BUSINESS PLAN FOR GUART AIRLINE
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BUSINESS PLAN
FOR
GUART AIRLINE
TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................................................ 1
PURPOSE OF THE BUSINESS PLAN ................................................................................................................................... 1
MARKET PROBLEM....................................................................................................................................................... 1
MARKET OPPORTUNITY ................................................................................................................................................. 1
SOLUTION.................................................................................................................................................................. 1
SERVICE TO BE PROVIDED ............................................................................................................................................. 1
BUSINESS MODEL ........................................................................................................................................................ 1
MANAGEMENT TEAM ..................................................................................................................................................... 1
FINANCIAL REQUIREMENTS ............................................................................................................................................. 1
MARKETING AND SALES STRATEGY ................................................................................................................................... 2
COMPETITION ............................................................................................................................................................. 2
EXIT STRATEGY ........................................................................................................................................................... 2
BUSINESS DESCRIPTION ........................................................................................................................................ 3
NAME ....................................................................................................................................................................... 3
LOCATION .................................................................................................................................................................. 3
NATURE OF BUSINESS................................................................................................................................................... 3
VISION...................................................................................................................................................................... 3
MISSION ................................................................................................................................................................... 3
AIMS ........................................................................................................................................................................ 3
CORE VALUES ............................................................................................................................................................. 3
KEY TO SUCCESS ........................................................................................................................................................ 4
BUSINESS OWNERSHIP .................................................................................................................................................. 4
CURRENT STATUS ........................................................................................................................................................ 5
LEGAL FORM .............................................................................................................................................................. 5
COMPANY GUIDELINES FOR EMPLOYEES ............................................................................................................................. 5
CORPORATE SOCIAL RESPONSIBILITY................................................................................................................................ 5
COMPANY OBJECTIVES .................................................................................................................................................. 6
SERVICE DESCRIPTION .......................................................................................................................................... 7
MARKET NEEDS OF GUART AIR’S SERVICES ........................................................................................................................ 7
SERVICE PORTFOLIO .................................................................................................................................................... 7
SERVICE BENEFITS ....................................................................................................................................................... 8
PRICING.................................................................................................................................................................... 8
LEGAL RIGHTS ............................................................................................................................................................ 8
KEY STRATEGIES ......................................................................................................................................................... 9
COMPETITIVE COMPARISON ............................................................................................................................................ 9
AIRCRAFT TYPE AND SELECTION .................................................................................................................................... 10
ECONOMIC EVALUATION ............................................................................................................................................... 10
OPERATIONAL EVALUATION ........................................................................................................................................... 10
TECHNICAL CHARACTERISTICS....................................................................................................................................... 10
TARGET MARKET ANALYSIS................................................................................................................................... 12
NIGERIAN TARGET MARKET FOR AIR TRANSPORT BUSINESS .................................................................................................. 12
MARKET OUTLOOK FOR THE AIR TRANSPORT INDUSTRY ...................................................................................................... 12
MARKET NEED OF TARGET MARKET................................................................................................................................ 13
COMPETITOR ANALYSIS ........................................................................................................................................ 14
ARIK AIR................................................................................................................................................................. 14
MED-VIEW AIRLINE PLC .............................................................................................................................................. 15
ALLIED AIR .............................................................................................................................................................. 15
AIR PEACE............................................................................................................................................................... 15
MAX AIR LIMITED ...................................................................................................................................................... 16
INDIRECT COMPETITION .............................................................................................................................................. 16
GUART AIR’S COMPETITIVE ADVANTAGE ........................................................................................................................... 16
CORPORATE STRATEGY FOR COMPETITION ....................................................................................................................... 16
INDUSTRY ANALYSIS ............................................................................................................................................ 17
GLOBAL AVIATION INDUSTRY OUTLOOK............................................................................................................................ 17
AIR TRANSPORT INDUSTRY IN NIGERIA ............................................................................................................................ 17
TOTAL PASSENGER TRAFFIC ......................................................................................................................................... 18
i
DOMESTIC PASSENGER TRAFFIC .................................................................................................................................... 19
INTERNATIONAL PASSENGER TRAFFIC .............................................................................................................................. 20
TOTAL AIRCRAFT MOVEMENT ........................................................................................................................................ 21
DOMESTIC AIRCRAFT MOVEMENT ................................................................................................................................... 22
INTERNATIONAL AIRCRAFT MOVEMENT ............................................................................................................................. 22
CARGO MOVEMENT BY AIRPORT .................................................................................................................................... 22
CHALLENGES IN THE NIGERIAN AIR TRANSPORT INDUSTRY ................................................................................................... 23
MARKETING STRATEGY......................................................................................................................................... 24
POSITIONING ............................................................................................................................................................ 24
PRICING AND PRICE ELASTICITY .................................................................................................................................... 24
REVENUE MANAGEMENT ............................................................................................................................................... 25
