SYNC Airlines (Business Plan)

free essaySYNC Airlines is a newly created company that specializes in airline services. The name is an acronym of the group member’s names. It means that SYNC Airlines have four leaders that aim at promoting this company in the market. This airline has a fair chance of success due to a number of reasons. First, it will bring high-quality service on routes as the airline provides more comfortable and faster handling comparing with other airlines. Second, SYNC Airlines will ensure friendly, cooperative, and professional treatment of customers offering them the most innovative services. Third, the company will implement the latest technology in reservations, sales, ticketing, and marketing. For example, it will provide online reservations, sales, and ticketing to save customers’ time and money.

One of the strengths of SYNC Airlines consists in the fact that it will implement high-level of not electronic technology as well to provide equal treatment and high-quality services for those customers who do not use electronic communication. It means that the company has an individual approach to every client studying their needs and demands. Along with that, the airline company will use cost efficient and up to date aircraft to meet the requirements of the routes and market, and provide satisfaction and comfort to its customers. It is evident that SYNC Airlines’ vision and objectives correspond to its strategy and future priorities. The advantage of the company is that its route structure refers to the Hub and Spoke one. The strength of this kind of structure is that it allows customers departing from any non-hub (spoke) city bound to another spoke in the network. It also allows customers to connect to the destination through the company’s hub. In fact, barriers to entry of new organizations into the airline market are high enough to block them. It means that availability of supply and distribution channels, competitive environment, and regularity policy are the factors that are important for SYNC to enter the market (Bingham, Gomes, and Knowles 10). Buyer power of SYNC Airlines is related to the following aspects: sensitivity to prices, quality, the competitive advantage of rivals, and homogeneous products (See Appendix 2).

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The following reasons justify the creation of this company: the need for more affordable options to fly to the destinations and the need for more options of low coat airlines in the East Coast region that provides high-quality services. In addition, the number of air travelers is increasing every year creating the demand for new airline services. It is evident that SYNC Airlines needs time to become a well-known and reputable company as the number of competitors is large. The mission of SYNC Airlines is to enable people to explore and enjoy the world. The vision of SYNC is to become a leader in world travel and tourism, inspire flight for all, and create the biggest route network in domestic and international markets.

The strategic goals of SYNC Airlines are to become wanted and needed around the world, implement innovative ideas, and find future opportunities. Its corporate strategies include the following: (1) to gain more success and profits in the market; (2) to manage costs to win as many customers as possible; (3) to modify aircraft making it more comfortable (Ferrel and Hartline 17).

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Market Analysis

The target market of SYNC Airlines will consist of the various groups of customers. For example, they can include private and leisure travelers, seasonal or holiday travelers and business travelers who require convenience, high-quality service, reliability, comfort, speed, and reasonable and low fares. To widen their target market, SYNC Airlines should take the following marketing steps: (1) create special tours to distribute promotional items; (2) offer their services to the touristic companies; and (3) diversify their services and adapt them to people of different ages (Bingham, Gomes, and Knowles 88). The route structure consists of short and affordable flights to popular cities in the East Coast region. The proposed route structure will serve the target market as customers can travel faster and more comfortable at short distances.

Personal and leisure travelers, seasonal or holiday travelers and business travelers have been selected as target market as they are the most numerous ones in the current economy. Again, business travelers require speed, reliability, and convenience. Personal and leisure travelers demand a high level of quality, convenience, and service but at a reasonable price. The concerns of seasonal and holiday travelers are destination, convenience, reliability, and cost. In addition, they travel frequently. Thus, SYNC Airlines offers twenty flights per day. It is an enough number of flights for the newly created company to get profits. The company will focus on comfort and quality customer service. At the same time, it will provide the flexible system of reductions to loyal customers. The fare structure of SYNC Airlines will be based on the dynamic pricing system when the price of the tickets is made according to its availability and demand. However, the company offers discounts to their customers. The initial marketing strategy will be related to the promotion that uses printed and internet media along with public relations. SYNC Airlines will sell the tickets in travel agencies, airport counters, Internet, call centers, and the website. Such a variety of options proves that the company has a unique approach to every client. SYNC Airlines aims at capturing a complex market because the airline industry is competitive and the customers need the best quality service at the lowest price.

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The legal, environmental, technological, social, economic, and political factors can influence the company directly and indirectly (See Appendix 1). Consequently, it is a must to drive them in a proper direction.

SWOT Analysis

Strengths

  1. High-quality service on routes
  2. Friendly, cooperative, and professional treatment to customers
  3. Innovation
  4. Individual approach to every passenger
  5. Online reservations, sales, and ticketing
  6. The Hub and Spoke structure of routes
  7. Selling the tickets in travel agencies, airport counters, the Internet, and call centers, and the website.
  8. Choice of destinations

These strengths of SYNC Airlines prove that the company takes care of their clients and tries to adapt its services accordingly. In addition, these strengths will differentiate the company from its competitors.

