5-2 Report: Risk Impact Assessment
Kris Terry
Southern New Hampshire University
MBA 620 – Measuring Success in an Organization
Professor: Bill Mannaberg
February 5, 2025
Introduction
While performing an evaluation a company’s health and stability, it is important to identify
and evaluate any current or potential risks the company may face. In this report, I will be
conducting a risk assessment to understand the potential dangers the company can face. I will
evaluate two risks in two categories: Operational and Strategic.
Risk 1: 737 Aircraft
In addition to our Operational plan regarding our lineup of aircrafts, is to re-introduce and
promote the MAX 737 aircraft. Although this aircraft is popular, it has been the subject of
controversy and safety concerns. This risk mainly concerns the impact it has on the market and
how customers will react. It is true that no vehicle is 100% perfectly safe, but if a specific model
is known for its errors and malfunctioning, it will only grow more so in infamy. However, the
impact of this risk would be at medium. Mechanical safety concerns are normal and “pilot error
is thought to account for 53% of aircraft accidents, with mechanical failure (21%) and weather
conditions (11%) following behind.” (Panish, 2024). Just from the introduction alone could make
us lose many customers and even possibly involve legal trouble. This would not be minor issues,
but it will not go so far as closing the airline. To mitigate the risks of market/customer backlash
and possible aircraft complications, we will analyze every safety concern and modify the
equipment. It will still be the same aircraft, but our modifications will lessen any concerns by the
public. We will have the best aircraft professionals evaluate the aircraft before public release and
explain to the public the modifications we made. The worst-case scenario is we discontinue the
use of this aircraft.
Risk 2: Budget and Financials
We have several strategic projects in the works not just regarding the acquisition of the two
other companies, but also the upgrading our own airline. Introducing aircrafts, upgrading
ticketing systems, adoption of alternative fuels, and extra trainings would upgrade our standing
in the market, but it will not be cheap. This impact will be very high as we can get into serious
financial trouble. Sustainable Aviation Fuel (SAF) uses non-petroleum feedstocks which leaves
less of a carbon footprint, however “as of 2022, SAF was priced at approximately 2400 USD per
tonne, approximately 2.5x the price of conventional jet fuel.” (Ibexus, 2024). It will also cost
millions of dollars to build aircrafts and thousands of dollars to upgrade any technical systems.
There are several ways we mitigate budget spending. With our innovative strategies such as
aircrafts and tech systems, we can use the Lean-Process method. This method consists of cutting
away any unnecessary resources or spending (fat) and rely solely on what the customer values.
This will safe us money on COS and know what to prioritize on. As for use of cleaner energy,
this can help improve our brand image, which we then can use to partner with alternative fuel
manufacturers.
Conclusion
With the assessment of these risks, our company can focus on being prepared for the next
stage in this company’s development. The business environment can be unpredictable, so
TransGlobal Airlines can at least be ready for a variety of situations. With the variety of risks, we
have going forward with our projects, we must learn how to adapt and improve our place in the
market.
Resources
Panish (2024). Aviation Crash Statistics | Up to Date List. Panish | Shea | Ravip
https://www.panish.law/aviation_accident_statistics.html
Ibexus, Botolumus (2024). Is Sustainable Aviation Fuel (SAF) Really More Expensive? IBEX
PUBLISHING
https://ibexpub.media/is-sustainable-aviation-fuel-really-more-expensive/