SALES AND DISTRIBUTION ........................................................................................................................................... 26
BUSINESS MODEL ................................................................................................................................................ 27
CUSTOMER SEGMENTS ................................................................................................................................................ 27
VALUE PROPOSITION .................................................................................................................................................. 27
CHANNELS OF CUSTOMER COMMUNICATION ...................................................................................................................... 27
CUSTOMER RELATIONS ................................................................................................................................................ 27
REVENUE STREAMS .................................................................................................................................................... 27
KEY RESOURCES ....................................................................................................................................................... 28
KEY ACTIVITIES ......................................................................................................................................................... 28
KEY PARTNERSHIP ..................................................................................................................................................... 28
COST STRUCTURE ...................................................................................................................................................... 28
OPERATING PLAN ................................................................................................................................................ 29
HUMAN RESOURCE PLAN ...................................................................................................................................... 31
BOARD OF DIRECTORS ............................................................................................................................................... 31
MANAGEMENT TEAM ................................................................................................................................................... 31
STAFFING PLAN ......................................................................................................................................................... 34
SWOT ANALYSIS .................................................................................................................................................. 38
STRENGTHS ............................................................................................................................................................. 38
WEAKNESSES............................................................................................................................................................ 38
OPPORTUNITIES ........................................................................................................................................................ 38
THREATS ................................................................................................................................................................. 39
RISK ANALYSIS .................................................................................................................................................... 40
MARKET RISK OF LOW PASSENGER PATRONAGE ................................................................................................................ 40
CREDIT RISK OF REFUND ............................................................................................................................................ 40
COMPLIANCE RISK ..................................................................................................................................................... 40
LIQUIDITY RISK ........................................................................................................................................................ 40
FINANCIAL RISK ........................................................................................................................................................ 40
OPERATIONAL RISK.................................................................................................................................................... 40
REPUTATIONAL RISK .................................................................................................................................................. 41
INVESTOR RISK ......................................................................................................................................................... 41
COMPETITOR RISK..................................................................................................................................................... 41
THIRD PARTY RISK OR KEY SUPPLIER RISK..................................................................................................................... 41
CYBER RISK AND RISK OF CLAIM PAYMENT ..................................................................................................................... 41
PESTLE ANALYSIS ................................................................................................................................................ 42
POLITICAL FACTORS ................................................................................................................................................... 42
ECONOMIC FACTORS................................................................................................................................................... 42
SOCIAL FACTORS ....................................................................................................................................................... 43
TECHNOLOGICAL FACTORS ........................................................................................................................................... 44
LEGAL FACTORS ........................................................................................................................................................ 44
GUIDELINES AND REQUIREMENTS FOR GRANT OF AIR TRANSPORT LICENSE [ATL] ..................................................................... 44
ENVIRONMENTAL FACTORS ........................................................................................................................................... 44
SOCIO-ECONOMIC IMPACT .................................................................................................................................... 45
LEGAL REQUIREMENTS ......................................................................................................................................... 46
BUSINESS LICENSE .................................................................................................................................................... 46
NIGERIAN CIVIL AVIATION AUTHORITY ............................................................................................................................. 46
ii
RENEWAL OF REGISTRATION ......................................................................................................................................... 46
REQUIREMENTS ......................................................................................................................................................... 47
SECURITY CLEARANCE................................................................................................................................................. 47
HOME OR OPERATIONAL BASE OF GUART ........................................................................................................................ 47
VALIDITY OF LICENCE ................................................................................................................................................. 47
ANNUAL UTILIZATION FEE............................................................................................................................................. 47
OTHER REQUIREMENTS ............................................................................................................................................... 48
INSURANCE .............................................................................................................................................................. 48
FINANCIAL PROVISION ................................................................................................................................................. 48
STRATEGIC PLAN ................................................................................................................................................. 50
FINANCIAL PROJECTIONS ..................................................................................................................................... 52
UNDERLYING ASSUMPTIONS .......................................................................................................................................... 52
KEY PERFORMANCE INDICATORS .................................................................................................................................... 53
REVENUE PROJECTIONS ............................................................................................................................................... 53
PROFIT AND LOSS PROJECTIONS.................................................................................................................................... 53
CASH FLOW PROJECTIONS ........................................................................................................................................... 54
BALANCE SHEET PROJECTIONS ...................................................................................................................................... 54
OTHERS WORKINGS ................................................................................................................................................... 55
EQUITY SCHEDULE ..................................................................................................................................................... 56
DEPRECIATION BUDGET............................................................................................................................................... 56
LIABILITIES SCHEDULE ................................................................................................................................................ 57
iii
EXECUTIVE SUMMARY
Purpose Of The Business Plan
This document is prepared to serve as a guide map for the operations of Guart Air, a cargo and passenger air carrier to
be based in Nigeria for its operations.
