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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 - 500
miles
- Average speed of flight - 80 MPH /
70 KH
- Average flight time - 6.3 Canadian
hours
- Average cost per ton/mile - $.55
(now year dollars)
- 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.
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