Subject
To create an operating consortium among Millennium Airship Inc. (US
Corporation) and Canadian Affiliated companies in the joint operation of
SkyFreighter Canada ltd. This business venture will encompass the purchase
and/or lease of HVLA airships, the creation and operation of the Depot and
Field Maintenance facilities and activities, freight moving and handling
facilities, and all associated flight operations requirements.
Purpose
SkyFreighter Canada Ltd. is to establish a hybrid heavy lift aircraft
operation in Canada to transport equipment, supplies, personnel, and other
cargo from southern areas of Canada or northern United States to the far
northern areas of Canada. The operation will enable the support of oil
drilling, pipelines, mining, logging, firefighting, and supply and re-supply of
communities throughout Canada.
Legal Status
SkyFreighter Canada Ltd. will be a MAS wholly owned subsidiary formed in
Canada and be operated within the Canadian laws.
SkyFreighter Canada Ltd. will be the joint responsibility of Millennium
Airship Inc. and The Canadian Affiliated Companies, with Millennium Airship
Inc. securing 51% and the Canadian Affiliated Companies 49% of Millennium
Airship Canada Ltd of all voting and management rights.
The SkyFreighter Canada Ltd. Organization Board of Directors will be
responsible for the oversight of this company. This board will have a set
number of directors (TBD), with the majority of the Board members from
MAS. The Chairman of the Board will be from MAS initially; at some time in
the future the Chairman will be elected from the Board of Directors. Each
member will be dedicated to the success of this company and will be
available for biannual scheduled meetings and emergency meeting as called
by the Chairman of the Board. The Board of Directors will be responsible for
appointment of the President, who is responsible for the day-to-day
management of the company.
The President of SkyFreighter Canada Ltd. will be responsible for appointing
the Executive Vice President, with the Board of Directors approval. The
Executive Vice President will be responsible for the appointment of the
Executive Office, Chief Operations Officer, and the heads of each group, with
approval of the President. The annual report to the Partners will include a
copy of the Partnership's Federal Income Tax filing and the following:
Supporting Income Statement, Balance Sheet, Cash Flow Statement, and
Profit and Loss Summary.
Operating Directives
Each organizational group, including the Board of Directors, will originate a
set of operating directives to guide their day to day operations. The directives
will be approved by the director of the particular group. These will be
determined and finalized after we have come to a mutual agreement to in
upcoming meetings.
Sound Profitable Growth
The sky is the limit for potential profit generation for Millennium Airship. As
design turns from paper to product, more and more interest (and orders) will
be generated as MAS prepares for first flight of their production models. Once
the HHLAV has flown and proven its capabilities, the transportation world will
be at Millennium Airship's door step. We must be in position that we fully
control this marketplace by securing at least the first 100 production units of
the HHLAV. The long term planning would be to never allow another company
to enter the market and ensure production orders well into the 21st century.
Profit will be generated in a variety of means. The most obvious is by
movement of freight via the HHLAV. Based on technical information currently
available on range, duration, fuel consumption, lifting capabilities,
maintenance intervals and equipment life cycle, we have conservatively
estimated that once at least ten air ships are in service, gross profits per air
ship would range from ten to fifteen percent. The larger the number of air
vehicles, the larger the base to spread non-value added operational costs.
Note: the single largest driver affecting profits is the price of fuel.
Pricing assumptions: 50 ton lift HHLAV
Average distance of flight - 2000 miles
Average speed of flight - 80 MPH / 70 KH
Average flight time - 6.3 hours
Average cost per ton/mile - $.55 to $.67
Average flight ops time - 60%
Number of flight crews Air vehicle - 3
Another revenue stream will be the removal of waste and/or recyclable
materials from environmentally and remote areas on the return sortie on each
freight delivery flight. An expansion of this revenue stream will be the
manufacture of the containers needed to store and transport this material.
This element will also serve to improve flight characteristics of the HHLAV on
the return leg of each delivery flight (ballast is good for an air vehicle).
Yet another revenue stream would be the creation of an air vehicle leasing
company that would purchase the HHLAV directly from another manufacturer
and lease those ships back to Millennium Airship. This would be a non-trivial
undertaking as the cost of each air ship is currently estimated to be between
fifty and sixty-million dollars. With the estimated initial commitment of 150
air ships, total financing on sixty-billion would need to be secured over a five
year period. Depending on the business model approach, we currently
estimate that this leasing company could easily generate at least ten percent
(10%) operating profit without affecting Millennium Airship bottom line.
Millennium Airship's HHLAV management team is certain that there is a
world wide need of hundreds and hundreds of these hybrid heavy lift air
vehicles. This leasing company would always have a paying customer for
every ship they purchased and should have no concern about excess
inventory.
A less obvious means of revenue would be via marketing on the sides of
the air vehicles as they sortie from location to location. As the initial air
vehicles are planned to be used in the Canadian far north, this option would
not be viable until there are enough air vehicles in service flying in more
populous areas.
In the event that other companies are able to purchase the HHLAV directly
from another manufacturer, we have the option of performing their yearly
depot maintenance at our dedicated depot facilities that will be eventually
located throughout Canada. An independent operator having less than ten air
vehicles would have extremely high operating costs and not be able to
generate their own facilities.
Continue to
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Millennium Airship Inc/SkyFreighter Canada Ltd