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Write aviation business plan and tender small charter company named Flights For You which is located at Archerfield (Qld) of Australia.
PART 1: BUSINESS COST
Business Summary
The current study is based on a small charter company named Flights For You which is located at Archerfield (Qld) of Australia. Charter flights are called unscheduled flights which does not belongs to the routes associated with regular airline. The owner of the small charter company is use to rent charter flight as well as entire aircraft. The owner of the Flights For You charter company himself determine the location of departure and arrival along with the time of departure and arrival (Randt et al. 2015). There are some different types of air charter or charter flights such as private charter, public charter, affinity and single entity. The charter company is currently operating Cessna 172 with which the company use to conduct flying for 15 hours in a week for charters that include 5 days. The owner of the charter company is the chief pilot as well as the owner himself is the only pilot of the air charter. The company is use to operates with only one charter plane throughout the year which is flown by the owner himself who is the only pilot of the charter company. In this study, the current charter company user to rent its charter named Cessna 172 for private use. The time and place of departure and arrival and charges are determined by the owner himself.
About the business
The current study is about the air charter company named Flights For You which is located at Archerfield (Qld) of Australia and owned as well as operated by a single owner. The company operates it air transport business with only one plane. The owner of the charter company is the chief pilot who uses to fly the charter plane named Cessna 172. In a week Cessna 172 use to fly for fifteen hours on a charter consists of 5 consecutive days. The chief and only pilot of the charter company who is also the owner of the company usually operates additional charters for 10 hours in every month. The office of the Flights For You is at the home of the owner. For the only aircraft named Cessna 172, all required repair and maintenance work is done in Hobart which is the capital of Tasmania, the island state of Australia. The aircraft of Flights For You is going to be signed up for lease consisting with 5 years which will have a residual value of 25%. The owner of the company is use to draw a total wages of $75000 which includes superannuation.
The entire set-up costs associated with Flights For You charter company those includes costs of getting certificates of air operators, office equipments and old route are paid in the bank through which the company use to do its external financial activities related with its charter business. The company currently has got a request from the Department of Agriculture for submitting tender for providing flights for the academic researchers those are appointed by the department for investing wild dogs attack in Northern New South Wales (NSW) and South East Queensland of Australia. Due to this purpose, the charter company (Flights For You) needs to purchase a ATC rotating plotter. The company needs to plan for two flights during each month those are required to be scheduled for separate days in a month (Y?lmaz & Üzülmez, 2017).
The entire set-up costs associated with Flights For You charter company those includes costs of getting certificates of air operators, office equipments and old route are paid in the bank through which the company use to do its external financial activities related with its charter business. The company currently has got a request from the Department of Agriculture for submitting tender for providing flights for the academic researchers those are appointed by the department for investing wild dogs attack in Northern New South Wales (NSW) and South East Queensland of Australia. Due to this purpose, the charter company (Flights For You) needs to purchase a ATC rotating plotter. The company needs to plan for two flights during each month those are required to be scheduled for separate days in a month (Y?lmaz & Üzülmez, 2017).
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Place Your OrderAbout the market
The market from where the charter company, named Flights For You use to operate its business in and around Australia. The charter market of Australia is rapidly growing due to the development of different sectors such as education, business, travel and tourism, medical and more (Renwarin, 2017). The improved technology and its use in airways have modified the air transport mode in a unique way. This improvement of air transport which is entirely based on aircraft is become responsible for attracting people towards availing charter services. The tendency of customers to work faster related with educational, political, medical and others sectors has instigated the urge of using charters of the people. There are too many charter companies operating through Australia and its different states which have created market competitiveness as well as opportunities. For this reason, the businesses those are associated with air charters are having huge opportunities and competitive advantages (Flouris & Lock, 2016).
About the future
According to the present scenario of the Flights For You Company in terms of its productivity, degree of market capitalisation and profitability it is assumed that the company is having a great future. It is expected that in coming years, this small charter company will be able to make its strong identify in the Australian charter market. The air transportation business opportunities in the current market those are provided by the federal government is playing an important role in the growth and development of entire aviation industry. Thus, the growth of Australian aviation industry has started accelerating the growth of small charter business operating in the country at present (Murrieta-Mendoza, Botez & Patrón, 2015). Flights For You is a growing charter company which is experiencing financial and operating growth during last few years.
The reason behind such growth of the company is associated with the committed service which is provided by the company to its customers who are residing in and around Australia. The charter company has implemented after sale service which is also handled by the owner himself who is also the chief pilot of the company (Flouris & Lock, 2016). With this implementation, the owner of Flights For You become able to interact with its prospective customers to understand their choice and preferences. Here, the choice and preferences of the customers includes price of the charter, location and facilities those are intended by them to get during flights. The growing customer demand for availing charters is acts as the major opportunity for Flights For You Company to grow and to have a well build future in terms of business operation and profitability (Lohmann & Spasojevic, 2018).
