V.I.P.

Very Important Passengers

Brief presentation

About the business niche This is a brief presentation of

Tango plan to operate (mainly)

in South America serving

special interest groups of

travelers, operating charter

flights.

This business is focused in a

niche where none or few other

operators are competing.

In fact, there are:

• Traditional (and low cost)

airlines serving regular

routes

• Business and first class

services in these same

companies, and

• Executive charters and air

taxi companies serving

small groups of travelers,

Then the offer is as follows:

A little research shows that

there are some groups looking

both for a flexible schedule

and – at least – business

class comfort:

And a reality check confirms

they are willing to pay for that

kind of service.

• High spending players

traveling to casinos in the

region

• Soccer – and other sports

– teams

• Government and

executives delegations

Traditional airline Charter company Executive charter

Comfort

Limited to the few

1st & business

class seats

Same plane, same

problem

Even fewer "good"

seats, but they are

ALL good

Cost $$$ $$ $$$$

Schedule

Passenger

accomodates to

airline schedule

Schedule

accomodates to

passengers needs

Same as charter

Number of seats

10 20 80 40 100 200+

Fa

re

$

$$

$$$

Not profitable

Traditional

Commercial

Flights and low

Cost airlines

First class

In traditional

Commercial airlines Executive

charters

Still there is room in the skies

Tango will go in this phase for the

VIP passengers market in a niche

that is presently not served neither

by traditional airlines nor by the

small executive charters in the

region.

New 5 stars hotels and casinos in

the region have generated an

incoming flow of VIP passengers

creating this demand for comfort

and luxury for charters of 40 – 60

pax.

Potential clients All the mentioned potential

clients have already been

contacted and have confirmed

their intention to make

business with Tango.

Some have provided

projections.

For Conrad also Chile has to

be considered, now the hotel

& casino is property of a

chilean group.

Basic research and contacts

have been performed in

Uruguay, but there have been

also high level contacts in

Argentina as well, with AFA

(national soccer association)

and their interest is also high.

Uruguayan government has

the need for this kind of

service for their international

flights, as also confirmed by

their interest during the initial

contacts.

Thus, this is a first approach

to the potential market.

Further contacts in the region

(Brazil, Argentina, Paraguay,

Chile) would show other

interest groups to offer Tango

VIP services.

Clients have already confirmed interest

The 2 most important hotels/casinos

in Punta del Este (the VIP

destination for casino players, plus

the rich people in the region) have

already confirmed their interest in

these charters.

Also, the Uruguayan Soccer

Association (AUF), Tenfield (TV

group of “Paco” Casal’s group, the

main soccer players manager), the

Uruguayan government for their

official representations and

commercial missions, have

confirmed in advance their interest,

too.

Soccer is not only about teams in 2014

In 2014 the FIFA World

Championship will be held in

Brazil, comprising several

cities in this vast country.

This implies a lot of people

who is going to attend the

matches of their national

teams.

Among this people there also

is the high spending profile

group that is Tango’s focus.

Such and opportunity cannot

be lost.

And do not forget 2014 …

2014 is the year where Brazil is to

host the FIFA WORLD CUP, within a

continent whose inhabitants are big

soccer fans. People from Argentina,

Chile, Uruguay, Peru, Colombia, and

the rest of the continent will travel to

Brazil to attend the tournament.

And 2016 will have Brazil in the world’s eyes, again Only 2 years after the FIFA’s

World Cup, Rio de Janeiro will

be the city of the Summer

Olympic Games.

Once again, high spending

travelers from all the region

will be attending a great event

in Brazil.

“It is estimated that today,

Rio would only be able to

house 52,000 tourists; the

expected number is 1

million. There is a massive

need for housing, and

transportation

development.”

(from Seven Pillars Institute for

Global Finance and Ethics report)

That means a need for extra

capacity in all transports,

including flights.

And Tango will be positioned

to offer premium service to the

special interest groups of

athlets, teams, and visitors to

the games.

… nor 2016

And in 2016 Rio de Janeiro will be

the host city for the Summer

Olympic Games, once again

creating a high traffic scenario in the

region, for high spending profile

travelers.

The plane

These one and another like

this are already set for Tango

needs and currently available.

Our birds for these skies

For this first initial operations Tango

will fly with 2 (two) Boeing 727

airplanes, specially configured for

the VIP passengers it’s going to

serve.

The B727-200 Among all the options, the

Boeing 727-200 is considered

the more suitable for a startup

in this kind of operation.

PROs

• There is a lot of available

aircrafts of this type, ready

to fly now. That is, no

waiting time for startup.

• Lower cost of acquisition

or leasing.

• There are trained pilots in

the region and

everywhere.

• The plane has the required

flying autonomy for the

considered distances.

