266152694-Business-Plan-Cambata-Aviation

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Business plan about cambata aviation
Business Plan
Executive Summary:
Cambata Aviation Private Limited is a private sector leading ground handling agency in India.
Currently CAPL handles more than 30 international passenger airlines, more than 10 cargo airlines
and number of non-scheduled airlines operations across India. Company management would like to
expand the operations of the company in coming two-three years to become pioneer in the ground
handling industry. In order to succeed and become ground handling giant we need to takeover
domestic ground handling market which is growing very rapidly and also attract new international,
private and non-scheduled airlines towards our company. We also need to acquire new equipments
to support our operations and increase productivity.
Following plan will give an idea about how company is going to achieve the said objective. Cambata
Aviation's main strategy is to emphasize the quality of its professional services.
Since CAPL is the existing and well known ground handling agency we have a backup of our expert
management team that is always looks after the development of the company. Based on the size of
our market, our sales projection for the next year will be $4,250,000.
In order to acquire new equipments, complete all the legal formalities and for marketing we will need
around $3,486,000 at start up. Company chairman invested $600,000 and rest we will borrow from
bank as a long term liability.
Introduction:Cambata Aviation Private Limited (CAPL) started offering Ground Handling services in 1967 at
Mumbai International airport. British Airways (formerly known as British Overseas Airways
Corporation) was the first customer airline company of CAPL. In earlier days Cambata use to
provide only ‘Meet and Assist' services to certain airlines that includes wheelchair assistance,
unaccompanied minors assistance, flight crew clearance, CIP handling. Because certain airlines
provide such meet and greet services to their premium customers. Later CAPL started providing
other functions like Check in, Baggage Tracer, Cargo acceptance and unitization, Flight Dispatch,
Weight & Balance, Ramp, Cabin Appearance, and Clearance of Company Stores & Mail.
Cambata Aviation is the member of the International Air Transport Association Ground Handling
Council (IATA-IGHC) and approved ground handling company. At present CAPL is the only
independent and private ground handling agency in India with IATA-JAR-OPS Service Level
Agreement. Currently Cambata handles more than 30 international airline operations across India.
The objective of CAPL is to provide highest standard of services to all the international customer
airlines and to attract new airlines towards company. The services provided at CAPL are world class
keeping in mind the safety and security in operation is the aim, which is the base of aviation industry.
This business plan is about the expansion of the company to start ground handling activities for
domestic airlines, private airlines and non-scheduled airlines as well as to provide new and
innovative value added services required by the international customer airlines and purchase of new
own equipments like Push back tractors, belt loaders, cargo dollies and loaders, Ground Power
Units, Passenger stairs, baggage carts, wheelchair lifts and Ambulift etc. to become pioneer in the
ground handling services in India. The main purpose behind this expansion is to capture whole
domestic market. Since we have certain international airlines that operate twice or thrice a week so
we can utilise our workforce for domestic operations as well. Day by day domestic airline market is
roaring up, in the year 2006-07 there were 3 new airlines that started their operations.
The Market Situation
Currently Aviation industry is one of the fastest growing industries in the world, India is no exception.
Earlier times at airport, airline companies used to employ their own employees but now most of the
airlines ask the ground handling agencies to look after their all flight movements. This is the costeffective basis for airline companies. Mumbai's Chhatrapati Shivaji International Airport (CSIA) is
India's and South Asia's largest and most important hub, handling more than 25million passengers
and 533,593 tonnes of cargo. Between April 2006 and February 2007, CSIA handled 180,000
landings and take-offs and over 20 million passengers with around 6.73 million international
passengers and around 13.65 million domestic passengers. As compared to the year 2005-06
passengers' growth rose to 21.28%. From above statistics we can figure out that domestic sector of
the Indian aviation is also coming up rapidly. Most famous domestic airlines are Jet Airways,
Kingfisher Airlines, Spice Jet, Go Air and Indigo. In case of domestic airlines there are only two
ground handling agencies.