Market Problem
In Nigeria there exist massive transport infrastructure which is relatively well-developed, however, the overtime state of
neglect has made them somewhat unreliable, driving on the decaying road networks require one to know its way around
as well as exercise caution. Public transportation means have left much to be desired. The slow speed of trains and the
poor quality of service have impeded railway transportation from indeed taking off. The other existing transport means
also leave much to be desired by the populace. Commuters and individuals importing and transporting cargo continually
face challenges in their daily activities.
Market Opportunity
Given the size of Nigeria and the poor road system condition, flying would be a much-preferred means of transportation
for intercity travel. The opportunity arises for the aviation industry to take advantage of this existing problem and
capitalise on it. This new airline should base its business and marketing strategies on achieving high, and profitable,
load factors through absorption of unmet demand regarding quality and service. This will ensure continued patronage
of services be it cargo or passenger transport.
Solution
Guart Airlines limited is a company that seeks to provide air transportation for passengers and cargo operations. The
current state of air travel service demands for a higher-quality passenger and cargo service which Guart Air aims to offer
at a low cost. Reliability and efficiency are the pillars with which its operations will be guided. It has will identified vital
routes and establish a schedule of flights to best serve the needs of airlines, couriers and specialist businesses. With
experienced staff and warehousing facilities operating on a 24/7 basis, it seeks to offer efficient and cost-effective
handling of cargo, the company’s staff are trained to provide services to Exporters and Importers alike.
Service To Be Provided
Guart Air seeks to provide scheduled/chartered on-demand air transportation for passengers and cargo operations
throughout Nigeria and across the world. This will help improve the transportation infrastructure within the country and
serve as an available means for providing the safest and most secure air transport services for individuals and its cargo
than that offered by other competitors.
Business Model
Revenue would be generated from the sale of airfares for cargo and passenger services. The fares will be pegged at
affordable prices which they can afford without reducing the profit margin of the company too low to incur losses.
Passengers and clients will book flights to the various destinations Guart offers through contact with the company’s
agents or front desk office.
Management Team
To ensure the success of this new carrier the company will require an active organisational and management team. The
management team will help reduce the risks and ensure the success of the new air carrier. This team will be comprised
of qualified individuals with the necessary experience in the aviation industry as well as the personal characteristics that
would ensure an efficient and collaborative working environment for the success of the company. A breakdown of the
positions and components of this management team is given later in this document.
Financial Requirements
Guart Air requires funding by way of shareholding capital amounting to ₦148,182,487,000 the equivalent of
$411,526,623.78. This will be used to finance the cost of assembling the aeroplanes required to operate the airline. The
rest of the funds will be expended on acquisition of various Property, Plant and Equipment needed to run the airline
successfully. A summary of the various capital expenditure items is provided below. The details of the funding
requirements are described as equity schedule in chapter 9 of this business plan.
1
Variable Cost
Engines ₦37,256,499
Conversion/Airframe ₦63,528,171
Landing gear ₦15,192,524
APU, Avionic & Others ₦28,422,806
Total ₦144,400,000
Marketing And Sales Strategy
The marketing strategy would be built on Guart's emphasis on the use of the latest information and electronic technology,
stress on comfort, convenience, safety and customer service. The utilisation of modern technology will help reduce costs
and offer better service and greater satisfaction to passengers and cargo. Guart will utilise a combination of methods to
achieve the recognition that it both desires and needs.
An advertising budget will be developed to buy the space and time to get the company's name and message to the
broadest possible group of potential customers or to reinforce old customers to continue patronising its services. These
advertisements would also target specific clients that have the potential to offer corporate or group travel, or who are
potential air-cargo customers.
Competition
There is stiff competition from European, Middle East and the business carriers who continue to dominate air transport
within the African continent. Despite this, Guart Air seeks to overtake this competition through great advertising,
improved air charges, improved infrastructure and delivering quality and reliable services for air passengers and its
cargo.
Exit Strategy
Guart Air intends to go public in times of difficulties. That is selling part of the company to the public in other to raise
enough capital to run the business. Guart Air’s ambition is never to sell the company entirely to a different entity but to
leverage part of it to an interested party's to also own a share or be part of the company.
2
BUSINESS DESCRIPTION
Name
Guart Air is the name of the company seeking to become the most competitive and leading aviation company in Africa
by providing safe, market-driven and customer-focused passenger, Cargo Transport and Executive Charter Services.
Tagline: Superior services at low fares.
Location
The registered office of the company is situated in Ikeja, at 48C, Godslove Street while its principal place of business is
located around the precincts of the Murtala Mohammed International Airport, Ikeja. The company plans to seek a long-
term land lease from the FAAN, to develop its corporate business office, a sizeable maintenance hangar, and a premium
executive lounge for its executive charter.
