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Business Game Presentation of Management Audit
This document provides an overview of Royal Absolute Airlines' operations, marketing, sales, human resources, and finance over 8 quarters. It includes recommendations to focus on advertising and promotion in the short term while strengthening the brand and increasing market share in the long term. Charts and tables show trends in key metrics like revenue, expenses, load factor, market share, and stock price.
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Business Game Presentation of Management Audit
- 1. Royal Absolute Airlines EREN KONGU PAMELAGUTIÉRREZ PALOMA PÉREZ TANGUY ROUSSEAUX RAÚL MARKOS GEOFFROY BESLIN JAVIER SÁNCHEZ
- 2. Index I) Overview II) Operations III)Marketing IV) Sales V) Human Resources VI) Finance VII) Recommendations
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- 4. Vision: We believethat travellers deserve the best. Mission: Providing the best flying experience to our customers. Strategy: Luxury Standard. Slogan: An Absolute pleasure!
- 5. STRENGHTS WEAKNESSES • Goodorganization. • Relevant worksheets and records. • Great team cohesion • First in Quality. • First in Reliability. • Proper fare sales. • Adequate routes positioning. • More and more stable financial statements. • Double designation with a major airline. • No dividends paid yet. • High cumulative net income. • Low employees’ compensations. • Three standard companies already in the region. OPPORTUNITIES THREATS • We are they only standard-luxury company. • Market shows potential good trends. • Monopoly in market R. • Royal Absolute Airlines in top 3. • Phoenix and Blue Wings in markets D and E. • Skyline in routes 6F, 14F, 29F. • Flash in route 16F. • High prices pressure. • Increase in fuel price, cost per mile, insurance. • Considerable marketing pressure. • Volatile demand.
- 6. Recommendations SHORT TERM LONGTERM • Focus on advertising (Q9 & Q10) & promotion (Q11) . • Giving priority to internal employees rather than external people for new jobs positions. • Keep the capital leasing. • Maintaining our $0,39 ticket price. • Keep the trend of positive net income. • Considerably increase our Cash. • Increase passenger load on markets F & R. • Reach break even point in 4D, 7E & 14F. • Strengthen our brand notoriety/awareness. • Continue to be the best employer of the industry. • Maintain our 0% employee turnover. • Increase our total market share to 25%. • Be the leader in market F & R. • Enter market A. • Close markets D & E. • Keep our Standard luxury strategy. • Get positive cumulative net incomes • Pay dividends. • Reduce operating costs. • Increase our stock price.
- 7. Operations: Aircraft Schedule Aircraft TypeQuarter AircraftDaily Flights Total Miles max Miles Embraer Brasilia 1 1 4 1 580 2000 2 2 7 3 020 4 000 3 2 9 3 780 4 000 Embraer ERJ135 4 2 12 4 800 4 800 5 2 12 4 780 4 800 6 2 11 4 780 4 800 7 2 10 4 400 4 800 8 2 11 4 820 4 800 0 1,000 2,000 3,000 4,000 5,000 6,000 1 2 3 4 5 6 7 8 Total Miles max Miles
- 8. Fleet Decisions Quarters Decisionstaken 0 Sell 3 Beechcraft 1900 Lease 1 Embraer Brasilia 1 Lease 1 Embraer Brasilia 2 Keep our 2 leasing Embraer Brasilia 3 Terminate to lease 2 Embraer Brasilia Capital Lease of 2 Embraer ERF 135 4 Keep our 2 capital lease Embraer ERJ 135 5 Keep our 2 capital lease Embraer ERJ 135 6 Keep our 2 capital lease Embraer ERJ 135 7 Keep our 2 capital lease Embraer ERJ 135 8 Keep our 2 capital lease Embraer ERJ 135
- 9. Maintenance 0 1 2 3 4 Maintenance Decisions (cost$ per aircraft per quarter) Maintenance Decisions (cost $ per aircraft per quarter) 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 Passenger Service Costs ($) Maintenance Costs ($)
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- 11. Fuel General Increase: 0,14USD Average Increase: 0,02 USD Assumed Increase: 0,02 USD 0 0.2 0.4 0.6 0.8 1 1.2 1.4 Q 0 Q 1 Q 2 Q 3 Q 4 Q 5 Q 6 Q 7 Q 8 Fuel Spot Price Fuel Contract
- 12. Operating Expense -1,000,000 -500,000 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 1 23 4 5 6 7 8 9 Operating Expense Operating Profit and Loss -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 1 2 3 4 5 6 7 8 9 ROAD in %
