Airline Investment Proposal

Opportunity Snapshot

Investment Opportunity

The main goal of Aero Majestic Airways Inc. is to provide the services and features of a full-service airline and the comfort of a charter airline at the cost equivalent to a low-cost carrier. Thus the airline will provide its customers with the best value for money.

The project is motivated by the booming tourism industry in the Philippines and the occurrence of investors flocking to Asia. Both effects significantly influence the transportation business in Philippines, primarily the airline business.

Due to recent regulation changes in the Philippines Civil Air Regulations, an airline or air operator cannot perform their own maintenance. Instead, it is required to have an Approved Maintenance Organization to perform the maintenance, the airline or air operator monitoring and performing audit functions only.

Venturing in the aviation business is very timely, considering the aviation industry is in its upslope worldwide.

Aero Majestic Airways Inc. has the following permits and certifications:

• Civil Aeronautics Board Certificate of Public Convenience and Necessity (CPCN) to operate Domestic Non-Scheduled Air Transportation Services.
CAB CASE NO. EP-33027/HED042010-138
Period of Validity – 12 August 2010 to 11 August 2015

• Civil Aviation Authority of Philippines Air Operator Certificate
AOC# 2011044
Period of Validity – 24 August 2011 to 23 August 2013

Authorized Airports:
• All CAAP authorizes airports/airstrips Special Authorizations
• Low Visibility CAT I Operations
• Continuing Airworthiness
• Civil Aviation Authority of Philippines Approved Maintenance Organization
AMO# 100-11
Period of Validity – 28 February 2011 to 28 February 2012

The authorizations give Aero Majestic an advantage - the right to perform air transportation and aircraft maintenance to its aircraft and also to third party aircrafts.

Areas of Operation:

Aero Majestic is operating with an intention to provide convenience to the Filipino and the foreign public by serving the majority of the feeder airports as well as the major airports in the Philippines.

The main operations base is situated at the Zamboanga International Airport, Zamboanga City. The main base is where the hangar and aircraft parking are located, and is also used for maintenance and technical work.

Aero Majestic’s corporate office is located in Paranaque city area which serves as an executive headquarter and finance department of the company. The purpose is to centralize the management operation of the company.

Aero Majestic has a sub-base at Diosdado Macapagal International Airport, Clark and has capability to establish a sub-base at Mactan International Airport.

Currently, the Diosdado Macapagal International Airport sub-base is used as a technical stop for Aero Majestic’s operations in Luzon region.

Market development plan:

The YS-11A 500 series turbo porp aircraft have proven their performance capability over the years. YS-11A has a reputation for the lowest operational cost in its class. Also, one of the main characteristics is that the aircraft has capability of carrying either 64 passengers or 5 tons of cargo, or performing a combi operation with 64 passengers and 2 tons of cargo. This creates a big advantage over other turbo-prop aircrafts utilized by other airlines which have limited load carrying capabilities and higher operations. Also, being the only carrier which can provide large capacity aircrafts to cater for ad-hoc and on demand charter, Aero Majestic has an advantage over its competitors who don’t have the same capacity, including major airlines who cannot perform charter.

The current routes operated by Aero Majestic have no competitors, allowing us to command the fare prices.

Technical aspect:

The airline operations, the flight & ground operations and maintenance operations comprise the primary technical aspect. Flight and ground operations are located at the operation center at Zamboanga main base. The Flight & Ground Operations Department has is responsible for the continuous, convenient and safe operations of Aero Majestic Airways. The maintenance operations are performed on the maintenance base,
which is also located at Zamboanga. The Maintenance Department is responsible for the reliability of the company's aircrafts.


Zamboanga-Pagadian-Cagayan de Oro v.v.
Zamboanga-Dipolog-Cebu v.v.
Cebu-Tagbilaran v.v.
Cebu-Tandag v.v.

Gross revenue:

Route One way Round trip 2 X weekly Monthly
ZAM-PAG Php112,195.20 Php224,390.40 Php448,780.80 Php1,795,123.20
PAG-CGY Php96,887.40 Php193,774.80 Php387,549.60 Php1,550,198.40
ZAM-CGY Php47,657.85 Php95,315.70 Php190,631.40 Php762,525.60
ZAM-DPL Php97,915.98 Php195,831.96 Php391,663.92 Php1,566,655.68
DPL-CEB Php110,056.20 Php220,112.40 Php440,224.80 Php1,760,899.20
ZAM-DPL Php96,194.55 Php192,389.10 Php384,778.20 Php1,539,112.80
ZAM-CEB Php47,657.85 Php95,315.70 Php190,631.40 Php762,525.60
CEB-TAG Php116,845.20 Php233,690.40 Php467,380.80 Php1,869,523.20
ZAM-COT Php112,939.20 Php225,878.40 Php451,756.80 Php1,807,027.20
COT-DVO Php112,195.20 Php224,390.40 Php448,780.80 Php1,795,123.20
ZAM-DVO Php47,657.85 Php95,315.70 Php190,631.40 Php762,525.60
TOTAL Php998,202.48 Php1,996,404.96 Php3,992,809.92 Php15,971,239.68

Aircraft Fuel and Oil
Total Fuel Consumption
Fuel 100800 PHP 58/L Php5,846,400.00
Oil & additives Php80,000.00

Total fuel and oil cost Php5,926,400.00

FOOD Php50,000.00
RENTALS Php80,640.00
UTILITIES Php77,000.00
WATER Php95,000.00
T-OFF&LDG FEES Php105,600.00
OFFICE SUPPLY Php15,000.00
TOTAL Php949,240.00


TOTAL GROSS REVENUE Php15,971,239.68

NET MONTHLY INCOME Php9,095,599.68

We can offer 40% of the monthly profits to the prospective investor as his returns from the investment made in the company. My equity in the company will serve as guarantee for your investment. All investments made by the company are from my personal capital. The company has no loans or liabilities. The current book value of the company is USD 1,030,401.00.

Thank You.

Competitive Advantage

The main players in the domestic market are Cebu Pacific, Air Phill Express and Zest Air.

They operate ATR 72 and Airbus 319/320, Dash8 and Airbus 320, MA60 and Airbus 320.

These airlines concentrate on developed routes and are in no intention to develop new routes. Besides, they cannot compete with the bus fares on these routes as the operational costs are high thus eliminating any profit margin.

The YS-11 considering its low cost of maintenance, crew and fuel consumption gives us an upper hand on the routes we serve and intend to serve. Therefore, we can compete with the bus and still make profit out of the operation.

Rationale for the deal

There is no ther airline operating the routes currently proposed and operated by us. Our main advantage is that we have a large-capacity aircraft which can carry passengers and cargo at the same time or in a standalone configuration of cargo or passengers only.

Due to the airplane characteristics proven over the years, the reliability and cost of operation per hour is the same as operating a 29 seat aircraft, whereas our capacity is 64 seats.

This enables us to pass on the saving as added services to the passengers such as inflight service.

The cost remains the same as operating a low cost no frill airline.

Use of financing

Currently investments are needed to further improve cash flows and provide capital for expansion and upgrade of services.

The capital will be used for the following main reasons
1. Marketing
2. Expansion: opening of new routes
3. Covering operational expenses
4. Improveing the ticket reservation system

Investments can be divided into two installments
1. Before the start of the marketing campaign
2. After the end of the marketing campaign

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