Bing the 2nd most attractive part for foreign investing in France, Lyon is besides graded 19th among European dynamic metropoliss and the 3rd most popular finish for concern travel. In add-on to its concern activity, the part is besides a major tourer finish, offering a assortment of historical and cultural attractive forces and being the gateway to the Alps, which established itself as one of the most attractive finishs for leisure in Europe.
Lyon is one of the economic human dynamos of European stature and second-largest concern concern capital of France after Paris. The GDP of Lyon is 62A billion euro and the metropolis is the 2nd to Paris in footings of wealth. The Lyon part has a long standing tradition of technological and economic enterprise. Lyon is a major centre for banking every bit good as for pharmaceutical, biotech and chemical industries. Though all industries are represented here but countries in which Lyon holds an international repute are chemicals, technology and fabrics. The metropolis has a turning package industry with peculiar focal point on picture games, and has fostered a turning local start-up sector in recent old ages. Lyon is besides place to the international central office of Interpol, Euronews and the International Agency for Research on Cancer and by some steps, Lyon has been ranked 2nd in France as an economic and convention centre. Lyon was ranked 8th globally and 2nd in France for invention in 2011. It ranked 38th globally in Mercer ‘s 2010 liveability rankings.
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The metropolis of Lyon, known for its historical and architectural landmarks is a UNESCO universe heritage site and is a celebrated tourer finish. Tourism provides a major part towards Lyon ‘s economic system with one billion euros in 2007 and 3.5A million hotel darks in 2006 provided by non-residents. Approximately 60 % of tourers visit Lyon for concern intents, with the remainder for leisure.
Overview of Traffic at UK Airports:
Traffic between London & A ; Lyon Airports
Over the old ages, traffic between London and Lyon has increased on norm but it saw a bead in 2009 because of the planetary economic crisis. However, there has been an increasing tendency over the last two old ages and the concern sector has been a major subscriber towards the rise in traffic.
Graph was taken from ( hypertext transfer protocol: //www.london.gov.uk/sites/default/files/AnewairportforLondon_part1.pdf )
Overview of Traffic at Lyon LYS Aiport:
Traffic to International finishs at LYS has increased significantly over the last 10 old ages. Last twelvemonth, the airdrome welcomed about 83,17671 riders of which 51,57052 histories for international traffic.A International traffic remained the chief driver of growing at the airdrome lifting by 2 % , now doing up 62.2 % of entire rider traffic. This addition in 2011 kept it in 3rd topographic point among Gallic airdromes in footings of riders, after the Paris and Nice airdromes. By the terminal of 2020, the rider capacity of the airdrome will hold reached 10 million.
Existing Players in the Market & amp ; Their Agenda:
British Airways and EasyJet are the two bearers linking Lyon to different Airports of London, With British Airways merely functioning Heathrow with its A319 and A320s and Gatwick and Stansted are served by Easy Jet with A320 ‘s. Easy Jet provides a no Frills service and British Airways, being a Scheduled Airline is supplying full service to this finish. BA runs three flights daily from Heathrow and same on the other side of the leg with 2 to 3 more flights on weekends. EasyJet connects Lyon more than BA day-to-day. EasyJet has selected Lyon as its base in France which shows its importance as a gateway to the Rhone Alps. Armed with the cognition that at this minute there are no Gallic bearers runing on this path, an chance to capitalise on this path has arisen and the possibility of capturing the market has become plausible. Keeping client satisfaction in position by supplying enhanced service and offering better agendas will vouch success for LumieAir.
