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Airnetz Investor Presentation 2009

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Airnetz Investor Presentation 2009

  1. 1. CONFIDENTIAL http://www.netzcapital.com Investor Presentation 2009 -:For US, Europe and South America:- -:For Asia Pacific:- Airnetz Charter Inc. Airnetz Aviation Pvt. Ltd. A Delaware Closed Corporation A India based Private San Francisco Bay area office by Limited company December 2008
  2. 2. CONFIDENTIAL What is Airnetz? Airnetz Aviation Online Marketplace and Virtual Private Airline Global Distribution - Through listing in System for private jet Amadeus, galileo, charter worldwide. kayak and expedia
  3. 3. CONFIDENTIAL Airnetz Charter System Airnetz Charter is an online marketplace and Global distribution system for worldwide private jet, turboprop, helicopter and airliner charter services. Airnetz also has a commercial flight pool service that enables flyers to fly privately at commercial prices. Airnetz platform is used by travel agents / resellers and global aircraft operators. • Delaware Closed Corporation / India based Pvt. Ltd. Company • Started after 1 year of ground work, incorporated in March 2008 • Generated about $1,000,000 (Rs. 5 Crores ) of Turnover since launch • 100% repeat business rate • Over 150 registered travel agents using airnetzcharter.com • Over 180 aircrafts in India network, 1500 aircrafts in global network • Supports over 25,000 airfields globally • Launch Target : To launch in all countries globally by FY’09 • Revenue Target : $1 billion of turnover by March 2010 • IPO Plan : 2010
  4. 4. CONFIDENTIAL Few of our Current and soon To-be Customers Few of Other Partners (Vendors and Booking Partners)
  5. 5. CONFIDENTIAL Turnover/Enquiries/Registered agents Chart Since Launch Turnover Growth $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 March April May June July August Months Charter Enquiries Since Start Registered Booking Partners 800 160 700 140 600 120 500 100 400 80 300 60 200 40 100 20 0 0 March April May June July August March April May June July August Months Months
  6. 6. CONFIDENTIAL Public Relations Airnetz Starts online Charter Booking - Rediff Airnetz starts first Global distribution system for private jets - EconomicTimes
  7. 7. CONFIDENTIAL Content • Team • Market Opportunity • Product & Technology • Business Model • Early Results /Early Entrant • Financing
  8. 8. CONFIDENTIAL Founding Team Co-Founder and CEO Co-Founder and Director Atul Khekade (27) Ritesh Kakkad (31) Flew Business Tourism Firm “Innovation Trip” from 0 to $200,000 Co-founded Indsoft Systems and reached Rs. 40 crores Experience within a year annual turnover Nominated by Businessweek as one of the top entrepreneurs in Asia under 25 Featured in Limca book (2006) records Worked as a Consultant for Citigroup via Featured in BBC as Bright I-flex playing key role in trillion dollar entrepreneur global transaction system. Worked as a consultant for Wells Fargo, Strategy, Business Responsibilities Bank of America via Smartstream Administration, Accounts, technologies in maintaining transaction Finance, Recruitments, HR, processing system. Facilitating Rapid growth Overall Strategy, PR, New Product launch, marketing, facilitating rapid Growth, Exploring overseas business expansion,
  9. 9. CONFIDENTIAL Current Setup • CEO - Atul Khekade • Director – Ritesh Kakkad • 2 People Technology Team • 4 People Customer Service Team • 2 People public Relations Team • Outsourced Legal and Accounts Department • Rented office premises in Mumbai
  10. 10. CONFIDENTIAL Content • Team • Market Opportunity • Product & Technology • Business Model • Early Results /Early Entrant • Financing
  11. 11. CONFIDENTIAL Market Opportunity • Corporate executives travelling by air are increasingly opting for private aircrafts due to time flexibility, higher safety and exclusive feeling – Private aircrafts worth $20 Billion are expected to be delivered worldwide by 2009 – Aircraft charter market has seen over 50% growth in last 2 years • Corporate executives travelling by Business class and Full Service carriers will be able to travel in their own aircrafts at the same price – Very Light jets and Turbo prop aircrafts will be available at an hourly rate of $700 (Rs. 30,000) – Clear-cut existing market for private aircrafts – Global Air Taxi market is worth $15 billion annually – Short distance flights to be replaced by air-taxi • Schedule Airlines are in a consolidation phase globally – Schedule airlines are shutting down their operations, cutting flight schedules and facing huge losses – At the same time order for private aircrafts are surging • Opportunity of Private aviation lies in it’s system due to segmented aircraft ownership – High market entry barrier even for existing schedule airlines
