 5.4

Operational Cost 17% 5.2 5.2 5.5 6.2 7.0 5.2 5.2 5.2 5.2 5.2

Fuel 25% 8.4 8.4 6.0 9.0 9.0 8.4 8.4 8.4 8.4 8.4

Maintenance 15% 7.3 7.3 10.0 6.4 8.2 7.3 7.3 7.3 7.3 7.3

Landing costs 15% 3.3 3.3 2.2 5.6 6.7 3.3 3.3 3.3 3.3 3.3

Departure costs 15% 1.7 1.7 2.0 1.7 1.7 1.7 1.7 1.7 1.7 1.7

Navigation 15% 5.8 5.8 6.7 10.0 5.0 5.8 5.8 5.8 5.8 5.8

Catering and Handing 15% 2.8 2.8 6.0 3.0 10.0 2.8 2.8 2.8 2.8 2.8

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10

Source Intervistas Analysis


Multi country strategy – additional criteria

8

Strategic Intent

1. Participate in markets

2. Ensure choice of profitable airlines

3. Strategic view of the Continent and development of an airline system for future dominance of Continent Egg 1) Gov. 2) Air Asia, 3) LAN

4. Readiness to challenge established incumbent airlines thru superior product and execution

5. Leverage previous investments existing assets

6. Pre-selection of Countries

Source Intervistas/Burlington Analysis


Continental or Multi Country Strategy -Qualification

9

0 250 500 750 1,000 1,250 4,000K

BeninMozambique

LesothoMauritius

MaliGabon

South SudanBotswana

SenegalBurkina Faso

NamibiaUganda

TanzaniaCote d'Ivoire

ZambiaDRC

Congo, RepublicGhana

CameroonEthiopia

LibyaZimbabwe

KenyaAlgeriaTunisiaSudan

MoroccoNigeriaAngola

EgyptSouth Africa

Example :Consumer Markets

Example: O/D Pax and Growth Rate Example: Flying Population



Single country strategy, selection of hub structure

10


Strategic Planning in Airlines - Overview

11 11

Strategic

Assessment

Network

Design and

Fleet

Planning

Business

Model

Alignment

Business

and

Implementa

tion

Planning

Strategic

Intent

1 2 3 4 5

Global

Continent/Region

Country

Specific

Segment

Long Term

Short Term

Hub Design

Fleet Planning

Demand &

Supply

SWOT

Market

Forecasting

Commercial

Operational

Subsidiaries

Organisational

Business Plan

Implementation

Plan


Market Analysis

EXAMPLES MARKET ANALYSIS

• Year-on-year growth of Airline ’s key markets

• Identification of markets with fast and high yield

growth opportunities

• Analysis of Airline ’s capacity growth competitors in

key markets

• Evaluation of share gap and identification of

opportunities where market growth exceeds

marketshare growth

• Evaluation of region to region growth (Airline

market share growth, total market growth,

considering circuity and yield)

• Identification of Airline market share:

market share growth in growing markets

market share loss in growing markets

market share growth in shrinking markets

market share loss in shrinking markets

• Relationships between market, market share and

pricing changes

• 100 o/d thru the hub, relative changes of share of

different airlines – given the hub advantage of the

home airline




Example Analysis of Market Sizes and Fares in Russia

Note: Average fares excludes taxes, surcharges and fees.

Source: Diio FMG, 2012



SWOT, Connectivity Analysis

• Year-on-year growth of Hub operation including connectivity

• Maximum connections and minimum connect time analysis

between Airline and its competitors at Hub, and identify

improvement opportunities

• Analysis of connecting markets identified in Market Analysis and

identify connection improvement opportunities

• Hub capacity analysis (growth in seats, ASK’s, destinations,

frequencies), and level of competition on routes (Airline versus

other carriers)

• Evaluation of Hub connectivity pattern by region and by time-of-

day, and identify improvement opportunities.

• Analyse Airline hub connectivity using network optimisation tools

and identify preliminary connecting opportunities

• Evaluation of Hub Hub Constraints (capacity, airspace, gates,

slots, etc.).

