Spreadsheet: 624636d1558001377-excel-wont-let-me-click-on-the-cell-i-want-exam-planner
Sheet: AM

TPE Planner - AM |  |  |  |  | BIG PICTURE/ PURPOSE |  | Notes to remember/include |  | Ethical issues to carry forward to PM
 |  |  |  |  | 2. What's going on? |  | We want to provide general business advice and become trusted advisors
4. Timing | Normal |  | Time up to |  | Me | Henrick | Working in advisory
Reading | 50 |  |  |  | Boss | Kirsten | Recommendations
Planning |  |  |  |  | Who do I work for? | PJAE LLP | Making travel easy at low cost with no compromise on service, safety or quality
Req 1 | 20 |  |  |  | Company | EA | Operational excellence, selling made easy & fast, low cost operating model
Req 2 | 40 |  |  |  | Client | Lara, CEO | 13 years- settled
Req 3 | 30 |  |  |  | Date | 27 Oct Yr16
Req 4 |  |  |  |  | Industry | Airlines
Req 5 |  |  |  |  | 3. Active reading. Financials-  trends/ movements, unusuals (high/low), profit/loss, B/S (debt, cash, assets)
Presentation | 10
Running total
Hardcoded total | 150
1. Requirement - what are they - structure? | Deliverable and recipient |  | Identify - WHAT IS THE ISSUE, WHY IS IT AN ISSUE, WHAT IS THE IMPLICATION, WHAT DO WE RECOMMEND? |  |  |  |  | Timing
1 | Briefing paper for [NAME] to use later |  | Reducing cost base
 | Financial and operational implications of moving HO to romania |  | Speaking language? Different culture?
 |  |  | Currency? Hedging?
 |  |  | Barriers to entry: competition, Entry costs/economies of scale • Product differentiation • Access to distribution channels • Effects of experience curve on cost advantage • Government regulation
 |  |  | HO- who will move to Romania? Good management team atm. Do they have families? Won't be willing to uproot?
 | RECOMMENDATION |  | Renting in Romania- Romania contract law?
 |  |  | ECON AND CULTURAL
 |  |  | BARRIERS TO ENTRY
2 | Briefing paper for [NAME] to use later |  | Maintenance costs have increased by 5% (2.75m)- old aircraft.
 | Whether to buy or lease future aircraft |  | one 180 seater, rest 156 seaters.
 | As set out in board minutes extract |  | 12 aircraft, one owned, one on ST lease and 10 on 20 year leases.
 |  |  | Increase in fuel prices
 | RECOMMENDATION |  | Aging fleet- average age 15.2 years old.
 | Risk and reward perspective |  | Option 1: 156 seater aircraft- pay 2,650k for 20 years (total cost 53m). Initial non refundable deposit of 5300k (10% of 2650 x 20 years). CA available. All maintenance costs with lessee
 | Tax & FR implications |  | Option 2: 156 seater aircraft, 3.5m per year plus all maintenance costs. Total cost 35m. All maintenance costs with lessee. Over 10 years- get new aircrafts more frequently. CA available
 |  |  | Option 3: debt/equity financing to purchase outright. 156 seater is 42m, 180 seater is 44m.  All costs lie with EA and may also have bank charges. Plc- could issue more shares but this is time consuming and expensive, as well as keeping up with more admin. Then depreciates after 20y. Is it operational excellence to be riding in 20 year old plane?
 |  |  | Option 4: yearly cost of 7m per year including all maintenance costs and insurance. Equal to 70m over 10 years.
 |  |  | Maintenance costs equal to 55m per annum for 12 aircraft, or 4.6m each.  Equal to 45,833 per annum so 70m-35m=35m- saving 10m over 10 year life of contract on maintenance costs.
3 | Briefing paper for [NAME] to use later |  | 21% increase in number of passengers
 | Current financial position and consideration of strategic recommendations |  | Strong management team
 |  |  | Increase UK market share by 20% from 15/16, expand the routes, drive demand, uphold reputation by acting with integrity, ensure longevity even at expense of ST gains
 |  |  | Fuel costs really high- equivalent to 28% of total revenue
 |  |  | Why is the average revenue per customer going down- £82 in 14/15, £74.70 in 15/16? Was top quartile. Now not.
 | RECOMMENDATION |  | But profit per passenger after tax increasing- £6.28 in 15/16 and £4.98 in 14/15. COS going down proportionally?
 |  |  | Edinburgh to Paris closed- goes against strategic aim of wanting to increase number of routes
 |  |  | New routes very popular
 |  |  | No increase in price paid for premium aircraft arrival slots - significant penalties if cease to fly in first 28 months of 3 year contract (i.e. 2 yrs 3 months)
 |  |  | Premium slots not fully utilised all year around is £3.25m
 |  |  | maximum increase in charges of 0.5% pa for baggage/check in staff costs except one supplier, who wants significant increase. Negotiate?
 |  |  | Owned aircraft is 18 years old- is this safe? Avergae aircraft age is 15 years old. Upgrade?
 |  |  | New aircraft with 16% increase in seats fully utilised. Have a look at the busiest routes and do this
 |  |  | Flying below the  industry average- 10.5 hours per day
 |  |  | 85% flights arrived on time- 5% below best in class, cost implications?
 |  |  | Hedges 60-80% at next 12 months. Hedge for longer to save on costs- lower admin