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2011 STUDENT CASE COMPETITION The Student Case Competition is sponsored annually by IMA® to provide an opportunity for students to interpret, analyze, evaluate, synthesize, and communicate a solution to a management accounting problem. TransGlobal Airlines By Shane Moriarity, Laura Hopkins, and Andrew Slessor “We are facing a major change in our firm’s operating environment,” the CEO of TransGlobal Airlines declared at the opening of a hastily called executive committee meeting. “We need to adopt a survival strategy, now! Noah built the ark when the weather was fine. He didn’t wait for the rain to come.” 44 44 S T R AT E G I C F I N A N C E I August 2010 T ransGlobal Airlines is the government-owned,…show more content…
Similarly, we serve only one city in each of our international destinations. The competitive change that will occur is that the reciprocal carriers will be offered ‘beyond rights’ so they can serve any of our destinations. This right will include carriage of passengers from one domestic city to another. The offer of ‘beyond rights,’ of course, will be subject to our gaining similar rights in the corresponding international market. “In my opinion, we have one of two ways to go. We can try to be a major, full-service carrier, or we can focus on being a low-cost carrier for our local markets. We need to Figure 1: TransGlobal Airlines Route Map CDG FRA ROM WIN LHR IST BLA LOV BUR PLE SOF VLD RUS VTA NES GAB VAR PLO JAM SIL KAR MAS SUM SLI International Route 46 S T R AT E G I C F I N A N C E I August 2010 TOL TAR Large-City Route Regional-City Route Table 1: TransGlobal Airlines Daily Flight Schedule ALL FLIGHTS OPERATE 365 DAYS PER YEAR HOME CITY SOF DESTINATION ONE-WAY DISTANCE (MILES) MARKET SEGMENT* EQUIPMENT** ANNUAL PASSENGERMILES-FLOWN (MILLIONS) ROUND-TRIP FLIGHTS PER DAY CDG 2,800 I JJ 1 480.3 FRA 2,500 I JJ 1 465.3 IST 1,800 I JJ 1 329.8 LHR 3,200 I JJ 1 630.7 ROM 1,200 I JJ 1 223.3 WIN

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