The reason behind such growth of the company is associated with the committed service which is provided by the company to its customers who are residing in and around Australia. The charter company has implemented after sale service which is also handled by the owner himself who is also the chief pilot of the company (Flouris & Lock, 2016). With this implementation, the owner of Flights For You become able to interact with its prospective customers to understand their choice and preferences. Here, the choice and preferences of the customers includes price of the charter, location and facilities those are intended by them to get during flights. The growing customer demand for availing charters is acts as the major opportunity for Flights For You Company to grow and to have a well build future in terms of business operation and profitability (Lohmann & Spasojevic, 2018).
About the finance
The charter company named Flights For You has different sources of finance from which it use to collect funds to operate its charter business. The two major sources of finance for the company are the owner’s capital and Bank. The company use to retain its business profit which it uses to invest in regular business operation. According to the current scenario, the charter company (Flights For You) use to conduct flying for total 25 hours in a month which includes 15 regular hours and 10 additional hours per month. (Kivits & Charles, 2015). The costs of the aircraft named Cessna 172 is approximately $80000 which has already signed up for lease which includes a residual value of 25% of the book value of the aircraft. The lease will be hold for 5 years.
Particulars Annual Costs ($) Costs Per Hour($) Costs Per Month ($)
Set-up Costs:
Air operators certificate cost 178 7.12 14.83
Test Approvals cost 300 12 25.00
Cost of office equipments 385 15.4 32.08
Costs of old route permit 137 5.48 11.42
Total Set-up Costs ($) 1000 40 83.33
Fixed Costs: 0.00
Rent 1250 50 104.17
Lease on Equipments 450 18 37.50
Insurance 1500 60 125.00
Depreciation 12000 480 1000.00
Wages with superannuation 900000 36000 75000.00
Annual check and renewals of Pilot 1000 40 83.33
Total Fixed Costs ($) 916200 36648 76350.00
Variable Costs:
Operational Costs 34500 1380 2875.00
Costs of fuel 6000 240 500.00
Repair and maintenance 25000 1000 2083.33
Income tax 1050 42 87.50
Total Variable Costs ($) 66550 2662 5545.83
TOTAL COSTS ($) 983750 39350 81979.17
Set-up Costs:
Air operators certificate cost 178 7.12 14.83
Test Approvals cost 300 12 25.00
Cost of office equipments 385 15.4 32.08
Costs of old route permit 137 5.48 11.42
Total Set-up Costs ($) 1000 40 83.33
Fixed Costs: 0.00
Rent 1250 50 104.17
Lease on Equipments 450 18 37.50
Insurance 1500 60 125.00
Depreciation 12000 480 1000.00
Wages with superannuation 900000 36000 75000.00
Annual check and renewals of Pilot 1000 40 83.33
Total Fixed Costs ($) 916200 36648 76350.00
Variable Costs:
Operational Costs 34500 1380 2875.00
Costs of fuel 6000 240 500.00
Repair and maintenance 25000 1000 2083.33
Income tax 1050 42 87.50
Total Variable Costs ($) 66550 2662 5545.83
TOTAL COSTS ($) 983750 39350 81979.17
Table 1: Costs Structure of Flight For You
(Source: Created by the researcher)
(Source: Created by the researcher)
Particulars Amount ($)
Revenue from aircraft 1015000
Revenue from others sources 24500
Total Revenue ($) 1039500
Total Costs 983750
Annual Profit ($) 55750
Revenue from aircraft 1015000
Revenue from others sources 24500
Total Revenue ($) 1039500
Total Costs 983750
Annual Profit ($) 55750
The charter company named Flights For You use to incur several fixed costs and variable costs those are associated with its regular business operation. The company also has incurred some set-up costs. After meeting all relevant operational costs, Flights For You use to generate annual profit of $55750. The company is efficiently operating its charter business with a set of effective business strategies for which it become able to draw annual profit from its business (Halpern & Graham, 2018).
Supporting document
The Flights For You Company located at Archerfield (Qld) of Australia use to compliance with the aviation policy and regulations formulated by the Australian Government. According to this rule, the fundamental role of Flights For You Company is to act in accordance with the stated rules, policy as well as regulatory framework designed by the federal government for the Australian airports and aviation industries (Kivits & Charles, 2015). CASR Part - 135 has formulated a set of rules for the small aeroplanes those are used by air transport companies of Australia (here, Flights For You). According to the Part 135, small airplanes refers to the aeroplanes having the following features,
• It must have take-off weight which should not exceed 8,618 kg
• It must fit with a configuration of passenger seat which should not exceed 9 (casa.gov.au, 2018).