Nature Of Business
Currently, Guart Air Limited has been involved in the business of providing air cargo transportation services on a dry
lease arrangement to Skypower Express Airways Limited. However, shareholders and directors have made the strategic
decision to reboot the company to provide its primary service of air cargo transport as well as adding passenger transport
services. As demonstrated throughout this business plan, it is clear that a strong growth potential exists for the future,
and Guart will gear itself toward workable growth and stable financial and business planning. Guart Air’s airline has the
potential to become a strong, well-established, and as the numbers indicate, hugely profitable carrier, starting from now.
In reviewing the planned services to be offered by Guart Air, this plan will divide functions into three main categories:
passenger services, cargo services and executive charter services.
Vision
To become Africa's most competitive and leading Airline. This will be done by providing safe, market-driven and
customer-focused passenger and cargo transport.
Mission
To deliver the most efficient, safe, reliable and commercially sustainable world-class cargo and air passenger services
in Africa. Guart Air seeks to provide secure, efficient, low-cost consumer air travel service. The company’s service will
emphasise safety as its highest priority. Guart Air will operate the newest and best-maintained aircraft available. Guart
Air will never skimp on maintenance in any fashion whatsoever. Guart Air will strive to operate its flights on time. Guart
Air will provide friendly and courteous "no-frill" service.
Aims
To become the leading aviation group in Africa by providing safe and secure passenger and cargo air transport at a
better rate than that of its competitors. To contribute positively to the socio-economic development of Nigeria in particular
and the countries to which it operates in general by undertaking its corporate social responsibilities and providing vital
global air connectivity. To ensure being an airline of choice to its customers, employer of choice to its employees.
Core Values
The core values of showing bound Guart Air's operations:
Commitment to Safety
In each decision and each action, every time, every day.
Honesty, Trust and Integrity
In all actions with one another, the company’s suppliers and the customers.
Technical Excellence And Continuous Learning
Guart strives to do it right, and then Guart improves to do it better.
Compliance With Regulatory Standards
In all actions and all decisions, every time, every day
Acting With Purpose And Urgency
Guart makes arrangements to do the right thing and then work on it; Respectful Communication and Constructive
Disagreement; to get to the best result, together.
3Hard Work
Guart strive to do the difficult things that make the company’s airline better than the others
Fun
Guart is confident people who cherish success, learn from mistakes and enjoy the company’s work.
Integrity
Guart practices the highest standards of ethical behaviour in all the company’s work and maintains credibility by ensuring
the company’s actions match the company’s words.
Quality
Guart ensures the customers enjoy the best quality regarding the company’s service delivery.
Innovation
To ensure efficiency, sustainability Guart has adopted cutting-edge technologies which set the company apart from the
company’s competitors.
Safety
With safety as a priority, Guart strives for zero safety incidents through proper training, work practice, risk management
and adherence to safety regulations at all times.
Reliability
Guart is dependable in delivering the company’s mandates.
Key To Success
Management And Culture
Guart Air will hire experienced airline professionals to ensure the operations are well managed. Blending experienced
airline professionals with a young creative management team will be a successful combination which will continuously
look for innovation while maintaining a high level of professionalism. Getting the right combination will be vital in
executing this venture successfully. The company will also focus on building a strong corporate culture that will help to
differentiate itself from the competition and sustain a high level of motivation while maintaining cost control.
Strong Sales team
Guart Air will market its services to companies directly. Its ability to acquire corporate clients will be critical to the success
of the venture. Guart Air will offer discounts for volume travel and will also partner with select hotels to provide all-in
packages.
Superior Service And Service
With an 80-passenger configuration, the cabin of the Boeing 737-3Q4 [SF] will look more like a private jet than like a
giant mass transportation aircraft. Boarding and disembarking will be much faster given the low number of passengers.
Guart Air will reduce the overall travelling time by at least 1 hour and 30 minutes for passengers flying to and from
Nigeria, and the fast-growing Ikeja State area.
Providing a personalised and comfortable experience is key to retaining customers and getting repeat business. A strong
emphasis will be placed on this aspect of the company. Particular attention will be paid to the design of the cabin, the
technology available, efficiency of processes, and quality of service offered by the cabin crew. Guart Air will continuously
innovate and have the ability to introduce new services to market in a shorter timeframe than its competitors.
Low Break-Even Point
By operating the B737-300, Guart Air will have lower operating costs and a low break-even point [40 passengers/50 per
cent load factor] significantly reducing the risks associated with traditional airlines. With such a low break-even point,
Guart Air will be able to make it through economic downturns with less pain than its competitors. It will also enable Guart
Air to consider medium and low-density routes on a long-haul basis offering more point to point services.