At present in Mumbai there are 5 ground handling agencies namely National Aviation Company of
India Limited (NACIL), Cambata Aviation, Air works India, National Aviation Services (NAS) and
Globe Ground India. Among all Cambata's services is one of the best. This can be proved by the
number of international airlines customers Cambata has. At Mumbai Airport Cambata handles more
than 15 international passenger airlines, more than 6 cargo airlines and quite a few non-scheduled
airline movements as well. Now Cambata will eye on the new entrants at Mumbai airport by
introducing some new services along with ground handling. We can say that, at the time Cambata
has a very good position in the ground handling market in India. It can be seen by following figures:
Mission And Objectives:
Every company has a vision and mission, basically mission means an exercise where all the
employees of the company follows an organisational culture to work together to work towards the
desired results. But I think vision is more important because it helps the company to determine the
future. It serves as concrete foundation to the company.
Cambata Aviation will be the most preferred Ground Handling agency in India. It will be the first
choice handling agency for the international and domestic carriers, which other ground handling
agencies will seek to match.
Cambata Aviation will achieve this pre-eminent position by offering a high quality of service and safe,
reliable and efficient operations on behalf of the airline company.
Cambata will achieve these objectives at the same time ensuring consistent profitability, creating
goodwill, satisfy employees and important of all satisfying customer airlines.
Objectives:
1) To introduce ground handling for domestic, private, cargo and non-scheduled airlines in coming
two years.
2) Acquire new equipments to provide 100% own ground handling support at the airport.
3) Provide better and innovative services to our international customer airlines.
Keys To Success:
1) Thorough and stringent induction training for the employees to help them understand the
responsibilities towards daily activities keeping safety and security as the motto.
2) Improving established practises of the company.
3) Maintain good relations with the customer airlines by providing best services all the time.
Company Summary:
As mentioned above Cambata Aviation is one of the oldest ground handling agency in India. It
started in 1967 at Mumbai. Later operations of the company spreads across India, in 1972 we
started our operations in Delhi and then Chennai, Ahmadabad, and Pune. CAPL looks after different
operations such as passenger handling services like check-in, baggage handling, aircraft cleaning,
security, ramp handling, flight despatch operations, weight and balance etc. Further company is
divided into five departments namely accounts and marketing, Personnel, Passenger handling
services and Human resources, cargo and ramp operations department. Accounts and marketing
department looks after company's income and expenditure, bills receivables, bills payables, salaries
of staff etc. and marketing of our services among new entrants. This department plays an important
role in growth of company by controlling costs and increasing revenues.
Start Up Expenses:
Since our company is well established company we don't require raising money to cover certain
expenses but as we have to complete certain formalities we need some capital. Following chart will
give the description of Start up Expenses.
Marketing Plan:
Cambata Aviation is well established company but now we have to expand our business to provide
ground handling facilities to domestic sector airlines, private airlines in coming two-three years. Also
to expand the current functions we have to acquire new equipments. We need to use different
strategies to expand our business to operate on domestic sector. Important thing is we have to
obtain permission from Airports Authority of India and Bureau of Civil Aviation Security (BCAS) to act
as an authorized ground handling agent.
Currently there are only two ground handling agencies operating at domestic terminal. Our agency is
the oldest one so introducing ground services at domestic terminal would be easy. As like
international operations we can provide service to domestic giants. Our target customers would be
emerging airlines, existing small airlines that lacks in professional skilled workforce, and new
entrants in the international and domestic markets. Basically new airlines lack in skilled workforce,
equipments and they have to invest lot of money in training of employees and acquiring new
equipments. Here we can use our goodwill and offer ground handling services to them. We have
trained workforce with proper experience and knowledge in this sector. We feel that our well trained
employees will generate more goodwill by providing world class services with well maintained
equipments.
Market Segmentation:
1) Unsatisfied Airlines:
We hope to obtain positive response from the airlines like commercial, cargo airlines that are
dissatisfied with their current ground handling agency.
2) New Entrants:
We can target new airlines that just started their operations.
3) Non-scheduled , Private Airlines:
We can target non-scheduled aircrafts and most importantly private airlines. It will be very easy for
them to hire the services for particular time and number of private airlines is on rise which can
provide us a good advantage.
