MBA 620 Risk Assessment of TransGlobal Airlines

Perform a risk assessment for TransGlobal Airlines and write a report describing the results.

Specifically, you must address the following rubric criteria:

+Identification : Identify two risks the company is facing, including at least one high-impact risk.
– Identify the balanced scorecard component each risk corresponds to.
– Classify the risk based on these two types:
-Operational
-Strategic
+Evaluation : Determine whether the probability and impact of each identified risk is low, medium, or high. Justify your evaluation of the impact and probability of each risk.
+Mitigation : Recommend a possible risk-prevention or mitigation strategy for each identified risk.

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: $20.683 billion
• Annual net income: $2.099 billion
• Adjusted earnings per share of $3.22, a 28% 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.