The Internet
Maximizing the potential of the Internet will be vital to keeping low distribution and administrative costs. Guart Air will
have an active Internet presence and will use the Internet for customer interaction as well as internal functions.
Business Ownership
Guart Air is 100% owned by African Alliance Company Limited. The company so far has an authorised minimum capital
of N500, 000,000 ordinary shares of N1.00 each and fully subscribed by the three founding Directors. It is also expected
that management stock options will be made available to key management personnel after a minimum of two-year
4operations. The share capital would be raised and principally set aside as the founder's stock to be divided among
essential management personnel.
The company hopes to eventually seek to raise capital to expand and grow its operational fleet and network by carefully
inviting angel and institutional investors through private placement as the business evolves and when the occasion
demands. With a Nigerian policy framework requiring all airlines seeking to engage in scheduled commercial air travel
with an international reach to have a minimum share capital not less than N1,000,000,000.00 [One billion Naira].
Guart Air may need to fuel the future growth and expansion along with the frills of international scheduled passenger
travels. This may culminate in an I.P.O offering to meet statutory capital requirements with the benefits of obtaining long-
term low cost financial while increasing the business equity.
Current Status
Guart began operations in 2009 but ceased in 2011. Since its cessation, shareholders, directors and management have
been making frantic efforts to resuscitate it. Over the period, however, critical parts of the aircraft have been leased out.
The company's principal activity has thus been the provision of air cargo transportation services through a leasing
arrangement. The company's revenues thus have been coming from rental income received or receivable from
Skypower Express Airways Limited.
Legal Form
Guart Air has acquired an Air Transport License from the Nigerian Civil Aviation Authority which allows it to operate as
a domestic passenger and cargo airline company in Nigeria. Guart Air has also acquired the following licenses and
certifications to enable it to work freely in any part of Nigeria. License and certificate from the Federal Inland Revenue
Services and Nigerian Civil Aviation Authority. Noise Certificate, Fuel Venting Certificate and Emission Certificate as
stipulated in Part 16 of the regulation governing the aviation industry in Nigeria.
Company Guidelines for Employees
Employees should be courteous, well behaved, and respectful to all stakeholders of the company, especially the
passengers. Employees must not disclose any confidential information about the company to any external sources
including the press, employees of other companies or family members
Employees should not discriminate between persons based on reasons of race, creed, sex, social status, religion,
nationality, age or physical or mental disability
Employees must comply with all applicable laws and regulations of Guart Air, and perform its tasks with ethics and
responsibility.
All assets, funds, inflows and outflows must be recorded in the books.
Bribes or illegal payments of any sort are strictly prohibited.
Alcohol in any form and usage of drugs, except under medical advice, is prohibited
Employees are expected to maintain a service work environment free from any sorts of harassment and
disruptive activities, which include:
a) Unwelcome remarks or jokes about issues such as race, religion, disability or age.
b) Displaying racist or other offensive pictures or posters.
c) Inappropriate physical contact such as touching, patting, pinching or punching
d) Physical assault
e) Employees should give utmost priority to the cleanliness of work areas.
f) Threats, intimidation and verbal abuse
Corporate Social Responsibility
Guart Air commits to addressing the needs of the society, given its belief that for any economic development to be
meaningful, the benefits from the business must trickle down to the community at large. Guart Air thinks that the
corporate goals must be aligned with the broader societal goals. The following are some of the social responsibilities
that the company looks forward to the undertaking;
Education
Supporting local primary schools that provide training to underprivileged children
Merit-based scholarship programs for disadvantaged students
Community
Employment quota for disabled people
5Sponsoring local activities that benefit the youth of the area
Health
Free eye clinics in remote villages
Blood donation programs in all the divisions
Environment
Environment-friendly engines in all the aircraft ensuring fewer carbon emissions
Reducing and recycling wastes
Minimizing air and noise pollution
Company Objectives
To establish and operate an airline aiming specifically at linking Nigeria with the rest of the world.
To provide service and absorb unmet demand in three key traffic categories: unserved and under-served routes on
which high demand currently exists or can be developed; serving key niche markets where demand is either unmet or
poorly served; and meeting peak traffic demands on specific critical regional, seasonal, and variable routes where very
high load factors can be predicted despite existing, but lower-quality, competition.
To implement an organisational and marketing strategy that will, beginning in the first year of flight operations, achieve
average passenger load factors in the 65-85 per cent range, depending on route and season, and increasing thereafter
to the 75-90 per cent range, thereby maximising revenues and return on investment while minimising risk.
To achieve net operating profits in the 5 per cent range within the first year of flight operations, an annualised return-on-
investment of approximately 50 per cent by the end of the second year of operations, and steady growth enabling rational
expansion of Guart thereafter.
To achieve the projected results starting with four sizeable long-range aircraft.