Example Analysis SWOT



Passenger, Capacity, Revenue Trends and Share

15 Source: Diio FMG



Benchmark competing hubs

2 3 4 5 6 7 8 9

10 11 12

To

tal S

eat

Cap

acit

y (

Mil

lio

ns)

Quarter

Total Capacity at Major Hubs over time

CDG FRA MUC DXB

58.4%

43.4% 43.4% 44.0% 32.0%

36.4%

46.2% 46.1%

20.9%

22.0%

5.2% 10.3% 10.5%

34.1%

36.0%

1.1%

10.0%

TK - IST AF - CDG LH- FRA EK - DXB SQ - SIN

Nonstop Competition from Comparative Hubs

No Competition 1 Competitor 2-4 Competitors 3+ Competitors

0

20

40

60

80

100

120

140

160

0

5

10

15

20

25

30

35

40

45

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

To

tal S

eat C

ap

acity

AF

*/LH

*

(Millio

ns)

To

tal S

eat

Cap

acit

y E

K/S

Q/T

K

(Millio

ns)

EK SQ AF* LH*

Total Seats Capacity

EK - DXB SQ - SIN

Region Countries Destinatio

ns Frequencie

s Countries Destinatio

ns Frequencie

s

Africa 16 18 159 2 3 14

Domestic 0 0 0 0 0 0

Europe 13 24 288 11 14 100

Far East 9 12 168 11 18 344

Latin America 1 1 7 0 0 0

Middle East 10 13 200 3 5 32

North America 2 5 38 1 5 45

Oceania 2 6 98 2 7 113

South Asia 5 17 275 4 9 69

TOTAL 58 96 1,233 34 61 717

Source TroyAvi Analysis


Market forecasting

Top down = GDP/capita X Elasticity

Bottom Up = MIDT/PAXIS/DIIO

Analyse forecast results to identify specific market forecast insights:

1. Sort by market size

2. Sort market growth rate

3. Sort by yield

4. Sort by circuitry

5. Sort by Size x growth rate x yield x circuitry

6. Destinations Airline is not flying

Under represented markets identified in the

market forecast will be used in scenario

formulation

Market Forecasting

Example Analysis

Source Airbus



18 18

Strategic

Assessment

Network

Design and

Fleet

Planning

Business

Model

Alignment

Business

and

Implementa

tion

Planning

Strategic

Intent

1 2 3 4 5

Global

Continent/Region

Country

Specific

Segment

Long Term

Short Term

Hub Design

Fleet Planning

Demand

Supply

SWOT

Market

Forecasting

Commercial

Operational

Subsidiaries

Organisational

Business Plan

Implementation

Plan


Long Term Network Design

19

Calibration

Scenario Development

Unconstrained long term view

Maximise commercial opportunity

Market Forecast, Average Fares, Costs, Schedules

Overbuilt Analysis

Test different scenarios

Network Optimisation

Network that maximises Route Level Variable contribution

Evaluate frequency changes

New service opportunities.

Schedule options

Connecting traffic opportunities at Hub.

Example Analysis

Overview of Network Design

DME SVO

Realizing the vision together Source: OAG, July 10-16, 2000

Connectivity evolution Hub connectivity and optimisation

• Execute Airline hub optimisation, adjusting number,

timing, and directionality of flights

• Add frequency and capacity according to demand and

profitability without slot constraints. This unconstrained

scenario will define maximum benefit opportunity.

• Determine changes in connectivity, passenger numbers

and yield for long haul pillar flights, medium haul flights,

regional flights, short haul domestic flights.

• Improve Airline ’s market share in fast growing, high

yield markets with good Hub circuitry.

• Improve meaningful connections offered at Hub.

• Improve competitiveness compared with other regional

airlines and gateways.

• Improvements in overall connect time and passenger

share on key markets.

• Improvements of revenue and variable contribution

through improved hub design.