Easy JET
Frequency
DEP
ARR
Frequency
DEP
ARR
MTWTF
LYS
7:10
LGW
7:40
MTWTF
LGW
8:15
LYS
11:00
MTWTF*S
LYS
16:30
STN
17:10
MTWTF*S
STN
13:15
LYS
16:00
****F**
LYS
16:55
LGW
17:25
****F**
LGW
13:40
LYS
16:25
MTWTF
LYS
17:05
LGW
17:35
***T***
LGW
13:50
LYS
16:35
******S*
LYS
10:35
LGW
11:05
MTW****
LGW
13:55
LYS
16:40
******S*
LYS
15:15
STN
15:55
******S*
LGW
7:25
LYS
10:05
*******S
LYS
7:25
LGW
7:55
******S*
STN
12:00
LYS
14:45
A
A
A
A
A
*******S
LGW
8:25
LYS
11:10
A
Frequency
DEP
ARR
Frequency
DEP
ARR
British Air passages
MTWTFSS
LYS
8:15
LHR
9:05
MTWTFSS
LHR
8:40
LYS
11:15
MTWTFSS
LYS
11:55
LHR
12:35
M**T***
LHR
15:55
LYS
18:35
MTWTFSS
LYS
19:20
LHR
19:55
*TW*FSS
LHR
16:00
LYS
18:35
A
A
A
A
A
MTWT*SS
LHR
20:40
LYS
23:15
A
A
A
A
****F**
LHR
21:00
LYS
23:35
Predominating Fare in the Market:
Menu construction
If booked 4 hebdomad in front & A ; remaining a hebdomad off
If booked 2 yearss in front & A ; doing a twenty-four hours unit of ammunition trip
A
Economy
Business
Economy
Business
British Air passages
? 130
? 430
? 580
? 700
EasyJet
? 80
N/A
? 280
N/A
With EasyJet offering a “ no frills attached service ” it therefore has the lowest menu at 70 lbs, but being a low cost bearer which charges for supernumeraries, one has to pay for luggage allowance, place choice, onboard bites and repasts. British Airways has a menu of 130 lbs featuring place choice, luggage allowance and a complimentary on board bite. As shown below, menus of 130 lbs for BA and 80 lbs for U2 are the lowest for both bearers. Changes and refunds to these menus are non permitted or may be permitted upon payment of a punishment fee with a possible addition in menu. In the flexible menu class, BA is bear downing 580 lbs and Easyjet 280 lbs. BA ‘s flexible menu offers alterations and refunds with no punishment fees. Since EasyJet is a no frill bearer that charges for supernumeraries, its flexible menu offers limitless day of the month alterations with other supernumeraries such a Baggage allowance and speedy embarkation.
2. Choice of Airport
2.1. London
Where?
London City Aiprot ( LCY ) :
London City Aiprot ( LCY )
Runway
1500m 4900ft
PAX served ( 2011 )
3million
Capacity by 2030
8 million
PAX growing rate
8 %
Aircraft Motions ( 2011 )
68792
Terminal Facilties
17 Check In desks
Per Hour
38
No of Gatess
15
Time to the metropolis
15-20 proceedingss
No of finishs served
40
Number of bearers functioning LCY
13
For London we have chosen London City Aiprot ( LCY ) for this path. LCY is one of taking concern airdrome of United land holding connexions to 30 finishs across UK, Europe and USA and supply connectivity to the remainder of the universe through the major European hubs. The local connectivity of the airdrome to Canary Wharf and metropolis of London makes LCY a cost and clip effectual installation for riders particularly concern travellers. The airdrome has all the standard stores and mercantile establishments including a grants such as “ Eat ” and Caffe Nero for early forenoon shootings of caffeine. LCY can be reached by Docklands Light Railway direct from metropolis in a 15-20 proceedingss of clip. Due to the propinquity to London Docklands and the fiscal territory its chief users are concern travellers but those going for leisure are increasing significantly. LCY has been a driving force for concern productiveness for users across London, peculiarly the major fiscal and concern corporations of City of London and Canary Wharf, by supplying rapid, efficient and convienient entree to a broad scope of European concern metropoliss and now to New York.
