Assignment
Review the following:
Your business: How to prepare a business plan. (2015, Apr 19). Tuesday Business Post.
Warren Buffet said that investors would have been better off if the Wright brothers had not invented the airplane in 1903. Investors have lost billions of dollars in international airlines that have gone bankrupt over the years (TWA, Pan Am, Braniff to name a few). Discuss why you think that many international airlines, both long-time market participants and start-ups gave gone bankrupt. Discuss how deregulation, labor issues and the increase in demand elasticity due to the internet led to the bankruptcy of almost all of the so-called "legacy airlines" that were founded prior to 1980. Discuss the barriers to entry a new international airline would face. Then, assume you are given the task of creating a new international airline. Using the economic concepts discussed in this course, create a business plan for your new international airline.
Be sure to include:
An executive summary of the business plan
Pro-forma financials
The issue of high fixed costs
How you plan to deal with U.S. and Foreign airline regulation
How you expect to raise capital
How you will address currency risk
What pricing strategies you will employ
Estimates of the elasticity of demand for your service
What type of employee compensation policies you will pursue
What it would take for you to personally fly on a start-up international airline