Market Segmentation
Market Needs:
Due to intense competition many airlines started reducing the fare prices and cutting off other
expenses. By handing over the airline operations to ground handling agencies they can cut off some
of their expenses on employees. There are several airlines flying to Mumbai that are not satisfied
with either the quality of the service or the poorly maintained equipments provided by their ground
handling agency. Flights which we handle with our well trained workforce at all levels and well
maintained equipments will confirm their dissatisfaction with our competition and generate new
business for us.
Almost all the airlines whether international or national require high quality of professional services
with well maintained equipments. Because most of the airlines are of turnaround type they depart
back within 2-3 hours after the arrival, in that short time ground staff has to work very hard because
lots of activities needs to be carried out right from aircraft cleaning, catering, refuelling, baggage
loading and unloading etc. Only efficient workers can do these activities fast. Cambata Aviation is
well known for its efficient and world class services and because of that it handles more than 15
international airlines operations at Mumbai. We hope this awareness will generate goodwill for us
and generate better opportunities as well.
In short, demand for ground handling services agencies is increasing. So we should concentrate on
our marketing activities, professional services and try to grab the new contracts.
Market Trends And Market Growth:
The cut throat competition among all the airlines resulted in the global fare cuts. Fare cuts are
affecting airline company's revenues. It can be noticed that other expenses related to food and in
flight service are decreased but ground handling expenses are steady. In order to cut off cost and
raise revenue most of the airlines started outsourcing the major operations to the ground handling
agencies. In short to cut off expenses such as training, acquisition of equipments, salaries of the
staff at airport; airline companies outsource the operations of airline to ground handling agency
which helps to create immense demand for the ground handling agencies. Also most of the airlines
know that efficient ground handling helps to improve aircrafts productivity and generate more
revenues.
Due to such cost cutting measures adopted by most of the airlines, ground handling providers
market is growing day by day. New global ground handling agencies are trying to start their business
in India. In earlier days there were only 3-4 ground handling agencies, and now number increased to
around 10.
Major Competitors:
1) National Aviation Company of India Limited (NACIL):
We can consider NACIL as our main competitor, being a government owned company it gets lot of
benefits. Although their quality of service is not good enough still they handle around 10 international
airlines and 2 domestic airlines. This is mainly because it's a government owned company. NACIL
has all owned equipments so they gain an upper hand as compared to other agencies in the market
segment.
2) National Aviation Services (NAS):
NAS has recently started their operations at Mumbai Airport. NAS has its base in Kuwait. Currently
they are handling 3 international airlines and looking forward to start ground handling at domestic
airport too.
3) Air Works India Limited:
Air Works India is also an old ground handling agency. They mostly look after operations of Private
Charter flights, they are specialised in providing services to private aircrafts. They also have their
own helicopter services.
Strategy And Implementation Summary:
In order to gain good position in the aviation industry CAPL always try and use new strategies. CAPL
always keep their staff updated with the latest technology and equipment knowledge. Cambata is
well known ground handling agency in India, because of its professional and timely services.
Competitive Advantages:
1) Professional Workforce:
We always kept our standards at high level; our staffs undergo rigorous training after every 8
months. CAPL training modules aimed to ensure world class services and achieve the set safety and
security standards in all our operations such as Passenger services, ramp handling, load control,
flight operations, mishandled baggage, aircraft cabin cleaning, cargo documentation. This helps our
company to grow and reach soaring heights.
2) Overall Handling Of An Aircraft Movements:
Though we don't have all owned equipments we provide all the services to an aircraft from the
moment aircraft touches down till airborne. Currently we have four push-back tractors, four ground
power units, and important of all we have our own hanger which we can rent out in case if any
aircraft needs to carry out maintenance activity.
3) Flight Report Control System (FRCS):
Ours is the only ground handling agency that developed FRCS. It was developed with an aim to
keep high level of productivity, vigilance and service standards. FRCS helps both the airline
company and our management to keep an eye on the level of service. FRCS has to be filled up and
acknowledged by customer airline duty manager. Management can use these flight reports in order
to raise the standards of the company.
