EFTA02427852.pdf

To: jeevacation(©maitcomfjeevacation@gmail.com] From: Jennie Saunders Sent Fri 3/26/2010 7:34:52 PM Subject: Fw: Green Jets - Additional Information Greenjets Markets 3 25 10 xls Title: Fw: Green Jets - Additional Information CORE: Jennie Saunders Founder & Chairman I 66 East 55th Street New York NY 10022 I Main —I Mobile: www.coreaccess.net —Original Message— From: charles.rockwood To: Todd Thomson CC: Jennie Saunders : Dean Rotchin Sent: Fri Mar 26 13:08:57 2010 Subject: Green Jets - Additional Information H «Greenjets Markets 3 25 10.xls>> i Todd, Dean explained to me that you are curious about the February numbers and want to get a better understanding of how we will make money. The attached file, Grecnjets Markets 3 25 10.xls, contains four tabs: 1) Flight Level Econ. February. Shows flight perfonnance for the Shared Ride flights that were done in February. 2) Flight Level Economics. Shows flight performance by category (shared ride and charter) since inception and also through the Plan years. 3) Market Economics. Shows the incremental P&L impact of each new market we add. 4) Markets Open. Shows what markets we plan to open (and when) ova the Plan years. Since flight operations began in October, 2009 serving the NY-FL markets, we have ramped up in four months with very little advertising to where in February we had 13 Shared-Ride flights (where customers pay by the seat) and 40 total shared- ride passengers, 34 of which were paying clients and 6 which were free companions (as part of our greenjet card program). We also did an additional II Charter flights in February (where a client charters the whole plane for a specific flight). Our Gross Margin on the Shared-Ride flights was ($7,597), or (9.5%), while our Gross Margin on the Charter flights was $18,140, or 13.1%. Our overall Gross Margin for all flight missions was $10,543, or 7.8%. A further examination of the Shared-Ride flight data in February indicates the following: • 3 flights were profitable producing a Gross Margin of 510,349, or 31.6%. • 10 flights were not profitable and produced a negative Gross Margin of ($17,946), or (38.0%). • The Load Factor (number of paying customers per flight) on the 3 profitable flights was 6.0 while the Load Factor on the unprofitable flights was 1.6. In considering this Shared-Ride flight data, it's important to understand the following: I) We need to consistently invest dollars in advertising or our Load Factor will suffer accordingly. Our Plan calls for an Ad spend of S80k (540k per month for two months) for each market we open prior to launching our first flight, and then $20k EFTA_R1_01497156 EFTA02427852 per month thereafter to keep the flow going. Using this logic, during the period October 2009 through February 2010, for the two markets we have (NY-FL), we should have spent S I 60k in July and August for the pre-launch initiatives plus another S240k in recurring campaigns for a total of 5400k during this period, or S640k for the first year. We only spent S I50k during this period; and that was done in an ad-hoc fashion. 2) We currently have approximately 500 clients in NY and 600 in FL in our database (those with mails and phone numbers linked to those two markets). 3) Using the actual average seat revenue of $2,354 for all Shared-Ride flights conducted in February (skewed to card holders at a discount vs. retail, which are driven by advertising, which would have been more like 53,000), and adding an additional paying passenger on each of the 10 unprofitable flights would have turned the overall Shared-Ride Gross Margin from ($7,597) to $15.947. or 15.4%. In all probability spending the full planned advertising budget of 5400k during this period would have increased the Load Factor further due to the nearly 3 fold increase in advertising spend, plus the average seal revenue would have been higher due to an increase in retail clients vs. cardholders. Our business model is predicated on consistently investing a sufficient amount into advertising in order to drive clients and trip requests and thus achieve an attractive Load Factor. At steady state, our Plan calls for an average Seat price of $3,024 and an overall flight level Gross Margin of 35%. When you add in the card sales, the Gross Margin increases to 47% and the resulting Pre-Tax income is 40%. Please don't hesitate to call should you have any questions. Regards, Charles. Charles B. Rockwood Chief Financial Officer Green Jets Incorporated www.flyg,reenjets.com <httplAvww.flygreenjets.comf> 1675 Palm Beach Lakes Blvd Suite One 13.11.1.11., 33401 EFTA_R1_01497157 EFTA02427853