Dart Plc Financial Report 2004

1.0 Introduction and Background information

Dart Group PLC, by its own description is 'an aviation services and distribution group' . It works in three specialised sectors;

1. Cargo and passenger air transport/travel, on both charter contracts and scheduled services in a 'budget', or low cost market. The cargo company 'Benair Freight International', the airline 'Channel Express (Air Services)'*, and budget airline 'Jet2.com' (a trading name of 'Channel Express') are all owned by Dart Group PLC.

2. Haulage of fresh produce and items with specific temperature controlled needs to supermarkets and wholesale markets within the United Kingdom, via 'Fowler Welch - Coolchain' and 'Channel Express (channel Islands)'*.

3. Freight forwarding. This takes place at London Heathrow, Manchester, East Midlands and Newcastle airports as well as from locations in the Far East.

The Dart Group has been in operation (under different names) for over 30 years. Over the years it has grown significantly in land, sea and airfreight as well as in air passenger travel. It has formed the 'Channel Express' companies, named so due to the nature of their business; the group also acquired some rival companies to better profits and strengthen their position in the Channel Island, and UK market.

The Dart Group can be seen in today's market by the diagram below

1.1 Rivals

Being in four main sectors (special freight, international freight/freight management, low cost passenger air travel and charter air travel), Dart Groups subsidiaries have many competitors. I will briefly attempt look at these individually, although due to the sheer numbers of companies in each sector, a perfect comparison will be hard to find.

Fowler Welch - Coolchain

In the area of fresh produce and chilled food distribution, there are literally hundreds of companies who can offer alternatives to the service offered by Fowler Welch - Coolchain. Many large road haulers like 'Eddie Stobart' and 'Christian Salvesen' offer the distribution of temperature controlled goods, and many still offer temperature controlled distribution warehouse space, much like Fowler Welch - Coolchain. The strength Fowler Welch - Coolchain has, is that it's component companies had been established for many years before they were acquired and merged, meaning that many contracts were also acquired; some of which are large distribution contracts with Asda, Safeway, and Tesco, as well as a very large share of the Channel Islands flowers and food freight.

Benair Freight International

Benair is very well established in the market of freight forwarding, and specialises in the outsized and live freight (especially tropical fish). Obvious competition would come from large freight companies such as FedEx and DHL, but I would not be regarded as being in the same competition market as Benair, due to their size and considerable market share advantage over Benair (it would be an unfair comparison). Universal Express, a subsidiary of Brant Logistics Information Technology Services (BLITS), or Excel Logistics would be more sensible companies to compare Benair with.

Channel Express (CI)

Freight to and from the Channel Islands comprises mainly of small firms who offer small haulage and freight services to and from various cities in the Channel Island area. Aurigny offers a smaller scale freight service to what Channel Express offers, of only 4 tonnes of freight per day. But also has a contract with Royal Mail and the Jersey Post Office to fly post overnight to the UK, this contract isn't of the same size as Channel Express, but still poses as competition

Channel Express (air services)

This subsidiary is a charter airline, which operates on behalf of tour operators and also for film studios and sports teams. They operate much like 'Monarch' or 'Britannia', working for tour operators, but the above two airlines have a much larger fleet and contract more flights from the operators. They also sell their own flights, where as Channel Express does not, it only charters the whole airline. In this way it is similar to a company such as 'Air Charter UK PLC' or 'Anglo European', who both offer airline charters. But they are more specialised than Channel Express and have a larger and more diverse fleet of aircraft.

Jet2.com

Jet2.com has entered a market where many join and few survive. Airlines such as 'Duo' and 'Planet Air' (to name just two) have opened and found the market far too competitive to survive in, so have folded. Where as others, (i.e. Buzz and GoFly), have been bought from their parent companies. This sometimes proves to be a profitable move for large airlines like British Airways and KLM, so if the market is too hostile for Jet2.com, Channel Express could 'cut their losses' and sell. The airline has enjoyed a good rate of expansion shown (i.e. the number of flights, destinations and aircraft in use) as well as the numbers of passengers it is taking, and has even beaten off competition from 'Planet Air' (which was also based at Leeds-Bradford Airport.

Jet2.com has also received 2 awards in its short existence:

* Best Short Haul UK Airline - for customer satisfaction - voted by the readers of the Guardian and Observer newspapers - May 04

* World's most punctual airline operating into Amsterdam's Schiphol Airport during 2003

If you look at the above awards in regards to their mission statement (shown below), you can see that they are fast moving towards meeting their own demands. They have had no accidents, are punctual and have a high customer satisfaction rate. Although it is still early days, and in such a volatile market, this might be a goal they never achieve.

"Our aim is to be the safest, most responsive and reliable operator of low cost services in Europe"

1.2 Current factors affecting Dart PLC

1.2.1 Crude