Airline Simulation: SolAir

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  This presentation is part of the Business Strategy module. In this assignment, our group is required to carry out a weekly business decisions on our Airline - SolAir based on the company's performance, the competitor's strategy and the industry environment.
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  • 1. SolAir An experience of a lifetime Presented by: Monisha Andruse, Francine Kwan, Crystalle Liceralde, Anne Healy, Valerija Jonikane, Adriana Cusniuriuc
  • 2. Agenda Strategy to date Interim Performance Future Plans Conclusion
  • 3. Our Strategy  Customer-focused  Risk-averse company – Normal Structure  “Test the waters” – Competitors  Focused Strategy  New planes – new routes  Diversify product – cargo & car rental.  Web Ticket Sales  Reduced cost
  • 4. Profit -700000 -600000 -500000 -400000 -300000 -200000 -100000 0 100000 200000 Q0 Q1 Q2 Q3 Q4 Q5 Q6 Cumulative Profit Qt. Net Profit 1 43,209 2 42,327 3 -36,225 4 -170,316 5 -514,402 6 -3,194 Net profit growth in Qt.6 is 99.4% compared to -202% in Qt5.
  • 5. Revenue, Expenses & Profit Gross Revenue: Continuous growth Operating Expenses: Reduction in Qt.6 -€1 €1 €3 €5 0 1 2 3 4 5 6 Millions Quarter Net Profit Operating Expenses Net Revenue Gross Revenue
  • 6. Other Income Cargo Auto Rental Quarter Profit/(Loss) 2 0 3 (16,211) 4 (12,459) 5 (8,707) 6 4,604 Quarter Profit 4 0 5 18,330 6 22,310
  • 7. Quality and Reliability Quarter Quality Reliability 0 68 92 1 69 94.3 2 66 94.6 3 76 96 4 67 91.4 5 82 96.8 6 77 95.6
  • 8. Liquidity – Current Ratio 0.0 0.5 1.0 1.5 2.0 0 1 2 3 4 5 6 Ratio Quarter Current Ratio Current Assets: Current Liabilities. Range: 1.38:1 – 1.89:1 - Good Increased in Quarter 3 and 4 due to excess cash.
  • 9. Liquidity- Cash Balance Always positive Cash Balance – No Bank Overdrafts. Excess Cash used to repay Short and Long- Term Loans and purchase CDs. $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 0 1 2 3 4 5 6 Quarter
  • 10. Gearing – Debt: Equity Ratio $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 0 1 2 3 4 5 6 Quarter Gearing Long- Term Debt Equity Quarter Debt: Equity Ratio 0 0.18:1 1 0.70:1 2 0.64:1 3 0.63:1 4 0.66:1 5 2.66:1 6 1.94:1
  • 11. Short-Term Plans  Keep the fares at 40 cents.  We are starting to pay dividends.  Reduce both the Promotional and Advertising Budget to $15000 and $12000.  We are neither hiring Sales Personnel nor Maintenance Director because we cannot afford the bonus rate and fears the possibility of resigning, if higher bonus rates are offered by competitors.
  • 12. Long-Term Plans Main goal: Continue to grow Satisfy shareholders and customers: - Fares at NORMAL rate; - Costs being low; - Returning quality for money paid. Share price increase: - Increased competitiveness; - Repayment of debt; - Increased reliability. Be less risk averse: - Adopt new approaches to doing business and accept relevant suggestions.
  • 13. Conclusion  Positive outlook on current strategy  More in depth insight of the industry  Willing to devote time and effort in order to grow.
  • 14. Thank you Questions?
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