1. According to the 2009/2010 National Pet Owners Survey, 62% of U.S. households own a pet, which equates to 71.4 millions homes Pet Ownership Number of U.S. Households that Own a Pet (millions) Bird 6.0Cat 38.2Dog 45.6Equine 3.9Freshwater Fish 13.3Saltwater Fish 0.7Reptile 4.7Small Animal 5.3

2. People consider pets as part of the family Dogs are the most popular travel companions Pet travel increases during the summer, more families travel on vacation (Vehicle 76%, RVs 10%, Air 6%) Stay with friends/relatives 32%; pet-friendly hotels 29% Pet Travel Industry

3. Survey of 6,000 pet owners worldwide 61% of pet owners choose to travel with their dogs 33% of pet owners choose to travel with their cats

4. Daycare, sitting services, pet photography, etc. WebMD known for online human health information Expanding Services to Include Pets

5. Breakaway Adventures, a tour company that specializes in relaxed overseas getaways, invites people and their pooches on several different walking tours in France Expanding Services to Include Pets

6. Paradise Ranch – an upmarket resort which caters exclusively for extremely pampered canines Swimming lessons, surf boards Owners can log on to website to look at CCTV footage Petweds.com – animal matrimony specialists; “puptials” Pet-a-Porter – Harrods' Fashion Show for four-legged fashionistas Creating Services for Pets

7. Pet Passport Scheme (PETS) allows animals to travel easily between member countries without quarantine Originated in the UK and spread to other EU countries. Participating include the US, Canada, Australia and NZ Creating Services for Pets

8. Purchase your pet carrier a month in advance so your pet can get used to it A little pre-flight walking will keep your pet calm Always include contact info on your pet’s tag Use direct flights, travel on the same flight Pug-nosed animals cannot travel in the cargo holds. (oxygen deprivation and heat stroke) Small pets may travel with their owners only if stowed under the seat. Pets too big to fit under the seat are relegated to cargo and are treated as such. Air Travel Tips for Pets

9. Most airlines will only accept one or two pets per flight so if you don’t book early your pet might not be one of those animals. Cargo pet travel is not available when outside temperatures are below 45 degrees or above 85 degrees. Due to the lack of oxygen and temperature control in cargo holds, the most common causes of death to pets transported that way are suffocation and heat prostration. Several airlines (including Southwest, USA Air and Continental) have announced they will no longer accept pets on board Even if cargo is climate-controlled, when the cargo door closes, not humans to monitor your pet Use of tranquilizers is possible in some cases Air Travel Issues for Pets

10. One in ten people suffer an allergy to animals According to Canadian Transportation Agency: people with allergy to household pets can be considered persons with disabilities Such pet allergies constitute a disability under the World Health Organization’s International Classification of Functioning, Disability and Health CTA decision favouring 3 applicants: experience an allergic reaction that is significant enough to result in an inherent difficulty in executing a task or action (such as impaired breathing) The result of the applicant’s activity limitation (i.e., allergic reactions) when exposed to cats, he/she cannot travel in the same manner as passengers without cat allergies.” Air Travel Issues for Pets

11. According to US Dept of Transportation 2 million pets travel by air each year 1.65 million shipped in cargo holds Air Travel Issues for Pets

12. May 2005 to Aug 2010 Pet incidents

13. Jimmy and Batnu, healthy pugs 4 and 3 years old Jet Airways - Mumbai to Delhi, dogs dead upon arrival doctor confirmed that lack of oxygen could have caused the death; Jet Airways denied negligence 2 pugs die on flight, owner to sue airline [Delhi] international advisories for shipping dogs clearly say that pug-nosed breeds like bulldogs, boxers and pugs should not travel by air as they have a breathing problems even on the ground and breathing becomes a little more difficult in flights.