Why LCY:
LCY has ever been the preferable pick for a concern traveller because of its minimum check-in clip. Business traffic makes a greater proportion of the entire traffic for LCY at 60 % of the entire traffic sing Lyon is for concern so holding chosen LCY for this path is portion of a scheme to capture the greater part of the market portion. Since rivals are based in other airdromes in London, acquiring a head-start with LCY would guarantee rule over the market since there are no flights from LCY at this point in clip.
2.2 Lyon:
LYS
Lyon-Saint Exupery Airport ( LYS )
Runway
4000m 13124ft
PAX served ( 2011 )
8,437,141
Capacity of the airdrome
9 m
PAX growing rate
6 %
Aircraft Motions ( 2011 )
117979
Number of Terminals
3
Per Hour
A
No of Gatess
16 gateway
Time to the metropolis
20 kilometer
No of finishs served
91
Number of bearers functioning LYS
40
Lyon has two airdromes Lyon-Saint Exupery Airport ( LYS ) and Lyon Bron Aiport. Our base for this path will be LYS. LYS is more popular with riders and air hoses in footings of supplying connexions to many European and international finishs. The airdrome lies inA Colombier-Saugnieu, 20A kilometer east southeastA of Lyon metropolis Centre and has twoA runwaysA . It is an of import connexion to the entireA Rhone-AlpesA part. It is easy connected to the Centre of Lyon and other towns in the country includingA ChamberyA andA Grenoble via manager links. TGV ( high velocity train ) A provides the airdrome entree to Paris, French Alps and the South of France. The train station isA linked to the airdrome by a paseo. The airdrome served 8,437,141 riders in 2011, doing it France ‘s 4th busiest airdrome afterA Charles de Gaulle, NiceA and OrlyA airdromes. 2011, has been a record twelvemonth for Lyon airdrome with international traffic lifting by 4.5 % and domestic traffic by 10.3 % .
Why LYS:
LYS ‘s propinquity to the metropolis centre, its big capacity and the decreased costs of being based in LYS due to take down parking fee and airdrome charges are some of the many grounds for this choice. Establishing the base in Lyon would assist in accomplishing the optimized agenda which would be otherwise hard. LYS ‘ ability to provide big aircrafts like B747 and A380 makes it an obvious pick for many carriers.It provides easy connexions to other parts of France.
3. Traffic Prognosis:
Traffic between London and Lyon showed an increasing tendency over the old ages but dropped in 2009-2010 due to the switching economic state of affairs around the universe. In 2011 traffic saw an addition in the recovery of the economic convulsion. This was non the instance with EasyJet, which operates from LGW to LYS. Easyjet ‘s rider Numberss have increased over the old ages and even in periods of economic crisis.Traffic at Stansted for this path has been stable over the old ages. Easy jet is the merely bearer runing to the LYS from Stansted where there was no important alteration in the traffic after the lessening in 2008. Based on the increasing tendency for months in 2011 we estimated that traffic prognosiss are as follow.
Number of riders at each of the London airdromes
A
A
A
A
A
A
prognosis
prognosis
A
2007
2008
2009
2010
2011
2012
2013
LHR
246425
239511
218612
197404
216368
227732
239096
LGW
1302
3256
158947
163712
180457
191212
201967
STN
130615
133026
96965
95967
95827
95507
95187
Aircraft Choice:
LYS-LCY-LYS is a short draw path so here a narrow organic structure jet would be the optimum pick. LumieAr will utilize a Embraer E170 for its first twelvemonth of operations. The Embraer E-Jet household is a series of narrow-body, medium-range, twin-engine jet airliners produced by a Brazilian aerospace pudding stone. The cost-efficient usage of the latest engineerings makes the EMBRAER 170 the most efficient aircraft available in the 70 to 80 place section. The first-class fuel burn, best structural efficiency, and outstanding aircraft maintainability features provide significant cost advantages to many air hoses. The planned constellation of the aircraft would be 1-2 in Business and 2-2 in Economy and Economy Gold categories of travel with a sum of 70 seats.