Once the runs of each qualified scenario are finished, a

quantitative comparative evaluation is be undertaken

where the relative strengths and weaknesses of scenarios

will be discussed

Example Analysis

Intervistas Analysis


Hub design and optimisation (continued)

Overbuild – maximise margins

Lang haul flights optimisation

Medium to short haul flights optimisation

Within bank flight optimisation

Maximising connection of high yield markets

Optimise hub connectivity

Stagelength (Hrs)

14

12

10

8

6

4

2

Time at Base (IST) 0600 0630 0700 0730 0800 0830 0900 0930 1000 1030 1100 1130 1200 1230 1300 1330 1400 1430 1500 1530 1600 1630 1700 1730 1800 1830 1900 1930 2000 2030 2100

BUD

LHR

BUD

DEL

LHR

BUD

Example Analysis



Evaluation of optimised schedule effectiveness Improvements in Hub Performance



Comparison of improvements across interim

schedules Long Term Network Optimisation

From passenger revenues, route profitability is also calculated . This includes route revenues

and costs – the basis of network and hub optimisation



Objective is an optimised short term hub design,

including improvements in connecting markets and

incremental financial performance compared with the

current schedule.

A list of potential new destinations and frequencies

identified for immediate implementation

Evaluate current near-term operational constraints at

Hub (airspace, aircraft movements during peak hours,

bilaterals, slots, curfews, gate space restrictions) which

may prevent increase of frequency/capacity of flights or

the introduction of new flights.

Analyse Airline ’s capability in consistently delivering aircraft turn times (critical for optimal hub performance).

Focus on time of day changes to maximise number of meaningful connections between markets as these could be implemented without much operational impact

Sort flights according to contribution and take action for improvements in system wide variable contribution

Short term Network Optimisation

Example: Constraints with Impact on Profitable Network

Growth

Example: Evaluation of Flights According to Route

Profitability and Revenue Performance

Example Analysis

Realizing the vision together 25

Standard Hub Carrier #1 Hub Carrier #2

Airport HC1 HC2 D-D D-I I-D I-I D-D D-I I-D I-I D-D D-I I-D I-I

AMS KL 25 50 50 50 50 50 50 50

AUH EY 60 60 60 60 60 60 40 60

BKK TG 30 120 120 75 30 90 90 45

CAI MS 30 90 90 90 60 60 60 60

DOH QR 20 60 60 60 20 60 60 30

DTW DL 45 60 90 60 30 40 75 75

DXB EK 20 60 60 75 20 60 60 45

FRA LH 45 45 45 45 45 45 45 45

HKG CX n/a n/a n/a 60 n/a n/a n/a 50

IAH CO 45 60 60 75 30 30 50 50

ICN KE OZ 40 100 100 70 40 70 100 45 40 70 90 45

IST TK 30 90 75 60 45 75 75 60

KUL 60 60 60 60

MSP DL 40 40 60 60 30 40 75 75

MUC LH 45 45 45 45 30 30 30 30

NRT JL NH 30 100 100 60 20 100 90 60 20 100 100 60

PHL US 40 90 90 90 30 50 90 90

SAW TK 20 60 60 60 30 45 45 45

SEA AS 70 70 90 90 40 40 80 80

SIN SQ n/a n/a n/a 60 n/a n/a n/a 50

Constraints limiting network growth Example Evaluation Of Airport Constraints Is Important In

Development Of Practical And Implementable Network Design

Example: ATM’s

Example: Connect Times


.

• Develop optimal fleet plan supporting the long term network plan

• Provide recommendations for redeployment of fleet plan

• Review current Airline fleet including age, maintenance requirements/costs, onboard product, range, fuel burn and fleet commonality.

• Review current fleet orders and compare it against the optimised long term network requirements maximizing route profitability and fleet utilization.

• Apply fleet plan to proposed passenger forecast and schedule to assess the optimal types/mix of aircraft that will most efficiently operate the route network.

• Assess how the fleet plan will evolve over the forecast period taking retirements and new deliveries into consideration.