To gear operations, and present a professional, serious, growth-oriented image from the outset, that will set the stage
for reasoned, planned expansion, mirroring growth rates projected for the first year of operations, and that will enable
Guart to extend its regional scope and, in future years, to transition from its initial regional status into a larger continental
and intercontinental carrier.
As an element critical to achieving Guart’s other key objectives, to identify and develop critical interline alliances,
cooperation's, associations, and partnerships with other more significant, more established, and highly regarded airlines
both within and beyond the target region that will enable the proposed airline to provide an extensive range of
connections, through fares, frequent-flyer mileage sharing, and other passenger and client advantages through interline
arrangements, codeshares, common hubbing, and so forth.
6SERVICE DESCRIPTION
The customers benefit from the company’s unique and integrated platform, with a range of services covering the entire
lifecycle of aircraft, from passenger services to cargo services right through to executive charter services. Consequently,
Guart Air’s strategy is geared to offering its customers the best services.
Guart Air provides services based on sound research and a deep understanding of the aviation industry and specific
types of aircraft. The company’s experts have gained experience through many years in the aviation industry, with
airlines, manufacturers, asset managers and lessors.
Market Needs of Guart Air’s Services
By shrinking the planet, aviation is a principal means of intermingling and integrating disparate economies and cultures,
stimulating social and cultural cross-fertilisation, economic growth and diversity in an increasingly interdependent global
environment.
Trade and tourism are heavily reliant on this most modern means of transportation. Whole economic sectors [e.g., hotels,
automobile rental firms, convention business, and tourist destinations] depend on safe, secure, dependable, efficient
and reasonably priced commercial air transportation.
"Just-in-time" [JIT] inventory has moved to a global scale with the expeditious movement of cargo by air. The economic
ripple effect throughout the industrial and commercial sectors
Despite efforts to diversify trade services, oil and natural gas are still Nigeria's primary exports. As for agricultural
services, Nigeria is a reliable exporter of cocoa, palm oil, livestock and cotton. From the company, Nigeria imports
machinery, chemicals, transport equipment [including the company-made Boeing aircraft] and manufactured goods.
Nigeria’s top trading partner for 2010 was the company, followed by the EU, India, China and Brazil [there is currently
no direct air link between Nigeria and Brazil]
Economic growth and the requirements of redevelopment, not to mention the impending entry of several countries in the
region to the African Union, are creating an increased demand for air services between European Countries and African
Countries of West Africa and for that matter Nigeria.
The market combines a variety of elements all of which demand a higher quality of air service that often currently
available:
a) Business travellers require convenience, reliability, speed, and schedules built around business needs.
b) Government and international organisation travellers, requiring the same elements.
c) Personal and leisure travellers from the Lagos and other parts of the Nigerian states who have the money to
travel by air and who increasingly demand a higher level of service and convenience, but at an economical cost.
Guart Air will appeal to all these distinct groups by offering better quality service [and in some cases, offering service
where none now exists], at a higher level of safety, comfort, and convenience, and at reasonable fares, than currently
available.
Service Portfolio
Passenger Services
Guart Air aims to provide passenger flight services principally to Israel. The focus is to fly Christians who seek to journey
to the holy sites of Israel as part of their religious goals. This is a mirroring of the Muslim pilgrimage to Mecca. The target
is to fly passengers from Africa straight to Israel. These passengers will fly-in from their various African countries to
connect to the Israel-bound flight.
We seek to run two aeroplanes for this purpose particularly from the start and will increase the fleet as per the prevailing
business conditions in the future.
Cargo Services
Cargo is a critical component of today's globalised economy, moving high value, time-dependent and perishable goods
around the world quickly, safely and efficiently. Cargo operations are essential to the overall financial diversification of
airlines and airports. Guart’s is a system of air carriers, third-party terminal developers, forwarders, integrated operators.
We will dedicate two cargo planes for this purpose to commute between Nigeria and Europe as well as Nigeria and Asia.
As the business grows, we will increase our fleet to travel to other destinations like USA and UK.
Service Features
7Online reservations
E-reservations. Moreover, sales [e-sales] that will provide quick and easy access to airline schedules, flight availability,
reservations, and ticketing to a wide range of customers. This eliminates the payment of agency commissions and shall
keep overall costs low, savings that can be passed on to the customer.
Baggage Handling Services
Guart Air will be provided with baggage and handling services to all customers in all the airports.
Electronic Ticketing [e-ticketing]
This will enable passengers to obtain its tickets online and avoid the need to get paper tickets from airline offices, travel
agencies, or at the airport. It also frees Guart from having to stock, track, and issue tickets and maintaining paper trails
of them. Again, more savings for both Guart and the customer.