Embraer-170 Seating layout with 70 seats
Embraer-170 Specifications
Flight Deck Crew
2
Passengers
70 ( 2-class,36 in/32 in )
Engine Power ( each )
20000 / 22000 lbf
Speed
890 kilometers per hour ( 481 kn )
Empty Weight
21,140A kilogram ( 46,600A pound
Max Takeoff Weight
35,990A kilogram ( 79,300A pound )
Max Payload Weight
9,100A kgA ( 20,062 pound )
Length
29.90 m ( 98 ft 1in )
Height
9.67 m ( 32 ft 4 in )
A new cabin construct: The Embraer 170 features a double-bubble fuselage which gives our riders an extraordinary sum of personal infinite. The broad seats and wider aisles in this aircraft class attention deficit disorder to passenger comfort and satisfaction. Four-abreast seating eliminates the demand for a in-between place, easing entree and doing embarkation and deboarding drum sander and faster.
We are renting one Embraer on a ACMI footing for the first twelvemonth of our operations with a program to replace the aircraft with a new Bombardier CS100 which is under production and will be available by 2014.
In comparing to the cabins of other narrow organic structure aircraft in service, the CSeries will supply bearers with the highest overhead bin volume per rider and a even wider aisle that would let for the most efficient embarkation and debarkation of riders every bit good as lower seat-mile cost and lower care costs associated.CS series is cheapest of the options of the same strain such as A319, A320 and B737.
5. Market kineticss:
Distribution Scheme
The scheme in head here is a blend of different distribution channels chiefly through utilizing travel agents with website engagements moving as the drive force. Initially the bearer has to bear comparatively higher costs for distribution by GDS but for a start up bearer utilizing GDS is important for market incursion. The web interface will be designed to be multifunctional and user friendly at the same clip so that riders are able to able to book their tickets online with added easiness. Once the bearer will set up its place in the market the trust on GDS would decrease in approaching old ages. As a portion of the selling program an aggressive market scheme would be adopted with the primary focal point on corporate trades while constructing up contacts with large concerns and consumers through the use of societal media and viral media.
Merchandise Features:
Operating as a full cost bearer, we will unify certain characteristics that our rivals are offering in both economic system and concern categories which is shown in the tabular array below with a comparing of the other two bearers in the market. To come in into the market with a new angle, LumieAir is establishing a new merchandise called “ Economy Gold ” along with the traditional Economy and Business categories. By going in the Economy Gold cabin, our riders will bask extra infinite and superior comfort at a monetary value suited to to the demands of the bulk of short draw riders. Economy Gold will capture the market of concern travellers who were downgraded to economic system category due to the economic influence on their companies. What the riders will have is 4 ” of excess legroom, 50 per centum more seat recline. Standard in flight wireless and complementary cervix pillows for that supernumerary added comfort.A Economy Gold riders can debark quicker after set downing because their place will be located at the forepart of the standard Economy Class. The introductory monetary value to sit in the economic system gold will be 25-30 lbs each manner on top of the menu.
Economy Class Merchandise
Business Class Product
The Brand:
LumieAir draws its name from the celebrated visible radiation festival ‘Fete diethylstilbestrols Lumieres ‘ in Lyon metropolis which occurs every 8th December and stopping points for four yearss, giving Lyon the rubric of Capital of Lights. We have a program to use for “ LA ” as a two missive ICAO codification.