  12. 12. CONFIDENTIAL Market Size • 320,000 General Aviation aircrafts worldwide • 221,000 of these aircrafts are based in USA • General Aviation contributes more than $150 billion to the U.S. Economy and employs more than 1,265,000 people • In the U.S., General Aviation aircraft fly over 27 million hours and carry 166 million passengers annually. • Passengers for Business on general aviation are about 111 million with over 18 million flying hours • There are over 4000 paved general aviation airports open to the public in U.S. Schedule Airlines serve less than 500 airports • U.S has over 17,993 business operators • USA dominates the worldwide general aviation market with 70% of global market size. INDIA GROWTH • 150 General Aviation aircrafts in India • Annual 20,000 hours of flying in 2007 for • Fractional Owners in US are 5168 in 2007 as business purposes compared to 4863 in 2006 • Over 300 airfields in India, schedule airlines fly • Total shipments in 2007 of business jets to only 60 of those airfields increased to 815 at 35% from 2006 year and that for turbo prop increased to 15% at 290 • India has around 45 business operators • Annual flying hours on general aviation in India • Share of Indian General Aviation Market is only growing at 50% 0.1% in the global market. Download : Download : Source : 2008 Briefing General Aviation Industry 2007 General Aviation Statistical Databook
  13. 13. CONFIDENTIAL Market Distribution Private Aircrafts Flying Hours India 150 India 25,000 US 221,000 US 18,000,000 Europe 26,000 Europe 1,800,000 Middle East 1,000 Middle East 100,000 Other 72,000 Other 8,000,000 Total 320,150 Total 27,925,000 General (Private) Aviation Flying Hours - 27,925,000 Flying Hours India -Average price of $1200 per hour US - $33 billion Market for Charter Europe Middle East Arrangement growing at 15-20% Other globally
  14. 14. CONFIDENTIAL Private Aviation Market Private Jet Owners SME preferring Charter on Hourly Rate -Billionaires - Corporate Executives traveling first class, full service carriers or -Very High Net worth Individuals traveling in groups otherwise go for charter available on on-demand basis -Bill Gates, Steve Jobs, Mukesh and Anil Ambani -Segmented aircraft owners making charters available to corporate through charter services divisions or brokers - Brokers don’t Prepaid Jet Hours provide much value and Fractional Owners Operators Brokers -Only Mediators -Manual work - High Net worth Individuals - Billion Dollar Corporate Air Taxi - High Turnover, no loss but not so - Small aircrafts with different specifications for Air Taxi great profit - Aircrafts used :- Single Piston, Multi piston, Turbo Props and Very Light Jets - Fractional Ownership - Over 10 aircrafts - Airfares comparable to full service carrier tickets Company - Delta’s profit making business - No highly profitable operator yet - $14 billion of turnover - Offers their own as - Dayjet has over 50 - Europe’s leading Air -$1 billion of Revenue very light jets for air Taxi Operator well as third party taxi -Acquired by Warren part 135 carrier -Doing well but not Buffet for $850 million -Not profitable profit making aircrafts in 2007
  15. 15. CONFIDENTIAL Various Business Models (Aircraft Ownership) Fractional Ownership On-Demand Charter Operators - Net Jets is the biggest Operator in the world with over ( Air Taxi Operators ) 800 private jets - USA has over 17,993 Charter operators owning not -Net Jets revenues are in excess of $1 billion. more than 3 planes each (recorded count in 2007) -Net Jets was acquired by warren buffet for $750 million -India has only 40 Charter operators owning not more in 1998 than 3 planes each (recorded count in July 2008) -Net Jets keeps its aircrafts positioned in Columbus, OH, -Charter operator firm is registered by an individual Portugal for Europe Operators and Dubai for Middle East who wants to own a jet and also makes it available to and Asia Operations others for on-demand flying whenever he is not using it -Customers buy fractional ownership of NETJETS -US based DAYJET and UK based BLINK got started as aircrafts or block hours sold by NETJETS resellers air taxi operators but are loss making due to high -Customers only have to pay for the time they fly. capital investment and incremental monthly costs Ferrying time is discounted. related to aircraft ownership. -There are over 5158 fractional aircraft owners in USA. -On-demand Charter operators rely on charter (Last recorded count in 2007) brokerage firms to get them customers. -Charter brokerage firms also sell block flying hours for -Club one air in India with 7 private jets, but highly various Operators, this service is equivalent to block loss making flying hours offered by NETJETS or soon to be started by BJETS in Asia. -BJETS, invested by TATA, starting Indian operations from September-October 2008 None of the Aircraft Operators are profitable
