TABLE OF CONTENTS

1.0 EXECUTIVE SUMMARY.............................................................................................5

2.0 BUSINESS AND PURPOSE..........................................................................................6

3.0 PRODUCT AND SERVICE...........................................................................................7

4.0 MARKETS AND COMPETITORS...............................................................................9

5.0 SALES AND MARKETING PLAN............................................................................12

6.0 MANAGEMENT PLAN..............................................................................................14

7.0 OPERATION PLAN.....................................................................................................15

8.0 FINANCIAL FEASIBILTY.........................................................................................16

8.1 Profit and Loss................................................................................................................16

8.2 Balance Sheet.................................................................................................................17

8.3 Cash Flow Forecast........................................................................................................18

8.4 Break-Even Point............................................................................................................18

9.0 TIMESCALE, RISKS AND KEY ISSUES TO BE ADDRESSED.............................19

9.1 Strengths.........................................................................................................................20

9.2 Weaknesses.....................................................................................................................20

9.3 Opportunities..................................................................................................................21

9.5 Risks...............................................................................................................................22

REFERENCES.........................................................................................................................23
 LIST OF FIGURES
Figure 1: low cost airlines market............................................................................................10
Figure 2: Distributions channels..............................................................................................11
 LIST OF TABLES
Table 1: SWOT Analysi...........................................................................................................21
 1.0 EXECUTIVE SUMMARY
The paper purpose of this business plan is to draw insights on starting up a business and the
costs involved in doing so. It outlines some key facts on a business strategic plan with a
vision and mission for the business portraying its existence. It also analyses the company’s
services offered, the industry and its competitors and the customers it serves. It draws out a
marketing and sales plan, an operations plan and a financial plan for necessary resource
allocation. It also draws out a plan for time-management and analyses the possible risks of
starting up a new business venture.
 2.0 BUSINESS AND PURPOSE
Strategic management and planning are vital business concepts. The core of any business
strategy is to clearly outline the purpose of their existence in the industry of their own and
define the mission, vision and objectives which acts as a guiding framework that ensures the
business is in par with those listed above and achieves its daily operations smoothly and
assists with achieving its ultimate objective of shareholder wealth maximization (Orcullo,
2007; Bhandari and Verma, 2013; Maleka, 2014).

The airline Air tour was established with the intention to serve tourists in different nations to
visit the Sri Lanka heritage and recede back to their countries ensuring safety and guarantying
affordable rates to move back and forth.

The mission of the Air tour is to deliver airline services unlike the manner of the competitors
at premium prices, by moderating improvements to maintain affordability while maintaining
quality and service to sustain loyalty and satisfaction of tourists and ensuring safety.

The vision of Air tour is to be the most preferred Air line of tourists at all times and make
certain of tourist enjoyability.

Some of the objectives that Air Tour would like to establish and certainly meet to mark their
presence in the Air Line industry can be listed as follows:

1. Provision of better and quality service to tourists globally

2. Grow our presence in key countries and nations
3. Be the first choice of Air line to meet travel, leisure and entertainment of citizens world
wide
4. Meet customers needs of reasonable and affordable prices and safety whilst meeting
profit margins via implementation of different tactics
5. Ensure a smooth and enjoyable journey back and forth
6. Effective offers and packages to meet seasonal demand
7. Target a larger segment of tourists via social media platforms and tourism related
websites
 3.0 PRODUCT AND SERVICE
Introduction of an Airline for tourists was initially planned out as the tourist industry is an
showing an upward trend in major places of visit for tourists and currently people tend to
enjoy their leisure time and holidays being away from their boring and monotonous lives.
Despite the prevailing pandemic situation tourists are readily awaiting to travel once Airports
open. Further, Sri Lanka is a heavily visited tourist destination with vast areas of places to
visit such as the Sigiriya fortress, Yala National park, Temple of the Sacred Tooth Relic,
Adams peak and more, and tourists tend to enjoy the beautiful sunny climate and beaches that
this beautiful wonder of Asia has to offer (Planetware, 2021).

