Project Submission: Acquisition ProposalPrevious Next Scenario You are a former Navy officer and fighter pilot, and you are now the controller of a division of TransGlobal Airlines, a large organizat

MBA 620 Company B Information Loca tion, Size, and Age of the Firm • Name: • Location: Orlando, FL • Size: 98 employees • Age: began operations in 1988 Customer Segment and Target Market • Market: Florida and nearby destinations • Destinations: eight (the Bahama Islands; Savannah, Georgia; Atlanta, Georgia; Tampa, Florida; Fort Myers, Florida; Miami, Florida; Tallahassee, Florida; and New Orleans, Louisiana) • Market segment: tourists and busi ness • Aircraft capacities: 12 –50 seats • Customer segment: vacationers, tourists, business travelers • Retention: 40% repeat customers • Seat occupancy average: 62% (middle of industry benchmark data) • Average customer fare: $249 US D Major Competitors • Delta Connection • American Eagle • Sun Country • Frontier Company Leadership Privately held, with a board, president, VP admin, CFO, COO, VP sales Company Strategy and Direction As a smaller player, the company is more of a follower than a leader; however, the new president has a desire to shake things up. The image of the company as cheap transportation is no longer sufficient, and the leadership team seeks to demonstrate that ev en a small company can be an innovation leader. They hope to do this by emphasizing the potential benefits of agile problem solving and a lean and clean working environment. These 10 -year goals were adopted in 2015; they were reaffirmed in 2019 shortly b efore the arrival of the new president: • Demonstrate adaptability, flexibility, and speed in decision making and innovation • Build the best workforce; be a winning team • Do the right thing; provide excellence in customer service • Enjoy the short run; inve st in the long run Current Financial Highlights • Annual revenues: $26 -27 million • Annual growth YoY: 3% • Gross profit margin: 33% • Net profit margin: 0.2% • Aircraft in fleet: 40 • Average age of aircraft: 18 years (25 years of useful life is typical) • See financial statements for more information Background • The company is known as a value leader. • In 2016, the company sold its ownership in a regional hotel chain, resulting in subs tantial cash holdings. • The company has strong business relationships with area employers in the theme park industry. • The company president is new this year; prior experience has been heavily influenced by organizational transformation initiatives. • Turnover among employees is higher than many airline companies, but average for the central Florida economy; maintenance employees are increasingly more difficult to find and retain; overtime is common in the maintenance department. • Wage levels in the Orl ando area are growing, resulting in upward pressure in compensation. • Customer feedback received that is at or above industry benchmarks (at industry benchmarks 60th percentile or higher; positive feedback): o Short wait times at counter o Ease of modifying reservations o Cost o Overall value • Customer feedback received below industry midpoint (negative feedback): o Airplane cleanliness o Amenities o Food and beverages o In-flight noise Internal Process Highlights • Within the last 30 days, an investment and joint v enture was established with SITA Horizon software system, including an industry -standard customer portal and a hospitality industry interface functionality. • Bookkeeping is integrated with the new SITA system; an external accounting firm will still be used for audits. • HR function is provided by a consortium partner in the local area (outsourced). • On -ground operations teams rated fair against industry -wide efficiency standards. Human Resource Highlights • Employees with a high school diploma or higher: 95 % • Employees with a post -secondary degree or diploma: 60% • Average turnover rate: 18% annually • Internal training offered: o Regulatory refresher courses (as needed, with supervisor approval) o Quality and Customer Service Principles (self -study )