This 5 page paper looks at the case of Mid-Continual airline supplied by the student and answers five questions. These look at if an offer for sale should be accepted or a loan taken out to boost the business, the development of a short term strategic plan, examination of the market they should be serving, consideration of what aircraft they should acquire and looking at other critical issues for the company.
Name of Research Paper File: TS14_TEmidcont.rtf
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becoming weary of the continual fight to survive then the second option, where the company is sold to a holding company may be attractive, this is a good price that
gives the them a profit and also allows them to move onto other things. However, this should only be taken if walking away is desirable and they do not feel
that they could increase the profit with the use of the loan. The offer of the loan would allow the company to increase the number of aircraft, which is currently
three, with useful leasing agreements which can be accost effective method of expanding the company. If capital leases were used this would also be reflected in the asset base of
the company. The increased equipment and bolster to working capital would allow more flights to be made at the critical times and would allow the company to take advantage of
the gaps created by other airlines pulling out some of the smaller demand flights. There also appear to be a number of other measures that could be undertaken to
increase the demand and as such increase profit, such as the dual designation status, that would reduce some of the costs even though there would a percentage go to the
airline, such as Delta, but this could also stimulate demand and has been proven to work for other companies. There is also the potential to cut costs in terms of
the HRM recruitment with some better retention strategies. Therefore, of the management want to maximise their profit then staying with the company and taking the loan may be the
best option, this would allow them to retain control of the company, even though the bank would have 30% of the stock, and as such turn it around. If for
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