Electronic Check-In [e-check-in]
This will virtually eliminate waiting in line to check-in fore-ticketed passengers, enabling them to confirm its identities,
obtain its boarding passes, and check-in its baggage [and even purchase tickets upon check-in] utilising a user-friendly
kiosk that eliminates those frustrating last-minute waits to get to the counter.
Moreover, it also dramatically reduces Guart's needs to staff check-in desks, control long lines, employ local contract
ground staff, and expend money and resources on an antiquated system that only adds to the traveller's inconvenience
and frustration. Another win-win situation for both airline and passenger.
Comfortable Economy Class Seats
Seats in this cabin feature seats ranging from 20 inches [51 cm] to 20.9 inches [53 cm] in width. Seat pitch on this cabin
class is 31 – 32 inches [79 – 81 cm] 31– 32 inches.
Customer Service
Guart Air will have special arrangements for the customers who will travel in its airlines. Guart Air will provide paid foods
inside the aircraft and will also provide the meals for free to the company’s privilege cardholders. As the company’s
business is a low cost, so the smallest possible plane fare would be the leading service for the customers.
Customer Loyalty Program
Guart Air will have a credit card option. It will provide benefits such as spending a certain amount of money and getting
a free flight one way. It will be a Visa or MasterCard and therefore accepted at vendors that support those credit card
companies. Also, it will track money spent at Guart Air and provide bonuses such as boarding the vessel before the
other passengers, and free luggage allowances.
Service Benefits
Guart Air offers these benefits to its clients:
a) The use of the Guart Air flight is the fast speed means of transport. Passengers and goods can be transported
easily from one place to the other.
b) Guart Air has great strategic importance. It can be used for internal and external security.
c) It is quite convenient to send expensive, light and perishable goods through Guart Air flight.
d) Guart Air transport is free from physical barriers like the river, mountains and valleys etc.
e) Guart Air transport has often accorded preferential treatment in the form of priority check-in, baggage handling,
reservation waitlist and airport standby, in its push to retain its most valued consumers
Pricing
Guart Air will use a simple yield management system to determine the best price for every single seat in the aircraft.
Guart Air will have a simple fare structure with different fares. Guart Air will monitor the purchasing patterns and will be
able to restrict the amount of discounted fares on specific flights.
Legal Rights
Guart Air intends to spin-off its airline operating company into a separate legal entity under the continued partial
ownership and general oversight of African Alliance, acting as a holding company.
Investments in Guart Air may be made either through African Alliance, as a share of its total capital holdings, or directly
into Guart Air’s operating company.
8Key Strategies
Guart Air will make the low fare model possible and create values through the implementation of the following key
strategies:
Safety First
Partnering with the world’s most renowned maintenance providers and complying with world airline operations.
High Aircraft Utilization
Implementing the state fastest turnaround time at only 25minutes, assuring lower costs and higher productivity.
Low Fare, No Frills
Providing guests with the choice of customising services without compromising on quality and services.
Streamline Operations
Making sure that processes are as simple as possible.
Lean Distribution System
Offering a broad and innovative range of distribution channels to make a booking and travelling more comfortable.
Point to Point Network
Applying the point-to-point network keeps operation simple and lower costs.
Competitive Comparison
In comparing Guart Air to its competitors, there are at least two levels of comparison that must be considered, the usually
lower-standard airlines, both scheduled and charter, flying out of the Lagos State, and the higher-standard, more highly
regarded airlines operating out of Western part of Africa. Beating the former source of competition is both a reasonable
and essential goal.
However, comparing favourably, and even standing notably above, the latter also is a crucial objective since these
airlines will represent direct competition to the new airline on many of its projected vital routes, despite efforts to avoid
such competition to the extent feasible.
Fortunately, several of the essential distinguishing characteristics planned for Guart Air not only will enable it to fare
exceptionally well in both levels of competitive comparison but will be achievable as a saving in cost and resources.
In other words, by being smart, Guart Air can be significantly better than its competition while at the same time accruing
lower overall costs, a remarkably right combination.
With the low-cost carrier, Guart Air has the following competitive advantage over its competitors in the aviation industry
in Nigeria which can be summarised in the diagram below;
Fulfilment
The primary issue of sourcing is the question of the type and source of aircraft to be employed in the new airline's fleet.
Technology
The flight may be based on aerodynamics, but Guart Air will be based on technology and lots of it. Efficiency and
convenience through the use of the most up-to-date informational and electronic technologies, in addition to modern
aviation and navigational techniques, are guiding principles of Guart Air. Technology will also be a cornerstone of Guart
Air's marketing strategy.
Among the technological features Guart Air will offer are:
Internet marketing and online reservations [e-reservations] and sales [e-sales] that will provide quick and easy access
to airline schedules, flight availability, reservations, and ticketing to a wide range of customers worldwide. This eliminates
the payment of agency commissions and keeps costs low - savings that can be passed on to the customer.
