MBA 620 Company A Information Location, Size, and Age of the Firm • Name: • Location: Miami, FL • Size: 165 employees • Age: began operations

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

Major Competitors

• Delta Connection
• American Eagle
• Bahamas Charter Airlines
• Cape Air
• Seaborne Airlines

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: $28–29 million
• Annual growth YoY: 2.5–2.9%
• 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-time arrivals/departures
o Airplane cleanliness
o Amenities
o Employee courtesy
o In-flight entertainment

• Customer feedback below industry midpoint (negative feedback):
o Frequent flier program (none)
o Check-in convenience and speed
o Baggage handling
o Convenient departure times

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 Customer Service (eight hours annually)
o Regulation refreshers (20 hours per year)
o Quality Control Through Six Sigma (optional, up to eight hours per year)
o Using MS Office (on-demand, online offerings; optional

  • MBA 620 Company A Information
    • Location, Size, and Age of the Firm
    • Customer Segment and Target Market
    • Major Competitors
    • Company Leadership
    • Company Strategy and Direction
    • Current Financial Highlights
    • Background
    • Internal Process Highlights

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