The reason we established the idea to name this Air Line as Air Tour was mainly because it
sets out an imprint in the minds of customers, employees and third parties that we exist to
meet to meet the demanding needs of our tourists in the best possible way as the Airlines very
name is Air Tour.

Air Tour is strategizing and planning the scope of our business only for Tourists and would
like to define ourselves as an economical airline providing airline services of reasonable
quality, affordable within an averaged-price structure, thus, boasting of being able to
maintain the critical balance between reasonable prices and the best experience for our tourist
passengers. Our goal of rooting for a dynamic management team comprises of a CEO who
would also be appointed for holding the position of Head of Finances, our Vice President of
Operations, Vice President of Marketing and our Vice President of Human Resources.
Moreover, we are planning on delivering after travel services by sharing information of
affordable accommodation facilities. In case, there Is a delay in flight takeoffs due to
unavoidable circumstances we would like to ensure convenience to customers to spend the
night or their day time by offering suitable accommodation as it can definitely be highlighted
as a delay from our side.

Air Tour is new to the industry. To ensure its survival, critical strategic decisions will have
to be made in addition to maintaining an efficient operation. There is no question that the
business is about to change dramatically in future and more futuristic forecasts would have to
initiated to attract tourists by meeting their needs. Air Tour is thereby looking forward to a
strategical breakthrough that would help it face competition profitably while keeping its
customers satisfied. Air Tour is looking to compete strongly but ethically while investing in
best measures for improvement in order to insure its long-term survival in the industry.
At present the ideal thing to do is to follow the budget affordable pricing structure as part of
our initial strategy, as it seems most effective to start out as a mid-priced carrier, and stay in
that normal price range. However, we also plan to add in the provision of amenities beyond
what competing discount airlines are offering, so that while keeping costs below those of the
luxury airlines, we also serve a much higher service value for our passengers. This is
expected to result in our airline being quite profitable and holding importance to quality and
service to maintain customer loyalty for our brand, as per our objective. We should be
constantly monitoring the effects of team decisions made as well.
 4.0 MARKETS AND COMPETITORS
A low-cost airline, No-frills, discounted airline or budgeted airline whatever preferred out of
the named variables could be defined in basic terms as an airline that generally operates with
lower fare charges and comparatively lower luxuries than the household airline companies
provided to the customer. Where, the comparative revenue lost than the typical airline
companies is made up by decreasing ticket prices, charges for food which is not included in
the ticket price but which needs to be purchased extra, priority boarding, seat allocating,
baggage so on and so forth.

Although while the simple transition had to take turns from the luxuries of flying to a pocket
friendly era as of now there was a lot of moaning in terms of the decline in quality but with
time, it was adjusted since airfares had a considerable drop and the airline itself had a high
amount of revenue considerate to that very fact which emerged as a win-win situation for
everyone and the strategy of a low-cost airline had to be accepted.

The rise of the low-cost airlines has been acting as a catalyst to rise in global economic
activity, ease of travel, the widening of the travel and tourism industry, urbanization, changes
in lifestyle, globalization etc. Moreover, the increasing purchasing power of middle-class
income earning families and the development of e-literacy has been a stimulant to a boost in
the acceptance of a low-cost airline. [ CITATION UKE20 \l 1033 ]

Considering as explained the high weightage that could be beheld currently of the low budget
airline industry, the global low-cost airline market could be segregated based on purpose,
destination and also the distribution channels.

