MBA 620 TransGlobal Airlines Information
\nLocation, Size, and Age of the Firm
\n\u2022 Name: TransGlobal Airlines
\n\u2022 Home Country: USA
\n\u2022 HQ Location: Miami, FL
\n\u2022 Size: 40,000 employees
\n\u2022 Age: began operations in 1951
\nCustomer Segment and Target Market
\n\u2022 Class: global airliner with dominant U.S. presence
\n\u2022 Market: global
\n\u2022 Destinations: 242 destinations serving 52 countries across six continents
\n\u2022 Market segment: first class, luxury, business class, and economy
\n\u2022 Global market share: 18% (ranked 2nd, American is number one at 18.6%)
\n\u2022 U.S. market share: 18.3% (ranked 2nd, Southwest first at 19.1%)
\n\u2022 Retention: 80% return customers
\n\u2022 New customer growth: 27% annually (prior to COVID)
\n\u2022 Passenger kilometers: 278 billion (American is number one at 287 billion)
\nMajor Competitors
\nAll international and domestic U.S. airlines
\nCompany Leadership
\nPublicly held with a board, president, VP admin, CEO, CFO, COO, VP sales, division VPs, subsidiaries
\nCurrent Financials
\n\u2022 Annual gross revenues: $20.683 billion
\n\u2022 Annual net income: $2.099 billion
\n\u2022 Adjusted earnings per share of $3.22, a 28% increase year-over-year
\n\u2022 Delivery of 88 new aircraft during the year
\n\u2022 Number of aircraft in fleet, end of period: 1,062
\n\u2022 Average age of aircraft: 13 years
\n\u2022 Domestic revenue grew 7.7% in the last quarter on 1.6% higher passenger unit revenue (PRASM)
\nand 6% higher capacity. Domestic premium product revenue grew 11% and corporate revenue
\ngrew 6%, driven by strength in business and leisure demand through the holiday period.
\nRevenue and margin improved in all domestic hubs, with revenue up 10% in coastal hubs and
\n6% in core hubs.
\n\u2022 Atlantic revenue grew 0.8% in the last quarter on 2.4% higher capacity and a 1.6% decline in
\nPRASM, driven almost entirely by foreign exchange rates.
\n\u2022 Latin revenue grew 6.7% on a 6.3% increase in unit revenue and 0.4% higher capacity. This
\nrevenue improvement was driven by continued double-digit unit revenue growth in Brazil and
\nMexico.
\n\u2022 Pacific revenue was down 0.5% vs. the prior year on a 4.4% decline in unit revenue primarily due
\nto continued softness in China. This was a 3.2 point improvement vs. the September quarter on
\nimproved trends in Japan.
\nStrategic Plans and Goals
\nThe board of directors has recently approved a comprehensive plan identified as TransGlobal 2030. The
\nplan is the result of eight months of data collection, customer focus groups, leadership retreats, and
\nemployee input.
\nThe TransGlobal 2030 vision is to lead the industry in three critically important areas: safety, excitement,
\nand stewardship (SES). This SES vision has been translated into a collection of guiding principles and goal
\nstatements:
\n\u2022 SES Principles
\no We will always treat our customers with respect.
\no We will value our employees and business partners.
\no We will innovate to provide our customers with the most forward-thinking and exciting
\ntravel experience.
\no We will build lifelong relationships with our customers.
\no We will protect our planet.
\n\u2022 SES Goals
\no Safely re-introduce and promote the MAX 737 aircraft1
\n.
\no Expand the fleet of regional aircraft with capacities below 70.
\no Upgrade the reservation and ticketing experience, including smartphone apps and
\nintegration with apps associated with lodging, ground transportation, and attractions.
\no Achieve top-10 status in the 2030 World\u2019s Best Workplaces rankings (currently not ranked in
\ntop 100).
\no Reach net-zero carbon footprint by 2075.
\no Accelerate adoption of fuel-efficient aircraft and alternative fuels.
\no Expand use of carbon offset measures.
\no Improve our Airlines.com safety rating from 5 stars to 7 stars.
\no Build brand awareness and customer loyalty.
\no Address workplace inequities and build an inclusive culture.
\no Train every employee in the basics of FAA\u2019s SAS (Safety Assurance System) via 2-hour webbased training.
\n1
\nThe popular 737 aircraft has been the subject of considerable controversy and safety concerns
\nworldwide.
\nASSETS (in millions)
\nCurrent Assets
\nCash and cash equivalents: $1,268
\n\u2022 Accounts receivable: $1,256
\n\u2022 Fuel inventory: $321
\n\u2022 Expendable parts and supplies inventories, net: $229
\n\u2022 Prepaid and other expenses: $559
\n\u2022 Total current assets: $3,629
\nOther Assets:
\n\u2022 Property and equipment: $13,776
\n\u2022 Operating lease right-of-use assets: $2,476
\n\u2022 Goodwill: $4,304
\n\u2022 Identifiable intangibles: $2,272
\n\u2022 Cash restricted for airport construction: $280
\n\u2022 Other noncurrent assets: $1,657
\n\u2022 Total other assets: $24,765
\nTotal assets: $28,394
\nLIABILITIES AND STOCKHOLDERS’ EQUITY
\nCurrent Liabilities
\n\u2022 Current maturities of long-term debt: $806
\n\u2022 Finance leases: $200
\n\u2022 Current maturities of operating leases: $352
\n\u2022 Air traffic liability: $2,251
\n\u2022 Accounts payable: $1,437
\n\u2022 Accrued salaries and related benefits: $1,628
\n\u2022 Loyalty program deferred revenue: $1.416
\n\u2022 Fuel card obligation: $ 324
\n\u2022 Other accrued liabilities: $474
\n\u2022 Total current liabilities: $8,888
\nNoncurrent Liabilities
\n\u2022 Long-term debt: $3,000
\n\u2022 Finance leases: $904
\n\u2022 Pension, postretirement Related benefits: $3,719
\n\u2022 Loyalty program deferred revenue: $1,544
\n\u2022 Noncurrent operating leases: $2,329
\n\u2022 Deferred income taxes: $641
\n\u2022 Other noncurrent liabilities: $610
\n\u2022 Total noncurrent liabilities: $12,747
\n\u2022 Total liabilities: $21,635
\nStockholders’ equity: $6,759
\nTotal liabilities and stockholders\u2019 equity: $28,394
\nMargins
\n\u2022 Operating margin: 14.08%
\n\u2022 Net profit margin: 10.14%
\n\u2022 Operating cash flow margin: 41.7%
\n\u2022 Debt to equity: 3.20
\n\u2022 ROE: 31.04%
\n\u2022 ROA: 7.39%
\n\u2022 Receivables turnover: 16.47%
\n\u2022 Aircraft capacity: 98%
\n\u2022 Current ratio: 0.408
\n\u2022 Quick ratio: 0.2839<\/p>\n","protected":false},"excerpt":{"rendered":"
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