- 13. Load Factor 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 1 23 4 5 6 7 8 9 Load Factor Break Even
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- 19. Market Share Absolute, 16.27% Phoenix , 16.21% BlueWings, 18%Skyline, 10.72% UFC, 19.14% Flash, 19.66%
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- 26. 100% Market Sharein routes 19F, 17R and 20R
- 27. Market Flights Available seats Seats sold Passenger Load BreakevenVariation Fare 4D 2 74 41 55,40% 60,04% -4,64% One month 6F 1 37 23 62,20% 60,04% 2,16% One month 7E 2 74 42 56,80% 60,04% -3,24% One month 14F 1 37 21 56,80% 60,04% -3,24% One month 16F 1 37 23 62,20% 60,04% 2,16% One month 17R 1 37 28 75,70% 60,04% 15,66% One month 19F 1 37 25 67,60% 60,04% 7,56% One month 20R 1 37 28 75,70% 60,04% 15,66% One month 26F 1 37 24 64,90% 60,04% 4,86% One month
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- 29. Training Budget 1000 2000 4333 10500 14750 16250 20167 23333 26333 1000 2000 2000 2000020000 22000 24000 24000 27000 0 5000 10000 15000 20000 25000 30000 Q0 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Average Industry Training Budget Absolute Budget
- 30. ROI of HRBudget Q0 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Average Industry ROI 21.23 -64.97 -27.54 -12.46 -10.21 -0.50 7.34 4.05 2.99 Absolute ROI 21.23 -185.47 -284.21 -28.08 -41.73 -5.75 14.38 7.04 6.31 -350.00 -300.00 -250.00 -200.00 -150.00 -100.00 -50.00 0.00 50.00 100.00 Absolute ROI Average Industry ROI
- 31. Finance: Evolution of NetIncome & Gross Revenues -1,500,000 -1,000,000 -500,000 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 Q0 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Evolution Gross Revenues Net Income
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- 35. CDs 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 1800000 Q1 Q2 Q3Q4 Q5 Q6 Q7 Q8 Invested in CDs Net cash of Quarter
- 36. Balance Sheet Efectivo $85,785 Inversionesa corto plazo $0 cuentas por recibir $596,304 Activos Circulantes Totales $682,089 Coste Aeronave $2,500,000 Menos Depreciación -$800,000 Neto Aeronave $1,700,000 Instalaciones/Equipo-Neto $100,000 Total Activos Fijos $1,800,000 Total Activos $2,482,089 cuentas por pagar $344,070 Préstamos a Corto Plazo $150,000 Total actual de pasivos $494,070 Préstamos a Largo Plazo $300,000 Pasivo Total $794,070 acciones comunes $1,500,000 Beneficio Acumulado $188,019 Total Capital $1,688,019 Total Pasivo & Capital $2,482,089
- 37. P&L Ingresos Brutos$1,490,761 100.0% − Comisiones $135,659 9.1% − Reembolsos $119,260 8.0% + Ingresos por Intereses $0 0.0% Ingresos Netos $1,235,842 82.9% Operaciones de Vuelo $293,299 19.7% Combustible $225,253 15.1% Mantenimiento $254,192 17.1% Servicio al Pasajero $195,532 13.1% servicio de comida de cabina $0 0.0% Seguro $10,260 0.7% Gastos de Marketing $5,000 0.3% añadir Compensación Empleados $0 0.0% Calidad y Formación $1,000 0.1% Contratación/costos de entrenamiento $24,000 1.6% presupuesto de labor social $0 0.0% Coste de Investigación de Mercados $31,000 2.1% Gastos de Intereses $10,500 0.7% Pago Alquiler $0 0.0% Gastos Administrativos $100,000 6.7% Depreciación $48,750 3.3% Otros Gastos $0 0.0% Gasto Total de Operaciones $1,198,786 80.4% Pérdida/Ganancias Operativa $37,056 2.5% Beneficios Netos Carga $0 0.0% Otros Ingresos $0 0.0% Beneficios Antes de Impuestos $37,056 2.5% Menos Impuestos sobre la renta (40%) $14,822 1.0% Beneficios Netos $22,234 1.5% dividendos pagados $2,000 0.01/sh
- 38. Cash Flow Statement efectivoa principio de periodo $93,521 redención de CD $0 ingresos brutos (60%) $894,457 cuentas por recibir $427,018 acciones vendidas $0 recursos de préstamo $0 otros ingresos $0 ingreso de efectivo totales (a) $1,414,996 comisiones + reembolsos $254,919 gastos operacionales (70%) $805,966 cuentas por pagar $245,504 impuestos sobre la renta $14,822 pago de préstamo $6,000 compra de CD $0 dividendos $2,000 compra de maquinaria $0 total de salida de efectivo (b) $1,329,211 efectivo neto (a)-(b) $85,785 préstamo de sobregiro $0 efectivo al final de periodo $85,785
- 39. Dividends -2500000 -2000000 -1500000 -1000000 -500000 0 500000 Q0 Q1 Q2Q3 Q4 Q5 Q6 Q7 Q8 Cummulative Net Income
- 40. Stock Price $- $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 $50.00 Q0 Q1Q2 Q3 Q4 Q5 Q6 Q7 Q8 Stock price