Crystal Airlines Takes you anywhere you need to

Crystal Airlines Takes you anywhere you need to go! Crystal Airlines A Semester in Summary By: CJ Husselbee, Matt Burns, and Carly Mongeau WWW. CRYSTALAIRLINES. COM Crystal Airlines

Crystal Airlines TABLE OF CONTENTS SI NO. TITLE OF THE SLIDES SLIDE NO 1 Semester to Date 3 2 Individual Quarter Information 6 3 Ratios Compared to the Rest of the Market 13 4 Fleet, Routes, and Corporate Decision 14 5 Initial Strategy 15, 23 6 Fleet Decisions 19 7 Our Airline vs. The Market 34 8 Thank You! 40

Our Semester to Date: Quarter 7 Information Crystal Airlines

Our Semester to Date: Quarter 7 Information Crystal Airlines

Our Semester to Date: Quarter 7 Information Crystal Airlines

Quarter #1 and Reaction HOT OFFERS SEE THE NEW HOT OFFERS FROM “ARRIVALS” Crystal Airlines

Quarter #2 and Reaction HOT OFFERS SEE THE NEW HOT OFFERS FROM “ARRIVALS” Crystal Airlines

Quarter #3 and Reaction HOT OFFERS SEE THE NEW HOT OFFERS FROM “ARRIVALS” Crystal Airlines

Quarter #4 and Reaction HOT OFFERS SEE THE NEW HOT OFFERS FROM “ARRIVALS” Crystal Airlines

Quarter #5 and Reaction HOT OFFERS SEE THE NEW HOT OFFERS FROM “ARRIVALS” Crystal Airlines

Quarter #6 and Reaction HOT OFFERS SEE THE NEW HOT OFFERS FROM “ARRIVALS” Crystal Airlines

Quarter #7 Changes HOT OFFERS SEE THE NEW HOT OFFERS FROM “ARRIVALS” Crystal Airlines

Ratios Compared to the Industry LOW COST TRAVELING *TRAVEL AROUND THE WORLD FOR 50$ TO 99$ Crystal Airlines

Fleet, Routes, and Corporate Decision Crystal Airlines Ø Fleet: Maintenance level, Fuel, Aircraft Ø Routes Ø Corporate decision: Social responsibility project

Initial strategy Crystal Airlines Ø Overall: Stay a discount airline, but offer high value for the customer in reliability, cleanliness, and diversified routes, specializing in foreign and business type routes Ø Fleet: Keep fleet small, stick with 3 Beechcraft Ø Routes: Grow a little by Expanding into route F (foreign city), and more service to route D, I thought there would be growth Ø Corporate decision: funding for aviation mechanics program at community college

Fleet: Influences on decision making Crystal Airlines Fleet Depreciation : Quarter 1 Purchase Cost Accum. Depreciation Book Value Lease Cost per Qtr Aircraft #1 Beechcraft 1900 700, 000 212, 250 487, 750 0 #2 Beechcraft 1900 800, 000 264, 000 536, 000 0 #3 Beechcraft 1900 1, 000 367, 500 632, 500 0

Fleet: Influences on decision making From Income Statement: Fleet expenses Crystal Airlines

Fleet: Influences on decision making Aircraft Scheduling Crystal Airlines

Fleet decisions Crystal Airlines Ø I kept the 3 Beechcraft 1900 s until Quarter 6, my strategy was “routes first, fleet second” in other words, finding profitable routes before upgrading any aircraft Ø This strategy kept my operating costs low while being able to test out a lot of new routes without losing too much money Ø Although the lack of amenities limited number of seats I could sell for longer routes and luxury routes Ø Kept mileage under maximum until later in game

Fleet decisions Crystal Airlines Ø I was satisfied with the sales the airline was bringing in by Quarter 6, so I leased an Aerospatiale ATR 42 ($185, 000/qtr)for longer flights/luxury market Ø And sold 1 Beechcraft 1900 due to high depreciation Ø In Quarter 8 I leased a British Aero 31 ($82, 000/qtr) to bring added luxury for the shorter flights with cabin class service Ø Went over max mileage, got fined by FAA

Fleet decisions Crystal Airlines Aerospatiale ATR 42: leased in Q 6 o Cheaper to maintain than a jet o Ideal for our resort route o Can hold 46 people, almost as many as top shelf Canadair, but at a cost of $1. 4 million less, so it seemed like a good value

