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Module 3 Company B Information

Company B is a regional airline based in Orlando, FL with 98 employees that has been in operation since 1988. It services eight destinations in Florida and nearby states. While smaller, the new president wants to make the company more innovative by emphasizing agile problem solving and a lean working environment. The company has annual revenues between $11-13 million and seeks to improve areas of customer feedback like cleanliness and amenities.

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Benedict Onyango
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118 views

Module 3 Company B Information

Company B is a regional airline based in Orlando, FL with 98 employees that has been in operation since 1988. It services eight destinations in Florida and nearby states. While smaller, the new president wants to make the company more innovative by emphasizing agile problem solving and a lean working environment. The company has annual revenues between $11-13 million and seeks to improve areas of customer feedback like cleanliness and amenities.

Uploaded by

Benedict Onyango
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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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)

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