  16. 16. CONFIDENTIAL Various Business Models (Resellers and Brokerage) Block Usage Resellers - Marquis Jets sells block hours on Net Jets Planes -Marquis Jets projected to reach $900 million in 2008, only in 7 years. -Marquis Jets -NAS (National Air Services) sells NETJETS flying hours in Dubai -SHREYANS Motors sells block flying hours in India for NETJETS planes based in Dubai. Charter Brokerage Firms - 100s of Charter Brokerage firms in US - Brokerage is the most profitable part of this business. Brokers get 15-20% commission on arranging a charter -Charter brokerage firms like Halcyon Jets and Blue Star Jets sell prepaid block hours equivalent to marquis jets card offered on NETJETS planes. -Companies like Halcyon Jets and BlueStar Jets are growing at 100% every year -Brokerage firms just arrange the aircrafts
  17. 17. CONFIDENTIAL Charter Management Systems - Avinode and CharterX -They provide Charter management system on subscription basis -Some of the charter brokers use Avinode and Charter X on software as a service model -Existing systems are too complicated for use of customers and travel agents - They do no support amadeus or galileo listings currently. -They are only a software and earn only from subscription charges paid by charter operators or brokerage firms.
  18. 18. CONFIDENTIAL The Need - One Aircraft owner owns one to two aircraft on an average. The number of aircrafts owned can be maximum 10. -A corporate executive needs to travel anywhere globally. -One needs to call 1000s of aircraft owner companies to get a charter arranged for a requirement. -90% of customers interested in charter need to know the approximate quote instantly. -There is no centralized system which can resolve the aircraft availability, arrange the charter and automate the process to make it quickest. Entry Barrier against Airnetz -Airnetz built the world’s first global simplistic and comprehensive Global Distribution System for private jet Industry after background work of over 1 year -Airnetz also built the world’s first commercial flight pool system -Airnetz currently works on level 2 Charterer agreement with Aircraft owners -Airnetz gets client exclusivity -Airnetz gets better rates than the market -Airnetz will start locking the aircrafts only for it’s exclusive use as flying hours increase with the operators, this restricts anyone from entering the field by restricting them access to the pool of available aircrafts
  19. 19. CONFIDENTIAL Revenue distribution in Charter Charter Payment from Customer Aircraft Owner Charter Brokerage Firm 70-80% 20-30% •50% Operating Cost •20-30% Net Revenue •30-50% Overhead Cost •10-15% Operating Cost •0-10% Max Profit •10-15% Max Profit •Mostly Loss Making •Profit Making and growing •Limited business opportunity •Big Business Opportunity, due to limited aircrafts grows with marketing and PR ownership •Nice profit making, market •Loss Making showing continuous growth •Rising ATF, reducing margins •Not much affected by ATF Rise Leading Brokerage Firms •Posting $5 million revenue •Posting $200 million revenue every month every year •Growing at 100% per year •Growing at 50% per year •Halcyon Jets did IPO in 2008, 1 year after it was founded
  20. 20. CONFIDENTIAL The Real Opportunity Problem with Charter brokerage Firms Long term value lies in an automated system •No Long term Asset building •Generating instant quote for customer •Only trading •Exclusive charterer agreement with aircraft owners •No market entry barrier •Easy to use and automates the whole charter brokerage process •Can be used by Channel partners/Travel agents/booking partners •A company called “Charter 101” built a system that has automated the charter broking process •Smart Branson knows real opportunity •Branson doesn’t buy the private aircrafts but acquires company “Charter 101” Branson's Online Charter plane service launches •Branson buys Charter 101(a start-up) for Branson said the new business will court $50 million, retains its Founder and CTO the approximate $30 billion market for booking private air travel by letting •“Charter 101” becomes Virgin Charter operators market availability and allowing customers to bid and book online.