14. Bradley, an English bulldog Travelling with his owners From LA to Honolulu The dog “was discovered deceased upon arrival of aircraft. No signs of distress on the animal and kennel was intact,” United Airlines

15. 14 Puppies travelling in the cargo hold from Tulsa (Oklahoma) to Chicago 1 hour delay due to storms in Chicago Temperature already 86°F (30°C) and forecast to surpass 100°F in Tulsa that day 7 puppies died after landing in Chicago Necropsies were inconclusive heat may have been a factor readings "at loading, pushback, take-off and arrival" were within the 85-degree limit Prior health problems Seven Puppies Die on American Airways

16. Seven Puppies Die on American Airways

17. Pumpkin escaped from her kennel Trapped in the cargo hold for 3 weeks, plane travelled to Asia, Germany, and all over the US United Airlines plans to fly 12-year-old "Pumpkin" back home — on the lap of an employee. United Airlines

18. Katya, a cat who managed to escape from her kennel “Passenger checked four cats in four kennels. On arrival one kennel was empty. Cat was found later same day at SEA airport and returned to owner next day 7Aug2008. Owner reported Katya had cut lip, chipped tooth and grease on back.” Northwest

19. Tiger’s cage fell from loading platform and the door opened. Cat bolted and wasn’t seen again The airline offered Tiger’s owner $1,520 in cash and $500 in travel vouchers for losing the Siberian mix Delta

20. Zoe – Jack Russell Terrier Dan Wiesel and Alysa Binder – Owners Weekend getaways had to be close to home She’s not a big dog, but a little too big to fit under the seat Loaded into the plane’s cargo hold “She's a very happy-go-lucky dog. But when she came out, she was shocked--not herself." What travel solution suits her perfectly? Can we convince airlines to treat pets better? Zoe’s Story

21. WELCOME THE NEW BREED OF PAWSENGERS Welcome to the first pet-only airline, where your pet travels in the cabin and receives personalized attention every 15 minutes. There’s restroom breaks, exercise, and even little packets of treats.

22. Pet Airways

23. airline carrier specifically designed for the comfortable, efficient transportation of pets founded in 2005 as Panther Air Cargo, LLC. a Florida Limited Partnership doing business as Pet Airways. researched the market, developed the business plan, and held preliminary discussions with airports, commercial airlines, numerous vendors and potential marketing partners Confirmed there is demand, created financial models, cost and pricing structure, developed website, reservations system and operational procedures Pet Airways: History

24. Commenced flight operations April 16, 2009 Launch was covered by nearly every major broadcast media outlet: CNN, Fox & Friends, Good Morning America, The Today Show, Animal Planet Story covered by print media: USA Today, Cosmo, Entrepreneur, Shape, NY Times, LA Times Social and viral marketing: 22,000 Facebook members, over 5,000 Twitter followers, and over 140,000 views of the video commercial on YouTube August 13, 2010 Pet Airways became public through a reverse acquisition with American Antiquities Inc. (AAQS), name change effective Oct 26, 2010 (PAWS) Pet Airways: History

25. Currently, Pet Airways flies to New York (NJ,CT & Philadelphia)Washington DC/Baltimore AreaChicagoOmahaDenverPhoenixLos AngelesFt. LauderdaleAtlanta Destinations

26. Destinations DC

27. Hub Strategy - lease a plane from Suburban Air Freight, Inc. instead of a specially designed for pets (currently carries 40 pawsengers per flight) subcontract with Suburban Air Freight, Inc of Omaha NE. Pet Airways is not a Certified Air Carrier, but Suburban Air Freight is In-Flight Strategy – veterinary technicians add credibility; in-flight cabin is designed for maximum creature comfort. Pricing Strategy - high enough to generate sizeable margins, but reasonable based on the sensitivities of the company’s target customers. Pet Airways

28. Beechcraft 1900 is a twin turbo-prop Cabins specially equipped to ensure the safety and comfort Pets travel in individual carriers which are secured using proprietary safety system Hub Strategy

29. Pet attendants monitors pawsengers every 15 minutes No need to purchase a pet carrier. A USDA pet carrier is included in the fare Well-lit, temperature controlled, pressurized Administers special medication if required Special feeding arrangements if required (drinking and eating not recommended) Potty breaks In-Flight Strategy

30. Pet Airways Pawsenger Process

31. Pricing Strategy

32. As of July 31, 2010, total of 11 full time employees Executive Management: 3 Managers: 2 Pet Attendants: 6 Veterinarians – 1 on corporate level + contract with local vets in each location Pet Attendants – Certified Veterinary Technicians. One on board each flight Customer Care Concierges – experienced in customer care and/or the hospitality industry. Employees