Flight Agenda
An optimum flight agenda is important for any bearer, LumieAir ‘s agenda is designed in such a manner thatA it attractsA a wider section of the marketA and by supplying efficient yet convenient agenda for Passengers LumieAir is aiming the the upper terminal of client satisfaction degree. Since 60 % of the traffic to Lyon are concern riders so three day-to-day flights are scheduled, five yearss a hebdomad from Monday to Friday on each side of the path. On both sides of the leg one day-to-day flight early in the forenoon is scheduled to provide the demands ofA concern travelersA going early morning.Flight scheduled A at around 10:40 am A fro LCY is suitedA forA concern traveller winging for a tiffin meeting etcA where as theA Last flights of the twenty-four hours are scheduled at 7 autopsy from LCY and 8 autopsy from LYS for those concern travellers who want to return to their hometown after a twenty-four hours trip or a meeting. At the same clip this agenda turns out to be A existent convenienceA for leisure riders as this part of the market is flexible with the timings of the flights but largely do non utilize early forenoon battles so still have good pick of 2 day-to-day flights on each side of the legA i.eA one in the afternoon and one in the eventide. For weekends 2 flights on Sabbatums are scheduled on each side of the leg, at 9:30 am and 10:30 am, as a traveller does non prefer to wing early on weekends and is largely suited for riders winging to pass their weekends.
LumieAir
Frequency
DEP
ARR
DEP
ARR
MTWTF
LYS
6:30
LCY
6:55
LCY
7:35
LYS
10:00
MTWTF
LYS
10:40
LCY
11:05
LCY
14:30
LYS
16:55
MTWTF
LYS
19:00
LCY
19:25
LCY
20:05
LYS
22:30
A
A
A
A
A
A
A
A
A
******S*
LYS
10:00
LCY
10:25
LCY
11:05
LYS
13:00
*******S
LYS
11:00
LCY
11:25
LCY
12:05
LYS
14:30
*******S
LYS
17:30
LCY
17:55
LCY
18:35
LYS
21:00
Costss:
For the intent of ciphering costs of LumieAir ‘s operations, a bearer of about similar concern theoretical account holding short draw aircraft in its fleet is selected. In this instance BMI has been selected to deduce. Costss of BMI are adjusted consequently to the operations of LumieAir to obtain an appraisal of the entire operating cost for the start up bearer.
Cost Per Seat Km for BMI
Entire Operating Cost = 946570
Entire Available Seat Km = 12237770
Cost per Seat Km = 946570 / 12237770 = 0.077 or 7.7 pence
Estimated Operationg Cost for LumieAIR
ASK: seats x flights x 1km ( 724km ) = 70x 936= 65520 and entire ASK: 47436480
Entire estimated operating costs: Cost per place kilometer x ( ASK x phase length ) or ten entire ASK = ?0.077 x 47436480=3652608.96
Cost per flight= 3902.36
Cost per place at 100 % Load Factor = ?3902.36 / 70 seats = ?55.7
Cost per place at 65 Load factor= ?55.7/ Load Factor 0.65= ?85.7
Market Share
LumieAir capacity and Market Share
LumieAir will run 2 unit of ammunition trips per twenty-four hours all the weekdays and one unit of ammunition trip per twenty-four hours on the weekends.
3 trips A- 5 yearss a hebdomad A- 52 hebdomads + 2 trips A- 2days a hebdomad A- 52 hebdomads + 1trip per hebdomad x 52 hebdomads =936 trips per twelvemonth
Aircraft seats = 70
Annual Capacity = Aircraft seats ( 70 ) A- Annual Trips ( 936 ) = 65520 riders
Annual Capacity presuming 65 % Load factor= 42588
Possible Market portion will be calculated with the estimated traffic for 2012 and our air hose ‘s capacity:
( 42588 / 536250 ) riders = 7.94 % possible market
A market portion of 8 % is a realistic premise for a start up bearer which accounts for about 18218 of the entire estimated traffic for 2012. Another step for market portion can be used based on the Lumie Air ‘s capacity. Harmonizing to this step part of the market portion Lumie Air estimates to steal would be about 7 % calculated as:
Menu:
Fare construction of LumieAir
Booking 4 hebdomad in front & A ; remaining a hebdomad
Booking 2 yearss in front & A ; doing twenty-four hours trip
A
Economy
Economy Gold
Business
Economy
Economy Gold
Business
LumieAir
? 125.00
180
? 440.00
? 560.00
? 650.00
? 680.00
It is ever approximately inexpensive monetary value when it comes to a pick between options. Supplying lowest menu in the market for the best service will steal the client base from bing carreirs in the market. For Economy Gold on the top of menu of Economy individual can acquire excess leg room and recline by paying excess 50-60 lbs for a return ticket. We will offer the 60 % of the seats in Economy and Economy Gold at lower monetary value, that you get if you book at least 4 hebdomads before the flight and the remainder 40 % at the higher monetary value. For concern category 30 % of the seats are offered at lower monetary value and 70 % of the seats at a higher price.The impression behind making this cleavage is to hold a maximal profitableness. LumieAir is utilizing Alcarte pricing theoretical account to maximise its net incomes and tabular array below shows per centum of seats allocated for high and lower terminal menu classs.