  21. 21. CONFIDENTIAL Content • Team • Market Opportunity • Product & Technology • Business Model • Early Results /Early Entrant • Financing
  22. 22. CONFIDENTIAL A Live Charter using Airnetz System (www.airnetzcharter.com) Booking Partner HRG Sita opens their customized airnetz booking URL
  23. 23. CONFIDENTIAL A Live Charter using Airnetz System Travel Agent generates instant approximate quote for their client, a fortune 500 energy company - Airnetz is the only system that can generate instant approximate quote within a fraction of a second -The quote can be generated for any two airfields in the world for any aircraft for helicopter type
  24. 24. CONFIDENTIAL A Live Charter using Airnetz System Travel Agent confirms charter with departure time, destination and contact details - Airnetz offers the simplest system that even a travel agent can use. -No other system can be used by an average person
  25. 25. CONFIDENTIAL A Live Charter using Airnetz System System suggests that a nearest aircrafts for the requirement are 2 Gulfstream IV based in Delhi System can request quote from the available aircrafts automatically or with a click of a button by a customer service executive
  26. 26. CONFIDENTIAL A Live Charter Using Airnetz System Operator Sends the quote which is automatically marked up and final Invoice is sent to the customer System Generates Invoice and it is sent to the client for confirmation. 5% commission is included for a travel agent and will be paid to them after charter is done.
  27. 27. CONFIDENTIAL Flight Pool.com (Serving a $1 trillion + global market for business executives who want to travel privately. Flight pool offers sharing a charter plane with other business executives for fares as much as a business class ticket Request a Book a Flight View Flight Pool pool Ticket Flight pool From : Mumbai To: Bangalore HAL Request a Pool From : Delhi To: Mumbai (Every Monday morning 5:30 AM) Aircraft : Cessna Citation XL (08 Passengers) From : (Every Monday morning 5:30 AM) Total Charter cost : Rs. 5,00,000* Cost Per Passenger : Rs. 65,000* To : Aircraft : Hawker 800 (08 Passengers) Enroll for this pool Frequency : Weekly/Monthly Total Charter cost : Rs. 6,00,000* From : Bangalore HAL To: Mumbai Day : Cost Per Passenger : Rs. 75,000* (Every Monday morning 7:30 AM) Time : Enroll for this pool Aircraft : Cessna Citation XL (08 Passengers) Total Charter cost : Rs. 5,00,000* Cost Per Passenger : Rs. 65,000* Enroll for this pool
  28. 28. CONFIDENTIAL Competitive Analysis Registered Aircraft Companies 100 50 Aircrafts in network 1500 in USA Over 700 worldwide Geographical Existence USA Supports 25,000 airfields worldwide with all aircraft types Reseller/Affiliate System Yes Yes Time to know approximate Quote Till Operator bids Instant Registered Travel Agents 400 150 Flight Pool No Yes Time to Arrange Charter More than 6 hours 3 Hours Usability Complex Simple Drawback - Operator has to keep bidding for 1000s of requests everyday without surety of charter booking Irrelevant addition information to Valuation Bought up be filledfor $50 million $20 million
  29. 29. CONFIDENTIAL Content • Team • Market Opportunity • Product & Technology • Business Model • Early Results/Early Entrant • Financing
  30. 30. CONFIDENTIAL Business Model Charter Payment from Customer Airnetz Automated Charter Brokerage and arrangement 20% Net Revenue Booking Partner Travel Agent Broker 5% Net Revenue 5% Net Revenue 5% Net Revenue Aircraft Owners Airnetz Automated Online Charter •Online Quote Generation Affiliate Exclusivity or Customer •Online Charter Request Agreement Direct •Finding nearest aircraft and final quote •Sales through channel partners/travel agents/booking partners
  31. 31. CONFIDENTIAL Thinking Scale • Marketing – Television & Newspaper advertisements – Email Invitations to travel agents, customers – Customized Affiliate Brochures – SEM: Google Adwords – SEO: Constant SEO work – PR: Every week coverage in leading media • Business Development – API for integration with Amadeus Galileo – Continuous registrations for travel agents/booking partners • Expansion to other countries starting Q4 2008 – Country specific System can be set-up within 1 day – To be launched in USA, UK, Dubai, Asia Pacific – Launching to new country is very easy, we only need to have a master franchise – Immediate revenue generation after launch in new country • M&A – Acquisition of country specific charter company with license for non schedule operations and existing customer base.