• It must have take-off weight which should not exceed 8,618 kg
• It must fit with a configuration of passenger seat which should not exceed 9 (casa.gov.au, 2018).
PART 2: TENDER
1. VNC Chart
Visual Navigation Chart of VNC Chart is a chart required to be designed before scheduling a flight. This chart helps to make flight plan which is related with controlling airspace. This chart helps the pilot to navigate while it is nearing to some restricted place or some danger area or controlled area (aft.com.au, 2018).
Figure 1: VNC Chart
(Source: Created by the researcher)
2. Flight plan of the intended trip
The flight plan includes the following,
• Destination which use to represent the place or location where the flight will land. For the current context destination is Northern New South Wales (NSW) and South-East Queensland (casa.gov.au, 2018).
• Flight Route, this helps the pilot to understand the route which he needs to follow during flying. For Flights For You, the flight route will be Archerfield (Qld) to Northern New South Wales (NSW) or South-East Queensland.
• Weather briefing, this help the pilot to measure the weather and its expected changes (Coffel & Horton, 2015)
• Altitude along with Cruise Profile. For Northern New South Wales (NSW) altitude is 1465m and for South-East Queensland it is 750m.
• Computed airspeed, this particular task helps the pilot to know about the speed of the aeroplane which he needs to maintain throughout flying.
• Distance to be covered, with this feature of a flight plan the pilot gets to know about the area or distance he needs to cover during a single flight. Distance which a pilot use to cover during flying consists the way begins from point of departure to the point of arrival. For the context of the current study, Flights For You needs to fly for 2548 kilometers per month (infrastructure.gov.au, 2018).
• Time or duration for each flight, each flight needs to have a certain time which is required by it to reach the destination. Here, the duration of each flight will be 5 hours in total for every single day.
• Weight to be carried by each flight, according to the current scenario Flights For You needs to carry 40 kgs for each academic researcher as the they are having gear of 40 kgs each.
• Equipments checking for the second time before take-off because for ensuring safety and security of the travellers (here, for the academic researchers) and pilot it is one of the basic requirement (aft.com.au, 2018).
• Destination which use to represent the place or location where the flight will land. For the current context destination is Northern New South Wales (NSW) and South-East Queensland (casa.gov.au, 2018).
• Flight Route, this helps the pilot to understand the route which he needs to follow during flying. For Flights For You, the flight route will be Archerfield (Qld) to Northern New South Wales (NSW) or South-East Queensland.
• Weather briefing, this help the pilot to measure the weather and its expected changes (Coffel & Horton, 2015)
• Altitude along with Cruise Profile. For Northern New South Wales (NSW) altitude is 1465m and for South-East Queensland it is 750m.
• Computed airspeed, this particular task helps the pilot to know about the speed of the aeroplane which he needs to maintain throughout flying.
• Distance to be covered, with this feature of a flight plan the pilot gets to know about the area or distance he needs to cover during a single flight. Distance which a pilot use to cover during flying consists the way begins from point of departure to the point of arrival. For the context of the current study, Flights For You needs to fly for 2548 kilometers per month (infrastructure.gov.au, 2018).
• Time or duration for each flight, each flight needs to have a certain time which is required by it to reach the destination. Here, the duration of each flight will be 5 hours in total for every single day.
• Weight to be carried by each flight, according to the current scenario Flights For You needs to carry 40 kgs for each academic researcher as the they are having gear of 40 kgs each.
• Equipments checking for the second time before take-off because for ensuring safety and security of the travellers (here, for the academic researchers) and pilot it is one of the basic requirement (aft.com.au, 2018).
3. Detail of the costs for a one-year contract and hourly rate
Particulars One Year Contract Costs ($) Hourly Rate ($)
Set-up Costs:
Air operators certificate cost 125 5
Test Approvals cost 200 8
Cost of office equipments 245 9.8
Costs of old route permit 75 3
Total Set-up Costs ($) 645 25.8
Fixed Costs:
Rent 950 38
Insurance 1500 60
Annual check and renewals of Pilot 1000 40
Total Fixed Costs ($) 3450 138
Variable Costs:
Operational Costs 34500 1380
Costs of fuel 6000 240
Repair and maintenance 25000 1000
Income tax 450 42
Total Variable Costs ($) 65950 2638
TOTAL COSTS ($) 70045 2801.8
Set-up Costs:
Air operators certificate cost 125 5
Test Approvals cost 200 8
Cost of office equipments 245 9.8
Costs of old route permit 75 3
Total Set-up Costs ($) 645 25.8
Fixed Costs:
Rent 950 38
Insurance 1500 60
Annual check and renewals of Pilot 1000 40
Total Fixed Costs ($) 3450 138
Variable Costs:
Operational Costs 34500 1380
Costs of fuel 6000 240
Repair and maintenance 25000 1000
Income tax 450 42
Total Variable Costs ($) 65950 2638
TOTAL COSTS ($) 70045 2801.8
Reference List:
(JOURNAL)
Coffel, E., & Horton, R. (2015). Climate change and the impact of extreme temperatures on aviation. Weather, climate, and society, 7(1), 94-102.
