Submit a Word document summarizing your analysis and recommendations for both companies A and B.

Situation assessment: Briefly summarize TransGlobal current internal and external business environments and the rationale for acquisition.

Data and analysis: Provide a brief overview of the two airlines under consideration, including your findings and analysis from your balanced scorecards.

Recommendation: Justify your recommendation for the acquisition and explain how it supports the companys objectives.

MBA 620 Company A Information Location, Size, and Age of the Firm

Name:

Location: Miami, FL

Size: 165 employees

Age: began operations in 1981

Customer Segment and Target Market

Market: Caribbean Islands

Destinations: 15 (Guadeloupe, Guyana, Martinique, Puerto Rico, St. Kitts, St. Lucia, St. Maarten, St.

Thomas, St. Vincent, Trinidad, Antigua and Barbuda, Barbados, British Virgin Islands, Dominica,

Grenada, and Tobago)

Market segment: luxury tourist and business class

Aircraft capacities: 20 to 60

Market share of Caribbean destination airlines: 4th at 18.9%

Customer segment: vacationers, tourists, Caribbean business, and government clients

Retention: 66% return customers

New customer growth: 22% annually

Seat occupancy average: 74% (top quarter of benchmarks)

Average customer fare: $450 USD

Delta Connection

American Eagle

Bahamas Charter Airlines

Cape Air

Seaborne Airlines

Major Competitors

Company Leadership

Privately held, with a board, president, VP admin, CFO, COO, VP sales

Company Strategy and Direction

The company is well positioned for a transition and strategic investment. Its cash position is especially positive, providing ample flexibility. Long known as a premium upscale provider, there is an awareness of the need to broaden the customer base, attract younger travelers, and modernize both the fleet of aircraft and customer-facing technologies.

The president and leadership team have adopted these goals for the coming five years:

Improve public image and brand in ways that attract new customers

Improve employee retention; reduce turnover by half

Address aging fleet of aircraft; reduce average age of fleet to eight years

Achieve 20% improved fuel efficiency; leverage this into brand and public promotions

Reduce on-ground aircraft turnaround time from two hours down to 45 minutes (industry average

is 90 minutes)

Current Financial Highlights

Annual revenues: $2829 million

Annual growth YoY: 2.52.9%

Gross profit margin: 45%

Net profit margin: 8%

Aircraft in fleet: 55

Average age of aircraft: 14 years (25 years of useful life is typical)

See financial statements for further details

Background

The company is recognized as a premium provider.

In 2016, the company sold a portion of its fleet and its real estate holdings, resulting in a substantial

influx of cash.

Employees (excluding pilots) have frequently discussed unionizing, but have not acted in this

direction.

The management team is experienced and focused on revenue growth and customer satisfaction.

Customer feedback at or above industry benchmarks (at industry benchmarks 60th percentile or

higher; positive feedback): o On-timearrivals/departures o Airplanecleanliness o Amenities o Employeecourtesy o In-flightentertainment

Customer feedback below industry midpoint (negative feedback): o Frequentflierprogram(none) o Check-inconvenienceandspeed o Baggagehandling

o Convenientdeparturetimes Internal Process Highlights

The reservation system is an early version of Radixx Galaxy; cloud-based upgrades have not been implemented.

Customer check-in and ticketing is manually processed using hard-copy tickets.

Bookkeeping is accomplished using QuickBooks and an external accounting firm.

HR hiring and benefits packages are administered by a third-party provider.

On-ground operations teams rated very good against industry-standard benchmarks.

Human Resource Highlights

Employees: 165

Employees with a post-secondary degree (two-year or higher): 75%

Average turnover rate: 12% annually

Internal training offered:

o FAA Basics (five-day course, required of all new employees) o FAA Safety Assurance System (online two-hour course; all new hires) o CustomerService(eighthoursannually) o Regulationrefreshers(20hoursperyear) o Quality Control Through Six Sigma (optional, up to eight hours per year) o UsingMSOffice(on-demand,onlineofferings;optional

MBA 620 Company B Information Location, 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 business

Aircraft capacities: 1250 seats

Customer segment: vacationers, tourists, business travelers

Retention: 40% repeat customers

Seat occupancy average: 62% (middle of industry benchmark data)

Average customer fare: $249 USD

Delta Connection

American Eagle

Sun Country

Frontier

Major Competitors

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 even 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 before 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; invest in the long run

Annual revenues: $26-27 million

Current Financial Highlights

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 substantial 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 Orlando 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 Shortwaittimesatcounter o Easeofmodifyingreservations o Cost

o Overallvalue

Customer feedback received below industry midpoint (negative feedback):

o Airplanecleanliness o Amenities o Foodandbeverages o In-flightnoise

Internal Process Highlights

Within the last 30 days, an investment and joint venture 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 Regulatoryrefreshercourses(asneeded,withsupervisorapproval)

o Quality and Customer Service Principles (self-study