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: 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 USD 

 

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 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 

 

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 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 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 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 Regulatory refresher courses (as needed, with supervisor approval)  o Quality and Customer Service Principles (self-study)