4) Safety And Security Manuals:
Cambata has developed its own security manuals which we use for our security training sessions.
Our security manual has been approved by Bureau of Civil Aviation Security (BCAS), India. This
enables to reduce the frequency and severity of accidents causing personal injuries and aircraft
ground damage.
SWOT Analysis:
SWOT analysis means analysis of our company's Strengths, Weaknesses, Opportunities and
Threats. SWOT analysis helps to uncover the opportunities which we are looking for. And helps us to
understand the weaknesses by which we can eliminate threats. Strengths and Weaknesses are the
internal factors and opportunities and threats can be considered as external factors. It is a useful tool
which can be use to analyse the position of the company in the market. In case of our company,
following is the SWOT analysis of Cambata Aviation.
Strengths:
1) Strong Brand and Reputation: Cambata Aviation was established in 1967 in Mumbai. It is well
known ground handling agency in India with more than 30 customer airlines across India.
2) Certification: Cambata Aviation is the only independent and private ground handling agency in
India with IATA-JAR-OPS Service Level Agreement. It is a member of IATA Ground Handling Council
(IATA-IGHC) and also an approved ground handling agency.
3) Good Relations: After serving the international giants like British Airways, Qantas, Cathay Pacific,
Alitalia, Air France etc we have very good relations with international airlines and domestic operators
as well like Jet Airways for whom we look after ramp activities.
4) Professional Management And Employees:
We have a team of professional experts in the aviation industry. Also we provide overall training to
our employees in order to keep them updated with latest technological knowledge.
5)Location:
We enjoy the benefit of our location as we have our base in Mumbai the economic capital of India.
Being an economic capital people from different parts of the world visit Mumbai resulting in more
international flight movements in Mumbai and we can use our professional expertise to get the
contract for ground handling of most of the airlines.
Weaknesses:
1) Absence Of International Branch:
We are pioneer in the ground handling services in India. But we are missing the opportunities which
are generating at the ‘hubs' across the world.
2) Government Restrictions:
Being a private company we don't have freedom in certain areas. We have to obtain proper
permission from government authorities in order to start the new activities at different airports.
3) Insufficient Equipments:
We lack in ownership of some equipments, which we need to hire from other ground handlers.
Opportunities:
1) Developing Market:
Aviation industry is growing at very fast pace. Lots of new airlines are coming into the market. We
can grab the opportunities by approaching new entrants in the Indian skies.
2) New Market Segment:
In India domestic aviation and private airlines activities are on rise. Domestic market is also growing
very fast; new airlines are setting up their operations. We can expand our operations or services to
become a giant in ground handling in both international and domestic airlines market. Airlines like Jet
Airways and Kingfisher also looking forward to start international services if we provide ground
handling at domestic level then obviously we can operate as their ground handling agent for
international operations.
3) Ineffective Competitor:
We can attract other airlines that are not happy with their ground handling agent, because of poor
services.
Threats:
1) New Competitor:
National Aviation Services (NAS) Kuwait based ground handling giant has entered in the Indian
market. Because of its global presence airlines may attract towards NAS. NAS operates as a ground
handling agent for some of the airlines in Kuwait.
2) Price Wars:
After the economic downturn many airlines are discontinuing their services to cut the costs. Some of
the competitors like National Aviation Company of India Limited (NACIL) a government owned
agency have cut the cost to attract other airlines. This could be a possible threat.
3) New Government Policy:
As per new government policy only three ground handling agencies can operate at Mumbai airport.
Out of that one is government owned NACIL and other two are undecided. In such circumstances we
can lose our separate entity and forced to merge with other agency.
Project Plan:
We will need period of two years to expand the operations. Also we are planning to purchase new
equipments. We can assume that after two years we can increase our profits by providing ground
handling services to most of the airlines. As our main objective is to capture domestic airlines ground
handling market and increase our market share in international airline ground handling market we
will work hard in coming two years and grab the market share. We are expecting to achieve the said
mission by proper vision in next two years. We have to invest more in our marketing and human
resources for better and fast results.
