V.I.P.

Very Important Passengers

Brief presentation
About the business niche
This is a brief presentation of
Tango plan to operate (mainly)
in South America serving
special interest groups of
travelers, operating charter
flights.

This business is focused in a
niche where none or few other
operators are competing.

In fact, there are:

Traditional (and low cost)
airlines serving regular
routes

Business and first class
services in these same
companies, and

Executive charters and air
taxi companies serving
small groups of travelers,

Then the offer is as follows:












A little research shows that
there are some groups looking
both for a flexible schedule
and at least business
class comfort:




And a reality check confirms
they are willing to pay for that
kind of service.













High spending players
traveling to casinos in the
region

Soccer and other sports
teams

Government and
executives delegations
Traditional airline Charter company Executive charter
Comfort
Limited to the few
1st & business
class seats
Same plane, same
problem
Even fewer "good"
seats, but they are
ALL good
Cost $$$ $$ $$$$
Schedule
Passenger
accomodates to
airline schedule
Schedule
accomodates to
passengers needs
Same as charter
Number of seats
10 20 80 40 100 200+
F
a
r
e

$
$$
$$$
Not profitable
Traditional
Commercial
Flights and low
Cost airlines
First class
In traditional
Commercial airlines
Executive
charters
Still there is room in the skies

Tango will go in this phase for the
VIP passengers market in a niche
that is presently not served neither
by traditional airlines nor by the
small executive charters in the
region.

New 5 stars hotels and casinos in
the region have generated an
incoming flow of VIP passengers
creating this demand for comfort
and luxury for charters of 40 60
pax.

Potential clients
All the mentioned potential
clients have already been
contacted and have confirmed
their intention to make
business with Tango.

Some have provided
projections.




















For Conrad also Chile has to
be considered, now the hotel
& casino is property of a
chilean group.

Basic research and contacts
have been performed in
Uruguay, but there have been
also high level contacts in
Argentina as well, with AFA
(national soccer association)
and their interest is also high.

Uruguayan government has
the need for this kind of
service for their international
flights, as also confirmed by
their interest during the initial
contacts.






















Thus, this is a first approach
to the potential market.

Further contacts in the region
(Brazil, Argentina, Paraguay,
Chile) would show other
interest groups to offer Tango
VIP services.
Clients have already confirmed interest

The 2 most important hotels/casinos
in Punta del Este (the VIP
destination for casino players, plus
the rich people in the region) have
already confirmed their interest in
these charters.

Also, the Uruguayan Soccer
Association (AUF), Tenfield (TV
group of Paco Casals group, the
main soccer players manager), the
Uruguayan government for their
official representations and
commercial missions, have
confirmed in advance their interest,
too.

Soccer is not only about teams in 2014





























In 2014 the FIFA World
Championship will be held in
Brazil, comprising several
cities in this vast country.

This implies a lot of people
who is going to attend the
matches of their national
teams.

Among this people there also
is the high spending profile
group that is Tangos focus.

Such and opportunity cannot
be lost.
And do not forget 2014

2014 is the year where Brazil is to
host the FIFA WORLD CUP, within a
continent whose inhabitants are big
soccer fans. People from Argentina,
Chile, Uruguay, Peru, Colombia, and
the rest of the continent will travel to
Brazil to attend the tournament.

And 2016 will have Brazil in the worlds eyes, again
Only 2 years after the FIFAs
World Cup, Rio de Janeiro will
be the city of the Summer
Olympic Games.

Once again, high spending
travelers from all the region
will be attending a great event
in Brazil.























It is estimated that today,
Rio would only be able to
house 52,000 tourists; the
expected number is 1
million. There is a massive
need for housing, and
transportation
development.

(from Seven Pillars Institute for
Global Finance and Ethics report)























That means a need for extra
capacity in all transports,
including flights.

And Tango will be positioned
to offer premium service to the
special interest groups of
athlets, teams, and visitors to
the games.
nor 2016

And in 2016 Rio de Janeiro will be
the host city for the Summer
Olympic Games, once again
creating a high traffic scenario in the
region, for high spending profile
travelers.

The plane


































These one and another like
this are already set for Tango
needs and currently available.
Our birds for these skies

For this first initial operations Tango
will fly with 2 (two) Boeing 727
airplanes, specially configured for
the VIP passengers its going to
serve.

The B727-200
Among all the options, the
Boeing 727-200 is considered
the more suitable for a startup
in this kind of operation.
























PROs

There is a lot of available
aircrafts of this type, ready
to fly now. That is, no
waiting time for startup.

Lower cost of acquisition
or leasing.

There are trained pilots in
the region and
everywhere.

The plane has the required
flying autonomy for the
considered distances.