A
Menu
% of seats
Menu
% of seats
Business
440
30 %
680
70 %
Economy
125
60 %
560
40 %
Economy Gold
180
60 %
650
40 %
Gross
30 % of 6 seats= 1.8 seats x 65 Load Factor=1.2 seats at ?440
?528
70 % of 6 seats= 4.2 seats x 0.65 Load Factor=2.73 seats at ?680
?1856.4
60 % of 48 seats= 28.8 seats x 0.65 Load Factor=18.72 seats at ?125
?2340
40 % of 48 seats= 19.2 seats x 0.65 Load Factor=12.48 seats at ?580
?7238.4
60 % of 16 seats= 9.6 seats x 0.65 Load Factor=6.24 seats at ?180
?1123.2
40 % of 16 seats= 6.4 seats x 0.65 Load Factor=4.16 seats at ?650
?2704
Gross per unit of ammunition trip
?15790
Entire gross 468 unit of ammunition trips x Revenue per trip ( 15790 )
?7389720
Projected Net incomes for the 1st Year of Operationss:
Entire gross 468 unit of ammunition trips x Revenue per trip ( 16224.3 )
?7592972
Entire cost
?3652608.96
Entire net income
?3737111
Net income per trip
?3992.63
Based on above mentioned Calculations presuming a 65 % of Load Factor LumieAir is projecting a net income of 4201263.68 for the first twelvemonth of operations which is a nice sum for a start up bearer.
Critical Analysis
Serving LCY would be one of our major advantages, Its market portion has sat at zeroA withA no bearers runing the LCY-LYS path at present. Therefore market potency of this airdrome has non been explored toA its best. LumieAirA canA penetrateA intoA the maeket by supplying efficientA yetA convenient agenda to capture the market with a Short draw Embarer 170 on a ACMI footing therefore avoiding higher fixed investing costs. The bing service is non providingA the rightA value for money, for case U2 offers the lowest menus in the market but clients end up paying a higher sum when he has to pay for luggage, nutrient etc.Their A selling run named ” Business sense non Business category ” is misdirecting as U2 chargesA people for complimentary services that the leagacy bearers offer in their economic system category. LumieAir A will supply clear distinction in the scope of menus and merchandises accociated therewith. By supplying a new merchandise such as Economy Gold in the market LumieAir is non merely giving the consumer an added pick at the same clip increasing air hose ‘s revenue-generationA capableness. Having leased the aircraft so for the 1stA one-fourth of operations we will see how this new merchandise is perceivedA by riders as a litmus trial and configure our new order of Bombardier CS100 consequently. This merchandise has already been launched by many US and European bearer on long and short flights such as, Delta, United and Airfrance-KLM and already received a good response from consumers.
Establishing this merchandise on the LCY-LYS path would be a wise scheme where most of the traffic comprises of concern riders. So Assuming a 65 % burden factor, we are projecting our grosss. Experimenting with a new merchandise “ Economy Gold ” is non a high hazard, as if the merchandise fails for whatever ground still we are non worse away because it involved a minimul amount of investing.
Referrences:
