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Financial Report
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Operations Review
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Ke y Figur e s
08
2012 Highlights
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Our positive cash flow and strong asset base, along with our network of loyal and valued customers, also stands us in good stead to deliver excellent profits and shareholder value in the coming years. Without our dedicated and reliable employees, the growth plan devised at the start of the year wouldnt have been possible. In the face of continued internal growth, our growing workforce has not faltered on quality, helping our business achieve a record 98.4% reliability rating. They have consistently exceeded the high expectations customers come to expect from Air Choice One, and for this reason, our people are our greatest asset. Leading onto my personal highlight of the year; we were awarded the prestigious Commuter Airline of the Region award 2012. Recognition of this kind is something we can all take pride in for it demonstrates our unparalleled commitment to our customers. It is a testament as to how much Air Choice One has grown in a year, and I look forward to the future.
Financial Statements
Income Report:
2012 Net Revenue Expenditure Profit/loss before tax Tax paid Net profit/loss Dividends paid Profits retained
$13,018,902 $13,178,905 -$166,926 $0 -$166,926 $0 -$166,926
2011
$4,943,368 $4,795,144 $148,224 $59,288 $88,936 $8,000 $80,936
% Change
163% 175% -213% -100% -288% -100% -306%
Asset Report:
2012 Total value of assets Total value of liabilities Amount of common stock Value of common stock Retained earnings Total equity
$7,286,000 $6,669,604 198,571 $2,600,000 $21,093 $2,621,093
2011
$2,482,089 $794,070 150,000 $1,500,000 $188,019 $1,688,019
% Change
194% 740% 32% 73% -89% 55%
Financial Review
Overall Review Michele Granata
Air Choice One in the 2012 financial year has delivered a positive financial performance, despite continuing macroeconomic Finance Director challenges, growing competition and a consistent increase the price of oil. Our strategy for growth began to have positive financial impact in quarter three, with net profits of over $200,000. However, our long term decision to replace our inefficient, aging fleet of aircraft, along with disruptive winter weather, led us to report a net loss of $166,926 for the year. We have however established a solid foundation for profitability in the future as well as for further expansion. Moreover, having diversified into the car rental and cargo market which produced promising profits of $15,544 in the final quarter of 2012, we expect these undertaking to become a source of important revenue and profit.
2011 Q4 $22,234
Our expansion in 2012 has been fuelled by a combination of stock sales, loans and retained profit. Consequently, the payment of dividends hasnt been feasible in 2012. With an expected return to profitability in 2013, we plan to reward shareholders for their investment in the coming year.
Assets
The total value of assets increased consistently during this year passing from 2,5 to 7,3 million dollars, for a total $2,004,697 increase of 4,8 million. This rise was driven both by current Fixed Assets $7,286,000 assets as well as fixed assets. Current Assets The change in current assets is due to the account receivables, which has grown following the positive trend of the revenue. However, the main driver of the asset increase is the fixed assets value which is essentially composed by the plane we own. At the moment, we directly own one Embraer Brasilia and two British Aereo 31, which have a higher quality and value respect from the three Beechcraft we had at the beginning of the year.
Operational Review
2012 has been a year of aggressive market expansion, meaning an overhaul of previous operations to bring the company in line with its new strategic direction. The changes initiated were to support long term financial success. From an operational perspective, our new strategy has seen positive results in the 2012 financial year : Aircraft reliability has increased from 92% to 98.4% Our network of routes has tripled in size
Brenda Palmgren Our fleet has grown by 133% Operations Director Routes
Achieving a balance of simultaneous growth and retention of our existing routes has been a priority of the department in 2012. We have secured services in our longstanding routes, however through a process of continual assessment of our existing and potential routes pulled back on those less lucrative. We have taken advantage of the lack of major airlines servicing commuter routes by establishing a presence in the new fast growing market for foreign business these routes open new challenges for the company along with the opportunity to develop and expand our core competencies. We will continue to strategically assess opportunities for expansion in 2013 with a view to servicing over 23 routes by the end of 2013.
Fleet
Expansion has both given the Aircraft Quantity Quantity opportunity and required an extensive Leased Owned re-examination of our aircrafts. In order 2 3 to meet our targets for reliability and British Aero 31 perceived quality this year has brought a Bmbraer Brasilia 1 1 total overhaul and investment into better quality aircrafts. We have introduced the British Aero 31 to replace our older and less competitive Beechcraft fleet as well as investing into larger and more efficient long haul carriers.
15
1192
Passengers
Tu r nove r
million pounds
7
Aircrafts in operations Flights per quarter
34
99%
Reliability
192
Team Members
2012 has seen Air Choice One invest significant amounts in advertising and promotional schemes aimed at retaining our existing customers in an ever growing competitive environment, whilst also supporting our expansion into new routes, the cargo industry and the car rental market.A number of exciting advertising initiatives were launched, employing a wide range of media - from billboards to newspapers. Our We Want You advertising initiative deployed in regional newspapers has been particularly successful in Jessica Zhang developing a profitable customerbase. Marketing Director 2013 will see sustained investment in our marketing activities as we look to solidify our existing customer base, whilst ensuring expansion into new areas is properly supported.
2012 was a year of continuous investment in the standards of training we offer. Our employees are recognised as our best and fundamental resource and head office works very closely with representatives from different areas and regions We work proactively in many ways to ensure that our people practices are congruent with Air Choice One mission, vision, and culture. We acknowledge our responsibilities and dedicate as much time, energy and financial resources as possible to ensure that our company is a healthy workplace. We remain absolutely committed being an exciting and attractive place to work for our 192 Raphalle Le employees. In such a competitive environment as the airline Tanneur industry, our company rely more than ever on its men and women, HR Director they are our strength toward success. Thus, I would really like to thank all members of the Air Choice One team for the great job we did together last year and I hope it will continue on the same virtuous path.
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January
Cargo
In reaction to the current external environment we have taken advantage of the diversification prospects within the cargo industry. Whilst this has taken longer than expected to deliver the forecast profits, we believe that it will grow to be an important secondary revenue stream. We will continue to monitor the profitability of this venture, as with all our ventures making hard decisions where necessary.
March
Corporate Social Responsibility
2012 has seen continued investment in our Educate the Nation campaign, aimed at providing internships and educational courses for the youth in the communities we operate. At Air Choice One our long term growth strategy recognises the need for investment in such facilities, and we remain committed to this cause.
2012 Highlights
May
Commuter Airline of the Region
In May 2012, Air Choice One won the coveted and prestigious Commuter Airline of The Region Award recognition of our excellence, customer service and expansion into commuter towns and cities across regional America. All of our staff can be proud of this achievement, and we are confident this award is the first of of many more to come.
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July
Car Rental Business
In addition to our core strategy of commuter flights, we made a $200,000 investment, spread over eight quarters, into the lucrative car rental market. This opportunity has offered our customers a more integrated travelling solution delivering value to customers and shareholders alike. We continue to grow our fleet of cars and rental locations, and our strategy in 2013 will focus on solidifying and growing this venture.
September
Customer Review
James: Check-in was flawless as was boarding. The flight attendants were attentive, friendly and very knowledgeable. The Captain's announcements were also informative, confirming the time of arrival on the plane. The on-board drinks service was speedy and efficient. Overall, it was an excellent experience. I would totally recommend Air Choice One on this route and in fact I have already booked my next flight with this company.
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An electronic copy of this report is available at: www.airchoiceone.com/annualreport2012 Printed on 100% recycled paper
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Air Choice One 38507 Long Street Newark, California 94260 USA T (800) 866-2436 F (501) 608-5889 www.airchoiceone.com