Weaknesses

  1. Lack of experience in the airline industry
  2. High competitiveness
  3. Lack of the strategic planning

These weaknesses can hinder a new company from developing and growing consistently. Consequently, it should overcome them to avoid the decline stage initially.

Opportunities

  1. Emergence of new markets
  2. Expanding market
  3. Forcing out competitors’ exit
  4. Developing new services
  5. Developing a distribution channel

The opportunities of SYNC Airlines indicate that it has the potential for successful future projects and improvements. The main thing is to strengthen marketing strategies and implement strategic planning.

Threats

  1. Competition in the market
  2. Government regulations
  3. Infrastructure improvement
  4. Losses of costs without gaining profits

The following threats imply that the airline industry is the highly competitive environment that demands constant changes and improvements.

How It Works

Service Description

The services of SYNC Airlines are divided into two main categories: cargo services and passenger services. SYNC Airlines will specialize in the domestic and international destinations and flights. The airline company will use B737-800´s craft because it utilizes only one plane model, which simplifies operations and has an impact on reducing their cost structure. Another reason for using a fleet of B737-800´s is that it is more comfortable for mechanics, support staff and crew to deal with one plane. Consequently, they can optimize their skills and be always able to replace planes and maintain a smaller set of spares. The aircraft B737-800´s has the right size for the airports and routes that the company is going to serve. In addition, it is reliable and efficient as the fuel cost per seat is very low – approximately, 8 cents per seat per nautical mile. However, it is more profitable when the plane has full 189. As a result, it is of crucial importance for SYNC Airlines to win the target market. One should say that the strength of B737-800´s is that it refers to the USA airplane manufacturing industry Boeing.

SYNC Airlines will use 11 aircraft because this number allows it to maintain an efficient flow of passengers through its destinations and hub. Along with that, 11 planes allow having at least one aircraft in reserve for such cases as repairing and training. The main hub of SYNC Airlines will be located on the East coast of the Nation, in Northeast Philadelphia Airport. Its destinations will include Washington, DC, Tampa, FL, Boston, MA, Charlotte, NC, and Albany, NY. These destinations have been chosen because they are well spaced throughout the east coast and accommodated to the routes chosen by the company. This way will be efficient as the company has 11 planes in use. Ten of them are always used, and one is in use for repairing and training. It means that currently, SYNC Airlines has not many planes in operation, but it is a good way not to lose profits and have enough number of passengers. Every hub keeps 1 to 2 planes to provide services on proper routes and follow the schedule of flights. It should be mentioned that the chosen destinations are well-known cities that bring the benefits to the company. The major competitors of SYNC Airlines are Frontier Airlines, Allegiant Air, and Spirit Airlines. They are strong as they have the rich experience in the market, strategic management, innovation processes, and right business strategy. As a result, SYNC Airlines should borrow its marketing and management practices and activities. The competitive advantage of the new company will refer to the following factors: cost and range of fares, safety, destinations, availability of fares and seats, the overall reputation, friendly and competent staff, reliability of baggage handling, ease and efficiency of reservation, and type of aircraft.

Strategy and Implementation Summary

The marketing strategy of SYNC Airlines focuses on winning the domestic market. Consequently, it consists of the following goals: (1) to increase profits leasing the planes instead of buying them; (2) to increase the number of passengers offering the regular passengers discounts or other benefits; (3) to involve more promotional activities (Scott 26). SYNC Airlines intends to widen their target market attracting new customers (individual and corporate), draw the community’s attention (advertisement, public relations), and winning all worldwide markets. Expanding the customer base will lead to the constant financial benefits, incomes, and stability. SYNC Airlines should use the economic growth for motivation, geographical diversity, finding new markets for raising the profits, and globalization.

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For the implementation of this marketing strategy and its goals, it is crucial to have the plan of action. First, it is important to recruit only experienced and qualified staff to avoid the enormous expenses on training and learning processes (Ferrel and Hartline 20). However, it does not mean that SYNC Airlines should omit this aspect totally. Implementation of innovative technologies is significant as they will move the company forward.

Currently, the task of SYNC Airlines is to craft the image and awareness through distinctiveness and consistency in the service provision. The company should focus on generating revenue from delivering quality service and producing good referrals. SYNC Airlines intends to be active in establishing relations with its clients keeping abreast of their wants and needs. In addition, the company is going to focus on improving public relations, Internet promotion, and TV and radio advertisement.

As the first marketing goal is to increase profits through leasing the planes instead of buying them, the airline needs to find the companies that lease planes and establishing partnership with them. One can do this via Internet as most companies have websites. Without a doubt, it will take time and efforts to the find the reliable and reputable partner. Along with that, leasing is less costly than buying, and SYNC Airlines can save money. The marketing goal of the company is to increase the number of passengers offering regular reductions or other benefits. However, the discounts should not exceed 1-2%. It is evident that SYNC Airlines need two-three months to implement this marketing goal as the profits depend on the number of passengers.

