LCC start-up business case
North American investment group
LCC start-up business plan & investor guidance
The project sponsors required an operational low cost carrier (LCC) start-up plan be developed as part of a larger investment prospectus for launching a new LCC in the Canadian marketplace. Specific requirements of the business case are detailed below:
Project requirements:
- World-wide LCC product, service & pricing benchmark analysis
- Marketplace competitive analysis (route specific)
- Complete product specification & service offering recommendations
- Commercial plan development
- Financial analysis (5-year outlook)
Project undertakings:
- Benchmark & review of LCC’s world-wide including start-up capital funding, ownership structure, operating finances & profitability, brand positioning, product & service levels, and strategic plans.
- In depth route-specific competitive analysis (product, pricing & schedule) of current competitive set.
- Detailed ‘war-game’ scenarios of anticipated competitive reaction to the LCC launch (e.g. short- and medium-term adjustments to product offerings) and estimated cost implications for competition to implement those adjustments. Identification & costing of tactical response options available to the LCC to combat presumed aggressive competitive pressure.
- Product design specifications for all pre-, post- and in-flight product & service levels. Also, a preliminary financial (costs) assessment for potential product & service enhancements (in response to competitive actions and/or as a means to increase % share).
- Recommendations for brand implementation & livery execution.
- Commercial plan detailing network, fleet, product & service specifications, staffing, organizational structure, corporate & ownership structure.
- Financial analysis completed (for initial start-up & on-going operations) based on Commercial plan. Projected 5-year revenue & expense outlook presented.
Project outcomes:
- LCC launch plans put on hold dues to macro economic uncertainties
- Business plan reviewed & updated
- Decision to launch put on hold
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