Electronic ticketing [e-ticketing] which will enable passengers to obtain its tickets online and avoid the need to get paper
tickets from airline offices, travel agencies, or at the airport. It also frees Guart from having to stock, track, and issue
tickets and maintain paper trails of them. Again, more savings for both Guart and the customer.
Electronic cargo tracking [e-cargo tracking] is the same basic idea as e-baggage tracking and will use the same primary
system, only for tracking cargo and parcels.
Electronic financial control [e-finance] will enable complete electronic financial oversight and monitoring of Guart's
finances, clear advantages.
Additional technological features will be incorporated on-board the aircraft to provide flight crews with the latest
navigational and communication technologies to assure the highest level of passenger safety and also airline reliability
and punctuality.
9Aircraft Type And Selection
At the moment some of the airlines in Nigeria still use very old aeroplanes. Guart knows that to achieve the company’s
goal, Guart needs to operate a cargo plane between 10 to 18 tons and identified the B727, B737-100, B737-200, B737-
300, Airbus A319, Bac1-11-500, B717-200, BC-9-31/-32/-34, AVroRJ100/115, Bac146-300 and MD-87 as possible
aeroplanes which meet the company’s requirements.
Out of these, the Boeing 727, DC-9s, B737-100 and B737-200 are too old for the kind of operations Guart plan. The
desired reliable would, therefore, be compromised. The freighter version of 717-200s is not readily available and can be
very expensive to buy, while the AVroRJ100/115 and Bac-146-300 are not known to be very liable aeroplanes with a
current high cost of maintenance. Guart is therefore left with the Airbus A319 and B737-300.
Economic Evaluation
Guart Air evaluated the economics of its plan carefully considering the following;
The non-recurrent cost which covers the purchase of the aircraft, a contingency stock of spare parts, specialised support
equipment which is often aircraft specifics as well as initial training associated with the introduction of the flying machine.
On-going or cash cost which includes fuel, flight crew, maintenance and fees levied by authorities or airports for the use
of the infrastructure.
The social environment in which Guart Air will be operating in. Considering the other effect of time on revenue, that is
the erosion of passenger appeal, a roomier, quieter cabin aeroplane will attract passengers at will. Guart Air, thinking in
line with its goal, of being the pacesetter of the industry where they lead, and others flow. The fact of this case is people
are tired of flying those rickety and noisy aeroplanes and also people are prepared to pay a little more for this comfort.
The cost of financing. The B737-300 is comparatively cheaper than the Airbus A319 regarding the cost of purchase and
the running cost. There is no ready-made support for Airbus planes in Nigeria, and this Guart sees as a significant
problem in terms of cost of training of flight crew, as well as maintenance support which would be very expensive as
Guart, would require expatriates to work as engineers and flight crew for about a year before passing onto others.
Operational Evaluation
Aircraft Performance/Environmental Issues which include the airports and the ground equipment available, like the
airstairs, terrain including the sea, mountains, the climate, runway length, parking space and slots availability. The B737-
300 which seats up to 126 passengers and 18 tons of cargo is more ideal for Guart's minimum of five years Fleet planning
regarding future expansion.
In summary, Guart Air will operate using Boeing 737-300 aircraft. Boeing 737 aircraft are used by most low-cost airlines
because they are fuel-efficient, moderately sized, and reliable.
Technical Characteristics
Airplane Model 737-300 737-400 A319 MD-83
Engine Type[Quantity] CFM56-3C1 [2] CFM56-3C1[2] CFM56-5 [2] JTBD-219 [2]
Thrust [LB]/Rating method 20,000/SLST 22,000/SLST 22000/SLST 21,000/SLST
Weight [each LB] 4280 4278 4515 4515
Aeroplanes weight [LB]
Maximum Taxi [MTW] 125,000 139,000 142,100 161,000
Maximum Takeoff [MTOW] 124,500 138,500 141,100 160,000
Maximum Landing[MLW] 114,000 121,000 134,500 139,500
Maximum Zero Fuel[MZFW] 105,000 113,000 125,700 122,000
Operating Empty [ORW, Inc. Tare] 72,360 76,180 88,400 85,400
Seats [FC/BC/EC]- Total 126 147 124 144
By Class 8/0/118 10/0/116 8/0/116 12/0/132
Pitch [in] 36/0/31 36/0/32 38/0/32 36/0/32
Performance
Design Range [NM] 1635 1909 1800 2345
Cruise Producer LAC/35K LAC/31/35K LAC/28/35S
Payload [LB]
Passenger + Baggage 25200 29400 28800 28800
Maximum Volumetric 29208 35092 33640 31720
Maximum Structural 32640 36820 38390 36600
Fuel Capacity [THE COMPANY Gallon] 5311 5311 7835 7000
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