Fleet decisions Crystal Airlines British Aero 31: leased in Q 7 o Similar to Beechcraft, but offers cabin class service o But no flight attendant required o More passenger comfort o Affordable, lease was only $2000 more than Beechcraft

Fleet, Routes, and Corporate Decision Crystal Airlines Fuel Ø Quarters 1 -5: all fuel bought on contract Ø Quarter 5: Switched Fuel to ½ contract, ½ spot Quarter 8: all fuel bought on contract Ø Influences on decision making

Fleet, Routes, and Corporate Decision Crystal Airlines Maintenance Ø Used good maintenance to separate our discount airline from the others, keep older planes reliable Ø Level 2 until quarter 5 Ø Level 3: more frequent cleaning and full preventive maintenance, Q 5 -Q 9. Cost: $3, 500 per aircraft per quarter. Ø After purchasing bigger plane, and entering markets where people expect luxury (resort, business travel) I kept maintanance up because customers had come to expect it

Fleet, Routes, and Corporate Decision Routes: Influences on decision making Crystal Airlines

Fleet, Routes, and Corporate Decision Routes: Influences on decision making Crystal Airlines

Fleet, Routes, and Corporate Decision Crystal Airlines Routes strategy changes Ø I was focusing on seats sold rather than # of flights at the beginning, most routes only had 1 flight to them Ø I kept standard markets, and added foreign city route (Quarter 1), and resort route (Quarter 5) Ø Kept routes under 420 miles, that is max recommended for Beechcraft

Fleet, Routes, and Corporate Decision Crystal Airlines Routes strategy changes Ø I had fare sales from Q 4 -Q 6 for new markets, brought sales in for one quarter and ate into profits so I eliminated them Ø Towards the end I went to 2 flights per day to keep up with extra demand, expanded again Ø In Quarter 7 I added a resort route and expanded to market E (medium city, industrial park) Quarter 8 Sales Report Market Flights Seats Avail. Seats Sold Passenger Load Fare Sale 2 B 2 36 24 66. 7% Regular fare 3 C 2 38 24 63. 2% Regular fare 4 D 2 38 24 63. 2% Regular fare 5 E 1 19 15 78. 9% Regular fare 12 D 2 38 24 63. 2% Regular fare 17 R 2 92 50 54. 3% One-month fare sale 22 B 2 37 25 67. 6% One-month fare sale 28 F 2 36 21 58. 3% Regular fare 29 R 1 46 26 56. 5% Regular fare

Fleet, Routes, and Corporate Decision Crystal Airlines Corporate strategy changes ØAviation mechanics program: $2500 initially to $5000 by end of game ØAlso donated some money to environmental causes

Fleet, Routes, and Corporate Decision Crystal Airlines Ending strategy Ø Overall: Half luxury, half discount/economy airline, focus on resort and foreign city routes, reliability, cleanliness Ø Fleet: 2 luxury aircraft, 2 economy aircraft, lease the luxury aircraft, fuel on contract Ø Routes: Keep original routes, consolidate added routes to ones with over 60% passenger load Ø Corporate decision: funding for aviation mechanics program at community college

Fleet, Routes, and Corporate Decision Operations Statistics Year-to-Date Crystal Airlines

Fleet, Routes, and Corporate Decision Operations Statistics Year-to-Date Crystal Airlines

Fleet, Routes, and Corporate Decision Operations Statistics Year-to-Date Crystal Airlines

Our Airline vs. The Market Ø Conservative Ø Mostly dealt with stock prices Ø Unrealistic Crystal Airlines

Our Airline vs. The Market Net Income Crystal Airlines

Our Airline vs. The Market Stock Price Crystal Airlines

Our Airline vs. The Market Quality Crystal Airlines

Our Airline vs. The Market Reliability Crystal Airlines

Our Airline vs. The Market Cumulative Net Income Crystal Airlines

Crystal Airlines Takes you anywhere you need to go! THANK YOU Thank you for taking the time to inquire about Crystal Airlines, the airline that takes you anywhere you need to go! If you have any questions, now would be the time to ask Carly, Matt, or CJ. Thank you for the great semester, and good luck with future endeavors you may take on.