Rait Kalda, vice president of operations for AS Estonian Air, confronted a challenge should Estonian Air address planned increases in intra-European flight demand in light of high fuel costs, economic uncertainty, competitive challenges, and last year's net loss? If Kalda's evaluation resulted in enlarging Estonian Air's fleet, he needed to decide which airplane model would realize operational efficiencies, fill load factor requirements, and fulfill various other performance and financial metrics. In order to completely understand the challenge of Kalda, the case presents the reader with a brief synopsis of Estonia's economy; the airline business; and the three kinds of competitive airline sector groups- low cost carriers, legacy carriers, and regional carriers. This really is followed by a summary of Estonian Air's opponents and its chances for growth. The case provides comprehensive information concerning the advantages and disadvantages of a used Saab 340A Turboprop, the Bombardier Q400 Turboprop, and the Boeing 737 Jet. Finally, the case summarizes Estonian Air's internal evaluation and growth strategy, with input signal that is relevant from dialogs between Rait Kalda and also the vice president of government and finance, Andrus Aljas.
Students have to complete an operational evaluation on factors for example utilization rates, fuel savings, and capacity. Using current financial statements, together with information presented in the case, pupils can also prepare a fundamental net present value (NPV) model and scenario analysis for leasing every one of the aircraft alternatives. Eventually, students have the chance to combine both qualitative and quantitative factors to support their analysis.
PUBLICATION DATE: December 01, 2011 PRODUCT #: NA0135-HCB-ENG
This is just an excerpt. This case is about INNOVATION & ENTREPRENEURSHIP
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