As the marketing goal is to involve more promotional activities, SYNC Airlines can increase the profits by 15%. Consequently, the company should participate in the community events suggesting sponsorship help to attract more customers and polish its image and reputation. The indirect promotional activity is the best way to involve passengers, and it is the most relevant option considering the current position of this organization (Scott 30). As a result, SYNC Airlines can increase the number of clients to 10%.

Management Summary

Management team and leadership are crucial aspects for the company to achieve success as they determine the development of strengths and future opportunities. It is essential for them to be democratic and tolerant. The key management team objectives are the following: (1) to increase the occupancy and maximize return; (2) to better the services’ quality, insure passengers’ satisfaction and loyalty, and provide them with memorable experience; (3) to establish the training and learning for all employees; (4) to invest in and improve the airlines facilities and ameliorate the company’s image; (5) to ensure the company’s sustainability.

The management team and leadership of SYNC Airlines should be responsible for taking ethical decisions and creating the corporate culture that will prevent frauds and other violations. The management should avoid implementing autocratic style of leadership as it results to inequality and barriers between the leaders and the staff. The employees of SYNC Airlines should comprise an integrated team and not distance themselves from the leadership. This condition must be fulfilled to enhance the company’s success and reputation. Employees responsible for any fraud, manipulation, and deception in the organization should be punished. Employees should also inform the management about any fraudulent activities. However, they should be sure that revealing such information would not cost them their jobs.

Managers are responsible for the promotion, encouraging, and motivation of employees. Those employees who will misconduct and violate the principles of corporate culture should be dismissed immediately. The principles of mutual business ethics between the company, suppliers, and customers should be cooperation, support, mutual help, focus on offering high-quality services, caring about the customers, and respect. The success of SYNC Airlines heavily depends on leadership that must be democratic and exemplary to become reputable and profitable.

Management staff controls the activities and operations of the company. The analysis of profits and revenues is necessary to assess whether the goals are achieved or not achieved. If the results are positive, there will be no need to make changes. If the results are negative, managers should adopt a change in the management process. For substantive growth, SYNC Airlines can apply such alternative strategies as horizontal and vertical integration, related and unrelated diversification. Horizontal integration presupposes merging with competitors for increasing the market share (Bingham, Gomes, and Knowles 88). It is a good opportunity for the newly created company. Vertical integration presupposes linking with another company that has the same supply chain (Bingham, Gomes, and Knowles 88). It is also the option for SYNC Airlines.

It is recommended to pursue the acquisitions and partnerships as these processes help to find new passengers. Acquisition presupposes involving new practices. The partnership is a way of establishing good relations with competitors. The keys to success of SYNC Airlines are the following: (1) employing a highly professional and experienced management team; (2) using aggressive, progressive, and intelligent marketing; (3) identification of served and under-served routes; (4) use of all-jet fleet; (5) use of advanced information and electronic technology (Bingham, Gomes, and Knowles 88).

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Financial Analysis

For the startup of SYNC Airlines, it is necessary to estimate the sum of cash. It will include leasing and purchasing of planes, having a sufficient cash reserve, marketing, advertisement, and public relations, costs associated with recruitment and training, reserve to cover the overall operating costs, administrative, and legal costs. One can divide start up expenses in the following way: legal and consulting ($200, 000), route and market study ($100, 000), office supplies, stationery ($10, 000), brochures and marketing materials ($30, 000), design consultants ($60, 000), corporate insurance ($20, 000), office rent ($50, 000), crew, staff training and manuals ($60, 000), public relations and advertising ($80, 000), expensed vehicles ($100, 000), and expensed equipment ($100, 000). The breakdown of this required capital can also include software and system development, and the costs for other needs.

The aircraft costs will include legal consulting, route and market study, corporate insurance, buying and leasing of planes. The personnel costs will consist of the expenses on recruiting, training, and consulting. The administrative costs refer to office rent, corporate insurance, and design consultants. In addition, SYNC should have the costs for the investment. The investments can be planned and private. The required funding includes non-cash assets, cash requirements, additional cash, and cash balance.

Conclusion

One should say that developing a comprehensive business plan is of crucial importance for SYNC Airlines as it is the way to build the further activities and start the operation in a proper way. The main thing is to determine the company’s mission, marketing strategy, and goals that will be the basement for other steps. The market analysis is a must to find the target customers and create the policy that will distinguish SYNC Airlines from its competitors. SWOT-Analysis is necessary to determine the company’s strengths, weaknesses, opportunities, and threats. SWOT-Analysis will help to improve marketing of SYNC Airlines. The service description shows that the organization has a clear vision and realizes what it can offer to their passengers. The marketing strategy of SYNC Airlines refers to increasing the number of passengers, offering regular passengers the discounts or other benefits, and involving more promotional activities.

To become successful and profitable, SYNC Airlines should cooperate with other companies, create new services, decrease prices, and increase quality. Presentation of new services will be beneficial as it will involve new customer groups. It is recommended to establish a high level of quality control and go head-to-head with the established carriers.