• Ensure that fleet utilization is optimised

• Develop optimal narrow body and wide body fleet ratios in the near term, considering optimal requirements for the Hub

• Buy versus lease calculations

Fleet Planning

Example: Fleet Operating Costs Analysis

Example: Fleet Optimisation Analysis

Example Analysis

Intervistas Analysis


Example Aircraft Financing Evaluations

Source DVB bank, AISI


Example Aircraft Buy Versus Lease Calculations




29 29

Strategic

Assessment

Network

Design and

Fleet

Planning

Business

Model

Alignment

Business

and

Implementa

tion

Planning

Strategic

Intent

1 2 3 4 5

Global

Continent/Region

Country

Specific

Segment

Long Term

Short Term

Hub Design

Fleet Planning

Demand

Supply

SWOT

Market

Forecasting

Commercial

Operational

Subsidiaries

Organisational

Business Plan

Implementation

Plan


Business Model Alignment - Commercial Processes

Alignment of commercial processes with the

new business model and route strategy. These

will include changes in pricing, distribution and

product strategy supporting the business

model changes and route strategy

30

Distribution benchmarking, segments, unit

revenue, unit cost per channel

Changes in Distribution mix with focus on direct

channels without losing high yield GDS channels

Development of the distribution strategy Meetings

with Airline key customers, (travel Agency,

Corporate) and establish improvement priorities

Alignment of commercial organisation

Alignment of performance measures. And key

performance measures for the leadership of Airline

Airlines

These will drive further improvement projects

Example Analysis



2.2 Business Model Alignment- Operations and Support Processes

• Alignment of the operational activities support business

model changes – Review cost structure, assess changes

to the operational costs, productivity improvements

• Determine improvements in performance targets to

support the business model changes

• Determine target CASK to support business model

• Review current cost structure, direct and indirect

• Direct costs include

- Fuel, MRO, Ground Handling, Catering,

• Determine initiatives for productivity improvement and unit

cost reduction to meet target CASK

• Alignment of the operational activities support business

model changes- Crew and integrated operations control

improvements

• Alignment of MRO activities

• Alignment of organisation and performance measures

• Projects and initiatives for reduction of operational costs

and improvements in productivity This will include major

cost items such as Fleet (Utilisation), maintenance, crew,

ground handling costs, overheads and other areas

31

Example Analysis



32 32

Strategic

Assessment

Network

Design and

Fleet

Planning

Business

Model

Alignment

Business

and

Implementa

tion

Planning

Strategic

Intent

1 2 3 4 5

Global

Continent/Region

Country

Specific

Segment

Long Term

Short Term

Hub Design

Fleet Planning

Demand

Supply

SWOT

Market

Forecasting

Commercial

Operational

Subsidiaries

Organisational

Business Plan

Implementation

Plan


Business Plan Development

Business plan is driven by the new network, fleet, and

alignment of commercial and operational functions

including revenue and cost forecast ..

Based on the revenue and cost forecast conducted

above, create a five-year operating profitability and

profit margin forecast of the airline is developed.

This will include estimate of capital expenditure and

working capital for the start up period

Sensitivity analysis is executed for the most important

drivers in the model, such as fleet size, load factor,

yields, price of fuel, etc

Identify key revenue and cost drivers and develop risk

scenarios that test the assumptions upon which they

are based to understand the extent to which the

business is sensitive to these assumptions.

To deliver the business model changes, an overall

migration plan will be developed. This will be

complemented with specific improvement initiatives and

projects.

2007 2008 2009 2010 2011 2012 2013

Revenues

Passenger Revenues 91,659 96,538 94,629 90,486 90,486 90,486 90,486

Other Revenues 11,190 20,224 16,599 18,274 18,274 18,274 18,274

Total Revenues 102,849 116,762 111,227 108,759 108,759 108,759 108,759

Operating Expenditure

Total Variable Costs 68,610 85,694 71,147 65,191 65,015 65,015 65,015

Total Fixed Direct Operating Costs 28,324 30,018 30,102 30,187 30,187 30,187 30,187

Indirect Operating Costs

Other Staff Salary Costs 3,041 2,953 3,349 3,481 3,481 3,481 3,481

Other Indirect Costs 5,511 3,961 3,961 3,961 3,961 3,961 3,961

Total Indirect Operating Costs 8,552 6,914 7,309 7,442 7,442 7,442 7,442

Total Operating Expenditure 105,485 122,626 108,559 102,820 102,643 102,643 102,643