When the relevant market has to be segregated according to the purpose of travel in mind of
the passenger, it was mostly “Leisure Travelers” and next in line was “Visiting Family and
Friends” abroad with no surprises there as mentioned previously about the increase of
purchasing power of the middle-class and providing a great opportunity to fulfil basically
which was only a dream a few years back but made possible since the evolution of the budget
airlines. Which also rings a bell to us about how the same could develop and the company
could turn the same upper hand into building a stable income as if we were to become
futuristic, one could always understand that the curve in prospect is only going to move
upwards. Moreover, if there is anything that a company needs to focus more on and improve
in relates to purpose of the market is attracting more business traveler’s more lenient towards
low-cost airline where a substantial drop is visible since most of the time the tickets are being
purchased by the company or else the company would prefer any partnered/ affiliated airline
for their employees to travel. Nevertheless, the silver lining of the mentioned fact is that
presently there has been gained momentum in companies accepting Budget Airlines as
business travel is a huge cost center for them.

[ CITATION Pra18 \l 1033 ]

Figure 1: low cost airlines market

Since the
revolution of this new Budget Airline concept into the world there has not been any visible
drastic change in relates to the distribution channels adopted by the companies present in the
market. Where, the main strategy identified by the companies in the initial stages of the 21 st
century with the evolution of internet is to introduce online booking of tickets eliminating the
travel agencies so that middle man charges would be terminated. And also, where companies
introduced spot booking where passengers could book a ticket if available right before
boarding and travel to their preferred destination. Moreover, distribution channels for low-
cost airlines could be segmented as shown below.

[ CITATION ALT19 \l 1033 ]

 Direct Connection – Distribution Channel for the company is their own website or
spot booking huts available in airports.
 Global Distribution System – A computerized network system owned/ operated by a
company which acts as a middle man establishing a connection between the passenger
and the airline where the middle man is usually a hotel, car rental company or
famously a travel agency.
 Figure 2: Distributions channels

The Global low-cost airline market has been dominated by the European region as of today.
However, the Asia – Pacific continent is in line to witness the highest growth rate between
the period of 2017 – 2023 as CAGR rating is expected to be 12.8% in the relevant period.
Providing a substantial leverage to increase sales and boost revenue which is also mainly due
to the fact the Asia Pacific region has a considerable number of developing countries where
as mentioned previously the increase in purchasing power of the middle-class families is
what acts as a blessing to the company.

Major companies identified as threats to any Low-cost airline could vary between AirAsia
inc. Virgin America, Norwegian Air Shuttle AS, Easy Jet PLC, Jetstar airways Pvt Ltd. etc.

[ CITATION Pra18 \l 1033 ]

Key market benefits for stakeholders out of the report delivered thus far would be,

 That this report provides an in-depth analysis of the global low-cost airlines market to
identify potential investment areas.
 Outlined current trends and future plots to determine potential state of the market and
have a leading edge than the competitors.
 Key drivers, restraints, and opportunities are indicated along with their impact.
 5.0 SALES AND MARKETING PLAN
A marketing plan can be defined as a strategic guide that a company uses to organize,
execute, and keep track of their marketing strategy over a specific time period. It can consist
of separate marketing strategies for the different marketing teams across the company but it is
pertinent to mention that all work towards the same business objective.

Advertising can be portrayed as more than just deciding how much to spend; it involves
developing a message that appeals to the target audience. A good advertisement contains the
following elements: copy (the written portion of the ad), illustration (photos and graphics),
and signature (company logo).

Air Tours marketing plan would be portrayed in the following way:

1. An effective marketing plan should be initiated by portraying the Air Tours mission as
described in the business and purpose section.

‘The mission of the Air tour is to deliver airline services unlike the manner of the competitors
at premium prices, by moderating improvements to maintain affordability while maintaining
quality and service to sustain loyalty and satisfaction of tourists and ensuring safety’.