33. Pawprints - tracking system that allows pet parents to make reservations and track their pet’s travel via the web MyPawsClub -furry flyer bonus program; get discounts off purchases of pet supplies, pet medicines, pet health insurance, pet-friendly hotel stays, pet foods, and more. Pet Rescue – rescue pets adoption paper 15% discount Pet Airways Promos

34. Breeders For breeders or parents-to-be provide proof of litter, puppy or kitten registration with the AKC or CFA 20% discount Agility Competitors Coming soon Search and Rescue Dogs Coming soon Pet Airways Promos

35. Partnership with Best Friends Animal Society No More Homeless Pets Campaign When space and scheduling allows they ask Best Friends if they have any animals who could use a lift For anybody who has ever looked longingly at the adoptable dogs/ cats on the Best Friends website, but couldn’t figure out how to bring them home Pet Airways Marketing and PR

36. in addition to the capital necessary, substantial planning, purchasing of assets, leasing of space, training of personnel, and licensing from several different governmental agencies Strong brand identity Fluctuating fuel costs Economic downturns in airline industry Adverse weather For the year ended December 31, 2009 Pet Airways incurred a loss of $1,218,707, and has incurred cumulative losses totalling $2,009,104 since inception Business Risks

37. Expand cities and flight frequencies Door-to-door limo service Lodging facilities for rest and relaxation before or after travel at airport Grooming, before or after travel. Veterinarian services to handle travel documentation requirements and other medical needs becomes an Advertising Platform for all types of Pet Products and Travel Products, with the ability to generate incremental advertising dollars. Future Prospects

38. Poised for significant expansion revenues growing by more than 50%/year during 2011-2015, with earnings increasing by more than 200%/year Stock price 50% appreciation from current levels AAQS ($2.40)—OTCBB6-12 MONTH PRICE TARGET: $3.50-$4.0018-24 MONTH UPSIDE POTENTIAL: $4.75-$5.00 PET has a “specialty orientation” 1.5-2.0 million pets fly in cargo holds each year in the U.S Potential outweighs the risks Analyst Report

39. Average Seat Mile (ASM) is a measure of an airline flight’s passenger carrying capacity Baltimore Washington International (BWI) to Republic Airport, Farming Dale, NY (FRG) would take 203 miles Key Ratios

42. Currently, no airline for pets Door-to-door ground transport for pets, such as Feathers and Fur Van Lines and Pro-Pet Transports (both based in Oregon), which make large, slow loops across the country, with trips that can last up to 10 days. Pet shippers – travel agents for pet owners, making all the flight arrangements for pets in the cargo holds of commercial airlines Competition

43. Cats, dogs, rabbits, birds Big animals travel as cargo PetSafepet program 24-hour Live Animal Desk Online tracking Earn Miles with PetPass Weather conditions monitored Climate-controlled cargo Climate-controlled vehicles during transport Continental Airlines

44. Launched just after Pet Airways was launched Accepts only small cats and dogs in cabin Only 4 pets per flight, first come first serve Pet + carrier = max 20 pounds No online bookings, call only Counts as one carry on item JetPaws pet program – tips and tools Bag tag Travel Petiquette Mileage points Welcome email JetBlue Airways

45. Cosmopolitan includes Pet Airways in a list of "8 Awesome New Jobs.“ As a pet attendant, you’ll take charge of animals at the pet lounges, dole out belly rubs and ear massages en route, and deliver them safely to their owners at the end of the trip Other jobs include Professional Tweeter, Speed Decorator Pet Airways in the News

46. Pet Airways in the News

47. Travel editor Joe Yonan and his dog Red went undercover if Pet Airways is indeed as good as it claims to be. Joe had poured over the sites FAQs, and a staff member called him days earlier to go over procedures: health certificate, accurate measurement (for crate selection purposes), discussion of Red's demeanor and crate training. The pilot himself gave a friendly greeting to Red and the lounge manager took Red to sniff around the lounge while Joe filled out paperwork When Red arrived a staff called up Joe to let him know that Red landed safely and can be picked up anytime Flight attendant was walking Red around when Joe arrived Staff asked for ID before releasing Red Pet Airways in the News

