Analysis Work

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 US

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: $11–13 million

 Annual growth YoY: 4%

 Gross profit margin: 49%

 Net profit margin: 2–6%

 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)