2. Secondly, list of KPI’s should be established and since we are targeting an audience of
travelers, KPI’s such as different websites visited by tourists worldwide, number of
bookings through a specific travel website, number of targeted passengers in a
day/week/month and year, number of customers obtained through seasonal promotions,
seasonal sales targets, number of satisfied customers and more.
3. Identification of the buyer personas- Air Tour has identified millennial tourist as their
main target market as they can be classified as tourists who enjoy travel and leisure,
also couples and families who travel on vacations and holidays.
4. Description of content initiatives and strategies which will include, the content Air Tour
is looking forward to create, How much of it we are planning on creating which will
include colorful company logos, photos and graphics and clear and brief descriptive
content daily to spread awareness and move on to weekly, monthly and quarterly
intervals so the listed goals can be achieved. The goals (and KPIs) used to track each
type which can include organic, social media email traffic referral traffic and drive that
traffic to areas such as social media and blog pages and use of channels such as social
 media advertising, advertising through blog posts, travel and leisure websites and more
and Air Tours own website.
5. Air Tour will also ensure of marketing plans they are planning on omitting to make
certain of effectiveness. This section will include aspects that Air Tour aren't serving in
this particular plan. Thus, these would help us justify the mission, buyer personas, KPIs,
and content as it is definitely not possible to please everyone in a marketing campaign.
6. Define the marketing budget- use of sponsorships and many free channels such as social
media platforms do not mean that there are other hidden expenses that should be borne
and these costs could be used to develop a marketing budget and each expense can be
outlined in this particular area of the marketing plan.
7. It is vital to identify competition as there are various types of Airlines offering various
services as described thoroughly in the section of market and competition.
8. Finally, once the marketing plan is fully set out Air Tour would set out each personals
responsibilities and which team leaders are responsible content types, channels, KPIs,
and more
 6.0 MANAGEMENT PLAN
This section discusses Air Tours management personal who is the main driving force of the
company with the right skills and characteristics in managing Air Tour. This section would
portray Air Tours dynamic management team who is responsible for the companies strategic
decisions, which would initially comprise of a CEO who would also be appointed for
holding the position of Head of Finances, our Vice President of Operations, Vice President of
Marketing and our Vice President of Human Resources and highlight the professional and
entrepreneurial characteristics each of these members of the management should deliver and
is responsible for and factors that would drive and motivate them. The rest of Air Tours team
such as operations level employees and support staff, which will include Air Tours complete
team would also be highlighted and each person’s importance in driving Air Tours success as
an Air Line company.

Air Tour would initially launch as a public limited company, which means that the owner and
the company are considered as two separate entities and can sell shares to the general public
and raise capital. It would require Air Tour to publish its financial position publicly to
maintain transparency. To establish as a PLC the owners has to come up with a name for the
company, which is already named as Air Tour, create an application to register, draft its
memorandum and articles of association, File incorporation documents with companies’
house and finally apply for a trading certificate. Along with these documentations comes the
use of appropriate software to manage accounts, auditing, Submission of accounts and tax
returns to Companies House each year, register for corporation and PAYEE tax and filing of
Air Tours Tax returns.
 7.0 OPERATION PLAN
Air tour being the project name for the brand-new airline company that will turn its heap of
focus on single class long haul scheduled flights. The main objective of Air Tours would be
to enter a market of flights that run up and down from Colombo to Europe to bring in tourists
to the country where business class is a renowned King, a visible monopoly such that even an
economy class traveler is a rare sight considerate to the class of people that prefer travelling
to and from the destinations. Parallelly to reach the objective of making travelling to and
from Europe a journey that does not act as a burden to one’s wallet.

Air Tour initially will only focus in landing tourists from the United Kingdom (Heathrow
Airport London) and from Germany (Frankfurt Airport) as Ceylon has been welcoming the
most tourists from the United Kingdom and Germany. [ CITATION Tra21 \l 1033 ] also, in being
considerate to the travelling restrictions imposed by various jurisdictions. Hence, Air Tour
will focus in expanding the countries they cater for within due course in Europe and enter the
Asian Market as well which would’ve been as easier start but not right now due to the ever-
growing Covid-19 Global Pandemic.

Air Tour will operate its services using an Airbus Family (A320) which would be configured
with 100 seats providing a very spacious, and a pleasant cozy environment, a mandate for a
long-haul flight.