Kivits, R., & Charles, M. B. (2015). Aviation planning policy in Australia: Identifying frames of reference to support public decision making. Journal of Air Transport Management, 47, 102-111.
Lohmann, G., & Spasojevic, B. (2018). Airline business strategy. The Routledge Companion to Air Transport Management, 139.
Murrieta-Mendoza, A., Botez, R. M., & Patrón, R. S. F. (2015). Flight altitude optimization using genetic algorithms considering climb and descent costs in cruise with flight plan information (No. 2015-01-2542). SAE Technical Paper.
Randt, N. P., Jessberger, C., Plötner, K., & Becker, A. (2015). Air traffic growth, energy, and the environment 2040: drivers, challenges, and opportunities for aviation. International Journal of Aviation Management, 2(3-4), 144-166.
Renwarin, J. M. (2017). The Influence Of Aviation Industrial Environment And Market Orientation On Competitive Strategy And Its Effects On Aviation Business Performance (Study On Aviation Industry In Indonesia). Journal of Internet Banking and Commerce, 22(3).
Y?lmaz, A. K., & Üzülmez, M. (2017, October). Institutional Tailored approach of Enterprise Risk Management to Organizational Personality in Aviation Business Management and Strategy. In 3rd International Conference on Economic and Social Impacts of Globalization (p. 192).
Kivits, R., & Charles, M. B. (2015). Aviation planning policy in Australia: Identifying frames of reference to support public decision making. Journal of Air Transport Management, 47, 102-111.
Lohmann, G., & Spasojevic, B. (2018). Airline business strategy. The Routledge Companion to Air Transport Management, 139.
Murrieta-Mendoza, A., Botez, R. M., & Patrón, R. S. F. (2015). Flight altitude optimization using genetic algorithms considering climb and descent costs in cruise with flight plan information (No. 2015-01-2542). SAE Technical Paper.
Randt, N. P., Jessberger, C., Plötner, K., & Becker, A. (2015). Air traffic growth, energy, and the environment 2040: drivers, challenges, and opportunities for aviation. International Journal of Aviation Management, 2(3-4), 144-166.
Renwarin, J. M. (2017). The Influence Of Aviation Industrial Environment And Market Orientation On Competitive Strategy And Its Effects On Aviation Business Performance (Study On Aviation Industry In Indonesia). Journal of Internet Banking and Commerce, 22(3).
Y?lmaz, A. K., & Üzülmez, M. (2017, October). Institutional Tailored approach of Enterprise Risk Management to Organizational Personality in Aviation Business Management and Strategy. In 3rd International Conference on Economic and Social Impacts of Globalization (p. 192).
(BOOK)
Flouris, T. G., & Lock, D. (2016). Aviation project management. Routledge.
Flouris, T. G., & Lock, D. (2016). Managing Aviation Projects from Concept to Completion. Routledge.
Halpern, N., & Graham, A. (Eds.). (2018). The Routledge Companion to Air Transport Management. Routledge.
(WEBSITE)
Advanced Flight Theory (2018). VNC Chart. [Retrieved from: http://www.aft.com.au/store/contents/en-us/d54.html Accessed on 15 February 2018].
Civil Aviation Safety Authority (2018). CASR Part 135 - Australian Air Transport Operations - Small Aeroplanes. [Retrieved from: https://www.casa.gov.au/standard-page/casr-part-135-australian-air-transport-operations-small-aeroplanes Accessed on 15 February 2018].
Department of Infrustructure, Regional Development and Cities (2018). Aviation Policy & Regulation. [Retrieved from: https://infrastructure.gov.au/aviation/legislation/policy/index.aspx Accessed on 15 February 2018].
Advanced Flight Theory (2018). VNC Chart. [Retrieved from: http://www.aft.com.au/store/contents/en-us/d54.html Accessed on 15 February 2018].
Civil Aviation Safety Authority (2018). CASR Part 135 - Australian Air Transport Operations - Small Aeroplanes. [Retrieved from: https://www.casa.gov.au/standard-page/casr-part-135-australian-air-transport-operations-small-aeroplanes Accessed on 15 February 2018].
Department of Infrustructure, Regional Development and Cities (2018). Aviation Policy & Regulation. [Retrieved from: https://infrastructure.gov.au/aviation/legislation/policy/index.aspx Accessed on 15 February 2018].
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