48. Behind the scenes tour after landing Flight attendant reads the notes next on crate, with weight, destination, and personality comments Went over which pets needed medication Took the dogs out to feed, water, and walk Made sure they had their “luggage” (bag of treats, food, T-shirt or pillowcase many owners had left so their scent could be put into the crate with their pet) Pet Airways in the News

49. Airline Deregulation Act [H] Highly saturated [L] Economies of scale (for profitable operations) [L] High initial investments and fixed costs [L] Low brand loyalty of customers [H] Protected intellectual property like patents, licenses etc. [H] Distribution channels easily accesible[H] High switching costs for customers [H] Little threat of new entrants surviving in the airline industry. Threat of New Entrants

50. The airline industry comprises a large number of small operators [H] The product is undifferentiated and can be replaced by substitutes [H] Switching to an alternative product is relatively simple and is not related to high costs [L] The product is of strategic importance for the customer [L] Power of Buyers

51. Fuel supply fluctuates Airframe source: Few – mainly Boeing and Airbus [H] The suppliers' customers are fragmented, so suppliers could afford losing one customer The switching costs from one supplier to another are high Power of Suppliers

52. Low brand loyalty of customers [H] High switching costs to other airline for customers [H] Switching costs between air travel and its substitutes are fairly low [L] will change according to the route, reason for travel and the customer-type. The relative price for performance of substitutes [M] Threat of Substitutes

53. There are many players providing same product [H] Players have similar strategies [H] Not much differentiation between players & their products, hence, there is much price competition [M] Low market growth rates (growth of a particular company is possible only at the expense of a competitor) [M] Barriers for exit are high [M] Mergers and acquisitions Rivalry of Existing Firms

54. target markets based on their current size and growth projections Large market = stable growth = high competition = consistent stream of customers entrepreneur in the growing pet industry, it is best to focus on a niche category segment, but execute a differentiated offering within that category segment The Market

55. Instead of competing with rivals in existing market, create unique offerings = Value Innovation Blue Ocean No-agreed on industry name Not directly competing with other airlines Pets travel with owners Create new best-practice rules

56. Strategy Canvas Jet Blue Pet Airways

57. The Four Actions Framework

58. Eliminate-Reduce-Raise-Create Grid

59. Six Paths Framework

60. Alternatives : bus, car, or train Substitutes: pet sitters; pet resorts Space between alternative industries provide opportunities for value creation Why do customers trade across them? Focus on key factors that lead buyers to trade across alternative industries Path 1: Look Across Alternative Industries

61. Amtrak does not allow pets except for service animals at the present time. Service animals are allowed on all trains and buses by law. Small dogs in enclosed carriers are allowed on the buses and light rail. You must be able to transport your dog and the carrier by yourself, and you need to hold the carrier on your lap. Noise or odor may give cause for refusal to transport the animal. Pet Public Transportation

62. Bob and Betty Matas did not want to transport their cats in an airplane cargo hold on the trip to their new home so instead hailed a cab for the trip 2,500 mile taxi cab ride from New York to Arizona Drove 10 hours a day for a $3,000 flat rate plus gas, meals and lodging Cleo the cat

64. Change the definition of pet travel People who like to travel with their pet People with large pets have to send their pets to cargo People with small pets can carry them in main cabin People who leave their pets at home Which factors determine customer’s decisions to trade up or down from one group or another Path 2: Look Across Strategic Groups Within Industries

65. Purchasers: pet owner, agility competitors Users: pets Influencers: pet products (PetMate, pet carrier maker), non-profit organizations, animal societies Shifting buyer groups can unlock new value Path 3: Look Across the Chain of Buyers

66. Untapped value is often hidden in complementary products or services More and more pet-friendly hotels add a perceived value Affects demand for their business What about a pet airline with a travel package? Path 4: Look Across Complementary Product and Service Offerings

67. Challenge the functional-emotional orientation of the industry to find new market space What elements can you strip out to make it functional What elements can be added to make it emotional Functional – move pet from point A to point B Emotional – safe and guilt-free Path 5: Look Across Functional or Emotional Appeal to Buyers

69. pet services: grooming, lifestyle, day care

70. health, veterinary services

71. pet insurance

72. pet businesses and non-profits (PetsitUSA, pet relocation, pet resorts, pet fashion, etc)