Media 4 Airline (M4R) helps Airlines conserve cash flow and capital. We help Airlines buy advertising in a way that allows them to pay for some or all of the advertising with their own seats rather than from their limited bank cash resources.
The travel market could not be tougher than it is today. With Corona Virus in the mix travellers are either too scared to leave their homes or there are no flights available to their destination. In any case the situation is desperate for the Airlines.
Traditional way: Airlines buy advertising with cash flow or working capital
Let’s consider an example where an Airline wishing to purchase £40,000 of advertising. The traditional method that has worked for years relies on cash flow funding or access to working capital. Now, in order to have that cash in the bank in the first place, the Airline must have made sales in excess of £40,000 leaving them with a clear £40,000 after they paid their operating costs.
The Financial impact and result of the traditional way is:
- £40,000 advertising campaign is produced with no guarantee of a return on investment, it may not attract a single traveller
- Bank account has been drained of £40,000 working capital
- The risk of 100% failure is very high
M4R way: Airlines buy advertising with some cash and some seats
The M4R method allows the Airline to pay between 50% and 100% of their advertising with their unsold seats. This immediately conserves cash flow and reduces the drain on working capital. In the example below we show the impact of paying 50% in cash from the bank and 50% in seats.
The Airline will need to release £20,000 cash from the bank to part pay for the advertising, leaving the other £20,000 for other uses. They will then issue £20,000 of flight vouchers or codes that may be redeemed against their “stock of unsold seats” to complete the payment of £40,000 for the advertising.
The advertising will run and be exactly the same advertising as that would have received under the traditional way.
The Financial impact and result of the M4R way is:
- £40,000 advertising campaign is produced and before it even commences the Airline has a forward sale of £20,000 in seats, this is a 50% return on investment from the outset.
- Bank account has not been drained and still has £20,000 cash in it
- Customers contact the Airlines and book, quoting the voucher number.
- Should none of the vouchers ever be presented, then the Airline received the advertising for free
- If the advertising works then it will drive additional travellers to the Airline directly or via their online platform
- The Airline saves even more because the additional incremental cost to fly a person in what would have been an empty seat is negligible. The aircraft and crew were flying in any case.
- The risk of 100% failure is zero as £20,000 of seats was committed to up front.
- The bottom line for the Airline is, extra seats sold, extra cash flow and extra profits
In every instance Airlines should try to buy advertising with unsold seats on hand and not cash in the bank.
Which Airlines are best suited for the M4R way?
The Media 4 Airline platform is suitable for almost every Airline. The only requirement is that they have a need to advertise. Certain Airlines are more suitable than others and each is reviewed for its suitability on an individual basis. Some will be able to buy advertising with 100% payment in flight vouchers and for others it may be only 50%.
Every case is different and it depends on the type of Airline and its destinations.
The best way forward is to make an enquiry. We will be able to tell very quickly if M4R will work for your Airline.
What types of Media are available?
We are able to supply almost every form of advertising with at least 30% payable in unsold seats. The media includes:
- Print news and digital news
- Sunday paper inserts
- Main stream digital, google and face book
- Bill Boards, paper and electronic, 96 sheet, 48 sheet, bus shelters and phone boxes
- Taxis and buses
- London underground, tube, posters, escalators
- If we haven’t got it we will try to get it
Please ask yourself these two questions.
- “If I stop advertising now and keep the cash in the bank, how long will my Airline survive?”
- “Would I rather buy advertising with cash from the bank account or pay with my unsold seats?”
M4R provides a strategy that allows the Airlines to have an each way bet, we fill empty seats, create extra cash flow and deliver extra profit, guaranteed!