CONs

• High fuel consumption

• But,

• this can be bettered by

modifying the structure and

adding winglets, and with

an upgrade in the type of

engines used.

• This upgrade (winglets)

has been considered as

the first step in the

evolution of operations.

• Estimated cost:

USD 250.000

• Time: 3 months to perform

upgrade

The 727’s for this operation

The 727 is an old but yet very good

airplane, still in operation worldwide

in many regional airlines.

The fuel cost is its main

disadvantage but in this case, due

to the high fares this market can

afford and is willing to pay, is a

suitable option.

In the other hand, the airplane

purchase cost (leasing item in costs

breakdown) is considerable lower

than newer models, thus making

this a very good option for an entry

to the market.

First estimation

This first projection is based

on potential clients expressed

needs.

Only the main clients and

most firm interested are

considered.

Chile is also an interest for

Conrad, but projections have

not been update because lack

of their estimated traffic and

destinations within this

country.

Even though, in the financial

projections a second scenario,

with a third of block hours

sold is considered, to offer a

more conservative view.

Making the math

Based on the numbers provided by

Mantra and Conrad hotels, plus the

estimation from AUF (soccer teams

participating in international

tournaments), here is a projection of

the operation’s block hours (flight

and pre take-off and post landing

operations).

BLOCK HOURS :: DETAIL

Hours

round trip

Weekly

round trips

Monthly

round trips

Hours per

month

Conrad (1) Rio de Janeiro 6 1 4 24

Sao Paulo 5 2 8 40

Porto Alegre 3 2 8 24

Curitiba 3 1 4 12

Buenos Aires (2) 1,5 11 44 66

Mantra (3) Rio de Janeiro 6 1 4 24

Sao Paulo 5 1 4 20

Porto Alegre 3 1 4 12

Curitiba 3 1 4 12

Buenos Aires 1,5 1 4 6

Soccer teams (4) 6 0,25 1 6

Government delegations (5) TBD 0 0 0

0 0 0

22,25 89 246

BLOCK HOURS :: SUMMARY

Weekly

round trips

Monthly

round trips

Hours per

month

Conrad 17 68 166

Mantra 5 20 74

Soccer teams 0,25 1 6

Government delegations 0 0 0

22,25 89 246

2 PLANES FLEET

2 PLANES FLEET

(1) Based on their programmed schedule

(2) 1 rt/day from Tuesday to Thursday, 2 rt/day from Friday to Monday

(3) Estimated

(4) 1 charter/week during 2 to 3 months = 12 trips/yr = 1 trip/month

(5) To be determined (TBD)

Calculations Calculations have been

performed for 2 scenarios.

1) 80 block hours sold

• The more conservative

• 2 crews needed

• Less hours flying

increases the weight of

fixed costs in «per-hour»

cost

• Less landings and

navigation fees, more

parking fees to be paid

2) 246 block hours

• Based on customers’

projections

• 3 crews needed

• Fixed costs are more

diluted in hour cost

• Landing-navigation-parking

fees change composition

accordingly

• Maximum number of hours

to be served with this fleet

• If business is larger than

expected, more planes

should be added

Information has been taken

from public sources and

market research.

Sell price has been checked

with potential customers

Projections

The numbers, based on standard

costs for the 727 plane, and the

projected block hours show this is a

profitable business, even for a more

conservative estimation of block

hours of operation (1/3 of what has

been calculated).

Monthly block hours:

1. COSTS Block hour Monthly Block hour Monthly

Leasing 256 62,977 787 62,977

Fuel 4,187 1,029,905 4,187 334,928

Flight Crew 295 72,533 604 48,355

Cabin Crew 96 23,738 198 15,825

Handling 1,500 369,000 1,500 120,000

Insurance 22 5,486 69 5,486

Catering 1,125 276,750 1,125 90,000

Navigation/Landing/Parking 2,238 550,534 1,172 188,733

Maintenance, provisions and spare parts

Materials 700 172,200 700 56,000

Recurrent 90 22,140 90 7,200

Subtotal 10,509 2,585,263 10,432 929,506

Admin., mktg. & mgmt. 1,051 258,526 1,162 92,951

Flight dispatcher 18 4,396 55 4,396

TOTAL COSTS 11,578 2,848,186 11,649 1,026,853

2. INCOME

Block hours sales 13,950 3,431,700 13,950 1,116,000

3. GROSS PROFIT 2,372 583,514 2,301 89,147

* Amounts in US dollars

246 80

Contact information

Cmte Luis Hernandez Tango Lineas Aereas CEO

luis_aeropostal@yahoo.ca

Phone: +598 99272002

Summary

• There is an attractive market niche to be exploited.

• Clients have expressed their interest.

• Plus: 2 high-traffic generating events in Brazil: FIFA world cup + Olympic Games

• Projections show a profitable business.

• If we don’t take this opportunity, someone else will do it.