CONs

High fuel consumption

But,

this can be bettered by
modifying the structure and
adding winglets, and with
an upgrade in the type of
engines used.

This upgrade (winglets)
has been considered as
the first step in the
evolution of operations.
Estimated cost:
USD 250.000
Time: 3 months to perform
upgrade
The 727s for this operation

The 727 is an old but yet very good
airplane, still in operation worldwide
in many regional airlines.

The fuel cost is its main
disadvantage but in this case, due
to the high fares this market can
afford and is willing to pay, is a
suitable option.

In the other hand, the airplane
purchase cost (leasing item in costs
breakdown) is considerable lower
than newer models, thus making
this a very good option for an entry
to the market.

First estimation

This first projection is based
on potential clients expressed
needs.

Only the main clients and
most firm interested are
considered.

Chile is also an interest for
Conrad, but projections have
not been update because lack
of their estimated traffic and
destinations within this
country.

Even though, in the financial
projections a second scenario,
with a third of block hours
sold is considered, to offer a
more conservative view.
Making the math

Based on the numbers provided by
Mantra and Conrad hotels, plus the
estimation from AUF (soccer teams
participating in international
tournaments), here is a projection of
the operations block hours (flight
and pre take-off and post landing
operations).

BLOCK HOURS :: DETAIL
Hours
round trip
Weekly
round trips
Monthly
round trips
Hours per
month
Conrad (1) Rio de Janeiro 6 1 4 24
Sao Paulo 5 2 8 40
Porto Alegre 3 2 8 24
Curitiba 3 1 4 12
Buenos Aires (2) 1,5 11 44 66
Mantra (3) Rio de Janeiro 6 1 4 24
Sao Paulo 5 1 4 20
Porto Alegre 3 1 4 12
Curitiba 3 1 4 12
Buenos Aires 1,5 1 4 6
Soccer teams (4) 6 0,25 1 6
Government delegations (5) TBD 0 0 0
0 0 0
22,25 89 246
BLOCK HOURS :: SUMMARY
Weekly
round trips
Monthly
round trips
Hours per
month
Conrad 17 68 166
Mantra 5 20 74
Soccer teams 0,25 1 6
Government delegations 0 0 0
22,25 89 246
2 PLANES FLEET
2 PLANES FLEET
(1) Based on their programmed schedule
(2) 1 rt/day from Tuesday to Thursday, 2 rt/day from Friday to Monday
(3) Estimated
(4) 1 charter/week during 2 to 3 months = 12 trips/yr = 1 trip/month
(5) To be determined (TBD)
Calculations
Calculations have been
performed for 2 scenarios.

1) 80 block hours sold

The more conservative

2 crews needed

Less hours flying
increases the weight of
fixed costs in per-hour
cost

Less landings and
navigation fees, more
parking fees to be paid











2) 246 block hours

Based on customers
projections

3 crews needed

Fixed costs are more
diluted in hour cost

Landing-navigation-parking
fees change composition
accordingly

Maximum number of hours
to be served with this fleet

If business is larger than
expected, more planes
should be added


Information has been taken
from public sources and
market research.

Sell price has been checked
with potential customers

Projections

The numbers, based on standard
costs for the 727 plane, and the
projected block hours show this is a
profitable business, even for a more
conservative estimation of block
hours of operation (1/3 of what has
been calculated).

Monthly block hours:
1. COSTS Block hour Monthly Block hour Monthly
Leasing 256 62,977 787 62,977
Fuel 4,187 1,029,905 4,187 334,928
Flight Crew 295 72,533 604 48,355
Cabin Crew 96 23,738 198 15,825
Handling 1,500 369,000 1,500 120,000
Insurance 22 5,486 69 5,486
Catering 1,125 276,750 1,125 90,000
Navigation/Landing/Parking 2,238 550,534 1,172 188,733
Maintenance, provisions and spare parts
Materials 700 172,200 700 56,000
Recurrent 90 22,140 90 7,200
Subtotal 10,509 2,585,263 10,432 929,506
Admin., mktg. & mgmt. 1,051 258,526 1,162 92,951
Flight dispatcher 18 4,396 55 4,396
TOTAL COSTS 11,578 2,848,186 11,649 1,026,853
2. INCOME
Block hours sales 13,950 3,431,700 13,950 1,116,000
3. GROSS PROFIT 2,372 583,514 2,301 89,147
* Amounts in US dollars
246 80
Contact information































Cmte Luis Hernandez
Tango Lineas Aereas CEO

luis_aeropostal@yahoo.ca

Phone: +598 99272002
Summary
There is an attractive market
niche to be exploited.
Clients have expressed their
interest.
Plus: 2 high-traffic generating
events in Brazil: FIFA world cup
+ Olympic Games
Projections show a profitable
business.
If we dont take this opportunity,
someone else will do it.