  32. 32. CONFIDENTIAL Content • Team • Market Opportunity • Product & Technology • Business Model • Early Results/Early Entrant • Financing
  33. 33. CONFIDENTIAL Turnover of $500,000 in less than 8 months Turnover Growth $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 March April May June July August Months
  34. 34. CONFIDENTIAL Increase in Charter Enquiries every Month Charter Enquiries Since Start 800 700 600 500 400 300 200 100 0 March April May June July August Months
  35. 35. CONFIDENTIAL Increase in affiliate Partners every month Registered Booking Partners 160 140 120 100 80 60 40 20 0 March April May June July August Months
  36. 36. CONFIDENTIAL Key Financials May’08 June’08 July’08 August’08 Metrics Enquires 150 300 450 700 Charters Booked 2 3 3 5 Booking Partners 30 50 100 150 Enquiries Through 40 135 210 430 Partners Financials Turnover $15,000 $30,000 $40,000 $110,000 Net Revenue $3,000 $7,000 $9,200 $18,500 Operating Cost $1,500 $1,700 $1,800 $3,800 Technology Investment $1,500 $5,000 $500 $3000 Net Profit $0 $300 $6,000 $11,000
  37. 37. CONFIDENTIAL Yearly Forecast (Post Funding) FY’02 FY’03 FY’04 Metrics Enquires 100,000 2,000,000 10,000,000 Charters Booked 500 10,000 100,000 Booking Partners 25,000 150,000 300,000 Enquiries Through 95,000 1,900,000 9,800,000 Partners Financials Turnover $5,000,000 $100,000,000 $1,000,000,000 Net Revenue $1,350,000 $25,000,000 $175,000,000 Operating Cost $600,000 $12,500,000 $75,000,000 Profit before tax $750,000 $12,500,000 $100,000,000 IPO Process Begins in 2009
  38. 38. CONFIDENTIAL Content • Team • Market Opportunity • Product & Technology • Business Model • Early Results/Early Entrant • Financing
  39. 39. CONFIDENTIAL Financing • Seed Funded by Founders in November 07 – Founders committed $30,000 • Looking for Series A Capital – – $5 million (Rs. 25 Crores) from VC Funds, Private equity Players • 2009 Goals – Global Customisation and country specific Launch of the system – Building Travel agent base worldwide, 25,000 travel agents by 2008 – Reaching $5 million in Revenues – Launch of Pre-Paid/Block Flying Cards worldwide • 2010 Goals – Scaling Online system to generate $100 MM in revenues – A subsidiary or joint Venture for Fractional Ownership, block usage of Air Taxi, Very light jets, Turbo prop, piston aircrafts – Virtual Business Airline listing on systems like galileo, amadeus to target mass distribution and giving flyers a private flying option when they buy a scheduled airline ticket
  40. 40. CONFIDENTIAL Fund Utilization • 2 Year Establishment & Expansion capital for the following :- • Office - Moving to Bigger Office • Renting office • Recruitment of Key Personnel in Asia/USA – Experienced COO from Aviation Industry – Extended Customer service team – Experienced CTO for enhancing technology – HR, Admin and CFO • Marketing and Sales • Promotional Material • Advertising in select Key Media • Business Development/Overseas Expansion • Identifying Master Franchisee • Training travel agents
  41. 41. CONFIDENTIAL Valuation • Pre-Money Valuation of $20 Million (Rs. 85 Crores) • Why $20 million – A fully built automated system – Featured by over 70 publications globally, already reached audience of about 100 million people – Acquisition of start-up competitor at $50 million – Tried and tested, Generated revenues of $120,000 till date – 100 registered travel agents – A trained travel agency can generate yearly revenues of $100,000 – 100 * $100,000 = $10,000,000 only – $10 MM * 2 years = $20 MM valuation comes from registered travel agents only – Early Entrant – Fastest growing segment in Aviation unaffected by ATF – No other competition than Virgin Charter
  42. 42. CONFIDENTIAL Exit Strategy • Yearly Profit Draw – clear-cut Strong revenue Model • Reverse Merger • IPO in FY03-FY04 • Acquisition from an Airline – $1 billon+ exit
  43. 43. CONFIDENTIAL Interested? Contact us info at airnetz.com India Phone : +91 9930403019 US Phone : +1 608 554 0461 Airnetz Aviation Pvt. Ltd. F-220, International Infotech park, New Mumbai. India.