8-2 Executive Summary_ Safety Issues in Company B

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Southern New Hampshire University *

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Feb 20, 2024

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8-2 Executive Summary: Safety Issues in Company B Christina H. Mitchell Southern New Hampshire University MBA620 Measuring Success in an Organization Prof. Alin Tomoiaga
8-2 Executive Summary: Safety Issues in Company B TransGlobal Airlines (TGA) seeks expansion in the Caribbean market through the acquisition of smaller aircraft charter companies. In evaluating potential targets, safety issues were identified in Company B, influencing our acquisition considerations. This summary outlines safety concerns, their impact on Company B, implications for our evaluation, and the consequent effect on our acquisition recommendation. Safety Concerns Overview: Company B experienced two recent aircraft groundings due to technical issues, including an FAA safety violation. Remediation efforts incurred an $80,000 cost increase and a 10% revenue drop, with negative customer reviews. Broader Impact Beyond Revenue: The recurring safety incidents within a short timeframe raise concerns about a potential systemic problem. Safety malfunctions may lead to further FAA violations, attracting fines and impacting customer trust. The aged fleet may necessitate significant expenses for repairs or fleet renewal, affecting revenue and customer retention. Effect on Performance Analysis: Company B already faced challenges, including an aging fleet, high turnover, and financial struggles.
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