(Figure showing various activities carried out by Ground Handling Agency)
Sales Forecast:
Sales forecast shows our estimated ground and ramp handling, equipments usage, hangar usage
revenue. We have a very good relationship with airline companies and many of them have
expressed their interest in hiring our services.
Management Summary:
A strong management team is the heart of any business. Cambata is no exception; we have a very
strong management team with wide experience in aviation industry, working to raise the standards of
our company.
Our management policy is to provide better environment to our staff wherein they can be challenged
and stimulated to provide effective and better solutions that meet our customer airlines needs.
Promoters And Directors:
Late Mr. Kershi S. Cambata was the founder of Cambata Aviation. He was holding a Private pilot
license and was ex-Royal Force personnel. He was also a pioneer in Aerial crop spraying business
in India.
Mr. Nelson K. Cambata- He is a trained pilot holding private pilot's license. He acts as a Chairman
and Managing Director of the company. He has specialised experience relating to all aspects of
ground handling and management.
Mr. Sarosh J. Contractor- Mr. Contractor is an Executive Director for Operations. He is a finance
graduate holding 36 years of experience in Banking, Airline and ground handling industry. He is
responsible for the day to day affairs of India operations.
Mr. Burjor N. Nicholson- Mr. Nicholson is also an Executive Director for Finance. He has completed
graduation in accounts and finance field and holds 38 years of experience in aviation industry.
Above mentioned management team is at highest tier. Further tier consists of Airport Manager,
Personnel Manager, and Departmental Managers or head that controls day to day operations at
airport. This entire team is highly experienced and qualified in the aviation industry.
Management Hierarchy:
Personnel Plan:
As Cambata is established company currently we have 3 personnel's at Director's level. Under them
we have 5 Airport's manager. But in future we have to increase the number in order to divide the
work properly.
Our projected Personnel Plan is as follows:
Company's success depends upon its employees. Now we want to expand our company so we will
need more employees. Having professionals at particular place will help the company to form a solid
foundation. Following data summarizes increase in our human resources.
Year wise increase in Human Resources (Projected)
Financial Analysis:
Finance department of the company acts as a watchdog over company expenditure. It makes sure
that all our operational activities are funded. It may be possible for a company to fund all the
activities from operations, but certain times company may need to turn to the capital market for
finance. Company has certain outside sources of money like current debt, bonds, loans etc. For all
these activities we need to raise around $5 million in loans.
As mentioned above we have to expand our services and also to acquire new equipments which will
require huge sums of money. To begin with we have to raise money through loans and some long
term investments. There are certain assumptions on which we have to rely on.
General Assumption:
Break Even Analysis is calculated where total revenue received by a company is equals with the
total cost associated with sales. Our fixed cost consists of rental for our hangar to Airports Authority
of India, equipments routine inspection and maintenance cost, monthly fuel cost.
In order to provide better service we should have our owned equipments. There are number of
equipments available in the market and behind one movement of an aircraft we require almost all
equipments such as tow-bars, push-back tractors, unit load device, ground power unit, baggage
loader, cargo dollies, forklifts etc. These equipments are very diverse in varieties and expensive.
Cambata handles more than 5 airlines at peak time so we require more equipment. It can be seen
that we have to invest huge amount of money in equipments.
Other costs include training activities conducted by our company. We provide training to our
employees after every 8 months with updated topics. In order to get better productivity we have to
invest some amount in training and development of employees.
Revenue:
Following table gives an idea about Revenue generated from Ground handling of single aircraft,
equipments rental and hangar rental:
As mentioned in the above chart, we provide ground handling services to more than 18 airlines; out
of those some airlines operate twice a day daily, some operates just thrice a week. Cambata
operates around 1200 arrivals and departures a year with the help of these equipments generating
millions of revenue. There are some other revenue sources such as equipment rent and hangar rent.
Many a times other ground handling agencies require some of the equipments so they can hire it
from us at above mentioned price same in the case of our hangar.
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