Air Tour will first lease four aircrafts from the famous Amedeo which will ensure safety as
they’ve been front runners in the industry for many years allocating two each for the
mentioned destinations and is hoping to expand the inventory of flights to 8 by the end of the
substantial year. Flights will be leased and not bought or is not partnered with any other
organization would mainly be considerate to the fact of reducing costs as purchasing a new
flight would incur a weighty initial capital to be invested thus will be forced to reflect on the
fares. Purchase of flights is definitely in the books of Air Tour but only as a long-term plan
and not in the near future.

Air Tour will charge 30,000 LKR for a one-way ticket from the destination as opposed to the
75,000 LKR that would be charged for an economy class ticket in a luxury airplane from
household names such as Sri Lankan Airlines, Etihad Airways who do not even offer a direct
flight and Fly Emirates. Also, in addition to this lucrative offer from Air Tours passengers of
Air Tours will be offered a considerable save of Time, Money, Convenience and also a class
act of travelling.
 8.0 FINANCIAL FEASIBILTY
8.1 Profit and Loss

  Y3 Y2
Revenue 12220 11350
     
Expenditure    
Staff cost 2400 2200
Fuel cost 4800 5300
Commission and Incentives 400 220
Landing, Parking and Overflying charges 800 770
Inflight meals 250 225
Advertising cost 98 430
Aircraft maintenance 755 950
Crew expense 220 185
Other passenger cost 55 55
Loan Interest 600 600
Other operating expenses 892 782
  11270 11717
Operating profit 950 -367
Finance Charges -680 -720
Interest income 125 80
     
Profit before taxation 395 -1007
Taxation 285 0
Profit for the financial year 110 -1007
     
8.2 Balance Sheet

  Y3 Y2
Non- Current Assets    
Property, Plant and Equipment 2250 1800
     
Current Assets    
Inventories 450 330
Trade Debtors 250 200
Deposits and other debtors 170 150
Prepayments 225 100
Other short-term assets 125 180
Investments 220 150
Cash and Bank balance 650 400
  4340 3310
Equity    
Share capital 2800 1130
Other reserves 320 220
  3120 1350
     
Current Liabilities    
Borrowings 435 850
Current Tax Payable 80 75
Trade and other creditors 120 145
Sales in advance of carriage 35 20
Provisions 150 120
     
Non-Current Liabilities    
Loan 400 750
  4340 3310
     
8.3 Cash Flow Forecast

  Y3 Y2
Cash Flow from operating activities    
Cash received from customers 8500 7500
Wages paid to employees -4200 -3700
Cash paid for interest -600 -600
Cash paid for income taxes -285 0
     
Net Cash flow from operating activities 3415 3200
     
     
Cash flow from Investing activities    
Purchase of property plant and equipment 2250 1800
     
Net cash flow from investing activities 2250 1800
     
Cash flow from financing activities    
Proceeds from line of credit 200 150
Payments on line of credit 75 60
Proceeds from long term debt 125 75
Dividend paid -55 -45
Payments on long term debt 55 60
     
Net cash flow from Financing activities 400  300 
     
Net increase/decrease in cash 6065  5300 
     
Beginning cash balance  650  400
Ending cash balance 6715   5700
     

8.4 Break-Even Point

B.E point

Total Fixed Costs 405000

150 UNITS
SP-VC 30000-27300
 9.0 TIMESCALE, RISKS AND KEY ISSUES TO BE
ADDRESSED
A Gantt chart is used to portray time scale in which Air Tour initiated and established its
operations in the Airline industry

Y1 & Y2 J F M A M J J A S O N D J F M A M J J A S O N D

Planning
Planning
initiation
Resource
planning
Quality
planning
Contactin
g
Phase
review
Design
Recruitm
ent
Building
of Airline
Website
creation
Advertisi
ng

