airtran airways presentation (final)

8/10/2019 AirTran Airways Presentation (Final)

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A trip to their

StrategicManagement

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Flight hosts :

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Nazish Ghaus

Mahwish Agha

Arsalan Zubair

Shehla Khan


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History of AirTran Airways

In 1992, the predecessor airline, ValuJet Airlines was founded

ValuJet Airlines started with two former Delta Air Lines' DC-9 aircraft

First commercial flight occurred between Atlanta and Tampa on October 26,

1993.The airline was the first to launch ticketless travel in 1993.

In the spring of 1994, barely eight months after launching service betweenAtlanta and three Florida cities, the airline went public by listing its stock onthe NASDAQ and trading under the ticker symbol VJET.

In late 1995, the airline placed an order to be the launch customer for theBoeing 717. ValuJet was the youngest airline ever to serve as a launchcustomer for an aircraft type.


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History of AirTran Airways

At the end of 1995, ValuJet was named as the top company in the famedGeorgia 100 as published by the Atlanta Journal-Constitution

and the airline posted high margins with a $67 million net profit

revenues of $367 million.The publicly traded airline stock was increasing in value on a seeminglyweekly basis.

The original AirTran Airways, a Boeing 737 operator with service to/fromOrlando, was founded by AirTran Corporation, the holding Company of

Mesaba Airlines of Minneapolis, Minnesota, operating as a Northwest Airlinkcarrier with hubs in Minneapolis and Detroit. In 1994,

AirTran Holdings purchased a start up 737 operator named Conquest Sunand renamed the airline AirTran Airways.


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Guiding Principals

We celebrate bringing people together through:Safety Taking personal responsibility for the safety of each traveler and every CrewMember.Courtesy

Showing respect and providing caring customer service to travelers and CrewMembers.Pride In our work, in one another and in contributing to the success of our airline.Teamwork Supporting one another and valuing our diverse contributions to meet every

traveler's needs.Innovation Acting with an empowered "can do" spirit to continuously improve our airline.Cleanliness Of work areas and our equipment says everything to our customers pick itup, keep it clean.


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Our Values

A Total Commitment to Safety In every decision and every action, every time, every day.Compliance with Regulatory Standards In every decision and every action, every time, every day.Technical Excellence and Continuous Learning We do it right, then we improve to do it better.

Honesty, Trust and Integrity In all actions with one another, our suppliers and our customers.Respectful Communication and Constructive Disagreement To get to the best result, together.Personal Responsibility for Resolving Issues

We do not pass the buck or quit on a Crew Member.Acting with Purpose and Urgency We make decisions to do the right thing and then act on it.Profit We deliver a sustainable profit to support the growth and improvement of

our company.


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Our Values




our company.


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Our Values




our company.


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AirTran Airways Ranking

The airline was ranked second in overall quality "Theyear of new planes, new people, and newdetermination. IAT association CEO, GiovanniBisignani.

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Airlines 2008 Rank 2007 Rank

AirTran 2 1

Delta 12 10

JetBlue 3 2

SouthWest 6 3


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Mission

Innovative people dedicated todelivering the best flying experience tosmart travelers. Every day.

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Strategies

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Low cost strategy:

Company-wide emphasis on Cost controls

Higher labor productivity

Highest Asset Utilization


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Strategies

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Area :Narrow geographic area ( the eastern UnitedStates)

Target Market:Business and Leisure Travelers

Aircraft types:Only two ( Boeing 737, 717 jets)

Major Hub:Atlanta Hartfields Airport (62% daily

flight)


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Strategies

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Food for sale on flights (Kraft food snacks)

Ancillary (optional) fees:Pets

Alcoholic drinks Excess baggage

Un-accompanied minors


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Objectives

Remain profitable despite increased fuelprices

To satisfy the transportation needs of our

target customers, but also to providecustomers with a travel experience worthrepeating.

Minimize rising expenses while increasingrevenues

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Suggested Mission

Innovative, vital, impervious, andcustomer oriented firm striving toservice smart travelers. Every day.

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Competitive Intensity

Wi-Fi servicesOperational flights daily

Oil hedging

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Drivers

Operating costFuel prices

Ascillinary revenues

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AirTran Airways EFE

Key External FactorsWeights Rating

Weighted Score0.0 to 1.0 1 to 4

Opportunities

Decrease operating cost per ASM 0.18 2 0.36

Increase US presence 0.15 3 0.45

Increase international presence 0.11 1 0.11

Increase select AQR rating 0.05 2 0.10

Add customer technologies to fleet 0.03 2 0.6

Threats

Increased competition 0.2 3 0.6

High fuel cost 0.14 3 0.42

Increasing labor cost 0.06 2 0.12

Political policies 0.04 4 0.16

Labor strikes 0.04 4 0.16

Totals 1 3.11


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AirTran Airways IFE

Key Internal Factors

Weight

s RatingWeighted Score

0.0 to1.0

1, 2, 3or 4

Internal Strengths 3 or 4

Remaining profitable

0.18 4

0.72

High service quality

0.14 4

0.56

High plane utilization0.11 4

0.44

Large airport presence

0.07 3

0.21

Young airline fleet

0.03 3

0.09

Internal Weaknesses 1 or 2

High operating cost0.18 1

0.18

Concentrated to east US

0.10 2

0.20

Strictly domestic flights

0.09 2

0.18

Lo! ratings to select "R categories

0.04 2

0.08


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Financial Ratio Analysis

KEY RATIOS AIRTRAN INDUSTRY

2008 2007

Current Ratio 0.82 X 0.15 X 2.5 X

Quick Ratio 0.79 X 0.12 X 1.50 X

Interest Coverage RatioICR! "3.01 2.31 2.5 X

#ota$ %sset #urnover 1.24 X 1.26 X 1.25 X

&e't to #ota$ %sset Ratio 53.56( 53.40( 58(

)ross *ro+t ,argin 14.20( 28.61( 22.07(

-erating *ro+t ,argin "3.32( 7.60( 7.45(


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Strategic Analysis Space Matrix


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(Contd)

AirTran is competing fairly well in this turbulent andprofitable unstable industry


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Possible Alternative Strategies


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Recommendations

Domestic Expansion (Strategy)Create networks at various major tourist airport Hubs suchas those in the Pacific, and Mountain regions of the United

States of AmericaIncrease the number of promotions, and packages to new,untapped markets in the Pacific, and Mountain regions of thecountry

Estimated cost: $295 million (includes increased advertisingfor flights to new domestic regions


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Thank you forflying with

Air tran

airtran airways presentation (final)

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