Use the information provided to you in the TransGlobal Airlines Information document to perform a business environment analysis using the PESTEL method. Your task is to analyze the internal and external business environment of TransGlobal Airlines by identifying the impact of each PESTEL factor on the business environment.
MBA 620 TransGlobal Airlines Company Information Location, size, and age of the firm:
•Name: TransGlobal Airlines
•Home Country: USA•HQ Location: Miami, FL
•Size: 40,000 employees
•Age: began operations in 1951 Customer segment and target market:
•Class: global airliner with dominant U.S. presence
•Market: global
•Destinations: 242 destinations serving 52 countries across six continents
•Market segment: first class, luxury, business class, and economy
•Global market share: 18% (ranked 2nd, American is number one at 18.6%)
•U.S. market share: 18.3% (ranked 2nd, Southwest first at 19.1%)
•Retention: 80% return customers
•New customer growth: 27% annually (prior to COVID)
•Passenger kilometers: 278 billion (American is number one at 287 billion)Major competitors:
•All international and domestic U.S. airlines Company leadership:
•Publicly held with a board, president, VP admin, CEO, CFO, COO, VP sales, division VPs, subsidiaries
Current financials:
•Annual gross revenues: $13.2 billion
•Annual net income: $1.5 billion
•Adjusted earnings per share of $2.31, a 30% increase year-over-year•Delivery of 88 new aircraft during the year
•Number of aircraft in fleet, end of period: 1,062
•Average age of aircraft: 13 years
•Domestic revenue grew 7.7% in the last quarter on 1.6% higher passenger unit revenue (PRASM) and 6% higher capacity. Domestic premium product revenue grew 11% and corporate revenue grew 6%, driven by strength in business and leisure demand through the holiday period. Revenue and margin improved in all domestic hubs, with revenue up 10% in coastal hubs and 6% in core hubs.
•Atlantic revenue grew 0.8% in the last quarter on 2.4% higher capacity and a 1.6% decline in PRASM, driven almost entirely by foreign exchange rates
•Latin revenue grew 6.7% on a 6.3% increase in unit revenue and 0.4% higher capacity. This revenue improvement was driven by continued double-digit unit revenue growth in Brazil and Mexico.
•Pacific revenue was down 0.5% vs. the prior year on a 4.4% decline in unit revenue primarily due to continued softness in China. This was a 3.2 point improvement vs. the September quarter on improved trends in Japan.Strategic Plans and GoalsThe Board of Directors has recently approved a comprehensive plan identified as TransGlobal 2030.
The plan is the result of eight months of data collection, customer focus groups, leadership retreats, and employee input.The TransGlobal 2030 Vision is to lead the industry in three critically important areas: safety, excitement, and stewardship (SES). This SES vision has been translated into a collection of guiding principles and goal statements:
•SES Principles oWe will always treat our customers with respect.
oWe will value our employees and business partners.
oWe will innovate to provide our customers with the most forward- thinking and exciting travel experience.
oWe will build lifelong relationships with our customers.
oWe will protect our planet.
•SES Goals
oSafely re- introduce and promote the MAX 737 aircraft1.
oExpand the fleet of regional aircraft with capacities below 70.
oUpgrade the reservation and ticketing experience, including smartphone apps and integration with apps associated with lodging, ground transportation, and attractions.
oAchieve top-10 status in the 2030 World’s Best Workplaces rankings (currently not ranked in top 100). oReach net-zero carbon footprint by 2075.
oAccelerate adoption of fuel-efficient aircraft and alternative fuels.
oExpand use of carbon offset measures. oImprove our Airlines.com safety rating from 5 stars to 7 stars.
oBuild brand awareness and customer loyalty.
oAddress workplace inequities and build an inclusive culture.
oTrain every employee in the basics of FAA’s SAS (Safety Assurance System) via 2-hour web-based training.
1 Note: The popular 737 aircraft has been the subject of considerable controversy and safety concerns worldwide.
ASSETS:
Current Assets:
•Cash: $2,882
•Cash equivalents: $1,565
•Accounts receivable: $2,854
•Fuel inventory: $730,592
•Expendable parts and supplies inventories, net: $521,463
•Prepaid expenses: $1,262
•Other expenses: $1,406
•Total current assets: $8,249•Property and equipment: $31,311
Other Assets:
•Operating lease right-of-use assets: $5,626
•Goodwill: $9,781
•Identifiable intangibles: $5,167
•Cash restricted for airport construction: $1,136
•Other noncurrent assets: $3,759
•Total other assets: $24,969
•Total assets: $64,529
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
•Current maturities of long-term debt: $2,287
•Finance leases: $1,518
•Current maturities of operating leases: $1801
•Air traffic liability: $5,116
•Accounts payable: $3,266
•Accrued salaries and related benefits: $3,701
•Accrued salaries related benefits: $3,287
•Loyalty program deferred revenue: $3,219
•Fuel card obligation: $ 1,075
•Other accrued liabilities: $1,078
•Total current liabilities: $20,204
Noncurrent Liabilities:
•Long-term debt: $8,873
•Finance leases: $8,253
•Pension, postretirement: $8,344
•Pension, post-retirement Related benefits: $9,163
•Loyalty program deferred revenue: $3,509
•Noncurrent operating leases: $5,294
•Deferred income taxes: $1,478
•Other noncurrent liabilities: $1,387
•Total noncurrent liabilities: $28,885 •Stockholders’ equity: $15,440
•Total liabilities: $64,529•Stockholders’ equity: $60,266Margins •Gross profit margin: 37.84%
•Operating margin: 14.078%•Net profit margin: 10.14% •Cash flow margin: 30.35%•Debt to equity: .0782
•ROE: 31.03%
•ROA: 7.08%
•Inventory turnover: 23.35%
•Receivables turnover: 16.47%
•Aircraft capacity: 98%
•Current ratio: 0.681
•Quick ratio: 0.3824
Description
Specifically, you must address the following rubric criteria:
Identify one political factor that can affect the company’s business environment and explain any potential impact on acquisition strategy.
Identify one economic factor that can affect the company’s business environment and explain any potential impact on acquisition strategy.
Identify one sociological factor that can affect the company’s business environment and explain any potential impact on acquisition strategy.
Identify one technological factor that can affect the company’s business environment and explain any potential impact on acquisition strategy.
Identify one environmental factor that can affect the company’s business environment and explain any potential impact on acquisition strategy.
Identify one legal factor that can affect the company’s business environment and explain any potential impact on acquisition strategy.
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