The below SWOT analysis provides an in-depth analysis and overview of Air Tours. Even
though the low-cost airline has gained fandom in recent years gaining excessive popularity
and a stable revenue could be earned comparative to investing in other industries Changing
market conditions, the outbreak of COVID-19 offering unpredictable unprecedent time ahead
of us, following SWOT analysis would come in handy to refine the company’s strategy and
focus on the efficiency of the pros while improving the cons (Jangra, Majra and Singh, 2016).
9.1 Strengths
 Air Tour can offer an on-time travel 
service with added incentives to the
passengers such as online booking,
ticketless travelling travel services and
also offering discounts for bulk
purchases of tickets.
 Air Tour has a policy of only adding
modern planes which ensures the safety
of the passengers, reliability, efficiency
and with an added advantage that
modern planes come with the latest 
technology that most of the millennials
who take over the world prefers for.
 The Sales and Distribution department
Air Tour has developed a very user-
friendly website along with WIX one of
the world’s leading website developers
ensuring that potential travelers could
reserve a ticket hassle free providing a
leading edge from the competitors.
 Air Tour is focused on customer loyalty
and is hoping to build a brand loyal
customers fan base by offering online
sales alerts as E-mails or Texts.
9.3 Opportunities
 If successful Air Tours could
lead to new destinations across
Europe and Asia so that they
could cater different customer
segments and Air Tours who
9.2 Weaknesses
Budget Airline industry is an extremely
competitive industry with numerous
companies fighting for passengers of the
same type. This same scenario has led to
a place where all competitors would
have to hold onto a said price where if
not customers could be lost or earned if
any adjustments has to be made and will
need to have a very keen eye on
competitors on their improvements.
Air Tours does not plan in offering free
food for flights that run for more than
two hours especially since Air Tours has
only focused on long haul flights
initially which is a major setback
comparatively to competitors like Air
Asia.
9.4 Threats
 Increased airport fees currently
imposed by different Airports is not
something that Air Tours is
expecting of but has a high rate of
possibility with the emergence of
 only focus on bringing down
tourists to the country
successful could also focus on
the two-way trip for one flight
specially to Italy and Australia
since most of Sri Lankan
families live in the mentioned
countries.
 Air Tours can offer visiting
tourists in-island travel packages
if successfully could partner
with an organization who is
willing to which would attract
more passengers into the Air
Line.
Covid-19 that governments would
if need to incur revenue of some form
and airports would be a suitable
place to implement that. Which
would directly affect the plans of Air
Tours but if that is to be reflected on
the ticket fares it would be a major
setback as it could lead to loss of
customers.
 Established international competitors
are fast moving where they are
increasing their route options and
flights while still maintaining their
low costs which will be a huge threat
to Air Tours.
 External Market factors such as the
rise of the price of crude oil,
environmental changes etc. could
directly affect Air Tours which Air
Tours should be very mindful in
dealing with such while maintaining
the low costs of the fare would be a
gigantic task ahead.

Table 1: SWOT Analysi

9.5 Risks
For Air Tours to kick start their operations and move on in developing their services they
would have to be very much vigilant of the facts mentioned above while also readying
themselves for possible global risks such as,

 System Failures and Aging Technology Infrastructure where a network interruption

could lead to flight cancellations, flight delays and possibly loss of customers to
competitors.
 Pilot Shortage as many qualified aviation pilots now prefer the Air Force rather than a
private organization since the Air Force offers brand name while also now a good pay
compared to airlines. Especially since Air Tours is a long-Haul budget flight, it will
have its own consequences in finding proper pilots to fly.
 Climate Change as the ability to successfully complete a trip on time always depends
on how stable the environment is and Air Tours flying across continents would have
to be very mindful in the change of environments while reducing the delay of flights
alongside ensuring the passengers safety.
 Covid-19 as it is a global pandemic and travel restrictions being imposed worldwide
would mean that passengers would not have the freedom to travel abroad where Air
Tours would initially have to face a very gigantic task ahead as they only cater to a
limited route rather than other established airlines who owns a much more wider
variety.
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