See if franchising is right for you.

 Eurosky – Company

4.1 Legal Setup

In order to satisfy all operational requirements and to enable customers to purchase a depreciable interest, a sophisticated company structure has been designed in compliance with the German tax law. This company structure is a major asset of Eurosky and has been developed with leading partners at Arthur Andersen.

Eurosky Group consists of three separate companies headed by Eurosky LLC (see Exhibit 7 on the facing page). The first aircraft is owned by the First Aircraft LLP. There will be a separate LLP for each new aircraft (Second Aircraft LLP etc.). The general partner in the Aircraft LLP will be Eurosky LLC. It is therefore assured that Eurosky LLC maintains full management control of the aircraft company after the capital interest is sold to Eurosky’s customers. The initial limited partner in the Aircraft LLP will be a trustee. When selling the first interest, the trustee will retreat from the Aircraft LLP. Upon foundation, Eurosky LLC will hold a 100% capital interest in the Aircraft LLP.

In order to comply with German law, it is necessary that a single entity holds the title to the aircraft. The customer therefore buys a capital interest in the Aircraft LLP from Eurosky LLC, which will at the same time reduce its capital interest. The deprecation volume generated by the aircraft will be beneficiary to Eurosky’s customers, creating a tax shield.

Eurosky Management LLC will have the mandate to operate the aircraft. The legal separation of the company that owns the aircraft and the company operating the aircraft is necessary to ensure the deductibility of the aircraft’s depreciation under German tax laws. In addition, this setup will separate operating risk from financing risk.

After ten years, the aircraft is fully depreciated. It will then be sold back to Eurosky LLC at fair market value. The Aircraft LLP will be fully divested and the proceeds will be returned to the owners. Again, this necessary to ensure tax deductibility of the depreciation. Eurosky will then offer an interest in a new aircraft company to the customer. This contract renewal will create new depreciation volume for the customer.

4.2 Distinctive Competencies & Business Process

Eurosky’s core competencies are network organization and sales of aircraft interests. Eurosky’s ability to access prospective customers and place shares in the market is based on its superior market research capabilities. This results in a focused sales effort and an exceptionally high success rate, which competitors will not be able to replicate quickly. Non-core components of Eurosky’s Fractional Ownership Program are supplied by the network partners. Key partners are Raytheon Aircraft Company, the manufacturer of the Beechcraft King Air B200, and Augusta Air, a licensed aircraft operator.

Eurosky will thus derive a sustainable competitive advantage from its ability to organize a network of essential partners. Eurosky will cover the sales function, which is the most essential component of the network. The sales competency is backed by the superior access to prospects, which is proprietary to Eurosky. Through establishing a brand name, performing effective quality assurance and striving for a continuous improvement process, competitors will be unable to copy Eurosky’s success.

Eurosky’s business process includes three activities. First, the Sales function encompasses market research and the sales process leading to the successful sale of shares. Second, the Contract Management function includes the completion, maintenance and termination of the legal contract with the customers. The third activity is Operations. This function will take customer flight orders and schedule aircraft in close cooperation with the aircraft operator. Customers can contact Eurosky by telephone, fax or e-mail to arrange for flights. In addition, billing and monthly statements of activity will be prepared for share owners.

4.3 Management & Company Organization

The management team of Eurosky Group is comprised of its four founders, Michael Beckmann, Oliver Betz, Andreas Gerber and Christophe Rabut (see resumes in Appendix 8.2).

Michael has extensive knowledge of the business aviation industry. He has worked with both a major business aircraft operator (Aeroleasing Group of Geneva/Switzerland) and one of the top three business aircraft manufacturers (Raytheon Aircraft Company of Wichita, KS). Through his work, he has established significant industry contacts. Oliver has special experience in finance, legal and taxation issues from his work at Goldman, Sachs & Co. Andreas has worked on the launch of the Mercedes E-class in France in his internship with Mercedes-Benz France, Paris. Christophe has built up his marketing and sales expertise through his work at the Gillette Group in Boston, MA, where he has conducted competitor and customer analyses, and with Deutsche Aerospace AG in Paris, where he has prepared an important aviation trade show.

Based on the backgrounds of the founder team, functional responsibilities have been derived. Michael will be responsible for operations. Andreas and Christophe will focus on marketing, sales and public relations. Oliver will be responsible for finance, tax and legal aspects, encompassing all aspects of contract management.

Eurosky LLC will act as the holding company for Eurosky Management LLC and the Aircraft LLPs. All four founders will manage Eurosky Group as equal partners. Each founder will take a position as depicted in the organizational chart (Exhibit 8) on the facing page.

Oliver will hold the position of President and CEO of Eurosky LLC. He will also be VP of Tax, Legal and Finance. Michael will be the VP of Operations in Eurosky LLC and the Managing Director of Eurosky Management LLC. Andreas will act as VP of Marketing for Eurosky LLC and also be the Managing Director of First Aircraft LLP. Christophe will be the VP of Sales in Eurosky LLC and also the Managing Director of Second Aircraft LLP.

Management compensation is based on an incentive system. The compensation per executive is comprised of a base salary of 80,000 DM ($47,000) p.a. plus a bonus. The bonus per executive is 2.5% of the net income generated by Eurosky LLC in the respective year, payable in January of the following year. This will generate a projected income in year 5 of 211,000 DM ($124,000) for each of the founders.

A key element of the team will be the Board of Advisors that comprises representatives from Eurosky’s partners and further individuals chosen because of their valuable experience in areas critical to the company’s success. The board has five distinctive members and will provide Eurosky with in-depth knowledge of the aircraft industry, operations and financing (see Appendix 8.3 for details on the board members). In conjunction with the expertise of the Board of Advisors and other external advisors (see Appendix 8.4 for an overview of key advisors), the management team will be able to bring all necessary skills and commitment to Eurosky to ensure the ongoing success of the company.

Table of Contents Appendices
1. Executive Summary
2. Market Analysis
3. Products
4. Company
5. Marketing and Sales
6. Operations
7. Financials
Pro-forma Financials
Resumes of the Founder Team
Board of Advisors
Key Advisors
The information and ideas herein are the confidential,
proprietary, sole, and exclusive property of Eurosky’s founders.

Get help with writing a business plan or choosing a franchise.

Talk to a Consultant

Services of Interest

9 + 11 =