EBITDA -2,636 -5,865 2,668 5,940 6,116 6,116 6,116

EBITDA Margin -3% -5% 2% 5% 6% 6% 6%

Change versus Baseline

EBITDA 0 0 762 4,002 3,975 3,975 3,975

EBITDA Margin 0% 0% 1% 4% 4% 4% 4%

Example Development of Business Plan

New Forecast Operating

Results

Expense Forecast

Projected Financial

Results

Cash Flow from

Operations

Current Debt & Capital Structure

Modify for Fleet

Changes &

Restructuring

Debt Service

Requirements

Cash

Requirements

Cash Plan

Debt Restructuring

Opportunities

Debt

Equity

Potential Sources of

Capital

Capital

Spending

Technique

Options

Evaluation

Through

Modeling


Results


Results

Expense ForecastExpense Forecast

Projected Financial

Results

Projected Financial

Results

Cash Flow from

Operations

Cash Flow from

Operations

Current Debt & Capital StructureCurrent Debt & Capital Structure

Modify for Fleet

Changes &

Restructuring

Debt Service

Requirements

Debt Service

Requirements

Cash

Requirements

Cash

Requirements

Cash PlanCash Plan

Debt Restructuring

Opportunities

Debt Restructuring

Opportunities

DebtDebt

EquityEquity


Capital


Capital

Capital

Spending

Technique

Options

Evaluation

Through

Modeling

Technique

Options

Evaluation

Through

Modeling

Example Development of Business Plan

Example Activities

Source ICF


Exhibit 31Business Plan Development

Cash Flow Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11

Working Capital (Start) 40,000,000 31,637,500 27,686,010 25,538,207 23,444,248 19,991,710 15,912,597 14,047,140 11,962,270

Operating Revenue 2,744,094 2,396,536 2,725,847 2,819,215 3,779,495 4,136,597 4,719,013 6,091,082 5,433,022

Operating Expenses 4,315,595 4,128,026 4,314,317 4,268,174 5,672,700 5,629,043 5,746,804 7,175,952 7,032,587

Initial CapEx Outlay 3,791,000 2,220,000 559,333 645,000 559,333 2,586,667 837,667 - 192,667

Additional CapEx

Aircraft Security Deposits 3,000,000 - - - 1,000,000 - - 1,000,000 -

Working Capital Changes (8,362,500) (3,951,490) (2,147,803) (2,093,959) (3,452,538) (4,079,112) (1,865,457) (2,084,871) (1,792,232)

Working Capital (End) 31,637,500 27,686,010 25,538,207 23,444,248 19,991,710 15,912,597 14,047,140 11,962,270 10,170,038

Cash Flow Oct-11 Nov-11 Dec-11 2011 2012 2013 2014 2015

Working Capital (Start) 10,170,038 8,737,794 7,451,873 40,000,000 6,331,634 (5,087,537) 14,687,757 88,001,184

Operating Revenue 5,773,966 5,982,714 6,451,036 53,052,618 127,466,820 243,703,168 430,005,855 652,142,240

Operating Expenses 7,151,210 7,075,968 7,204,609 69,714,983 132,885,992 217,927,873 345,692,428 509,015,566

Initial CapEx Outlay 55,000 192,667 366,667 12,006,000 - - - -

Additional CapEx - 1,000,000 1,000,000 1,000,000 1,000,000

Aircraft Security Deposits - - - 5,000,000 5,000,000 5,000,000 10,000,000 10,000,000

Working Capital Changes (1,432,244) (1,285,921) (1,120,239) (33,668,366) (11,419,172) 19,775,294 73,313,427 132,126,674

Working Capital (End) 8,737,794 7,451,873 6,331,634 6,331,634 (5,087,537) 14,687,757 88,001,184 220,127,858

Thank You

Please contact Emre Serpen for queries

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Strategic Planning for Airlines Emre Serpen 15May13

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