Accuracy assists in the merger and restructuring of three regional subsidiaries into one low-budget airline.
Context
A large French airline sought to merge its regional airlines into one company with a new business model. It also planned to reduce overall activity by 20% via route closures, disposals and lay-offs. We were asked to assess whether or not the project was viable by reviewing and adjusting a simplified BP and subsequently assist the company throughout the entire restructuring process.
How we helped
Our work was structured in four phases:
- Phase 1 – assessing project viability; preparing a simplified BP; simulating workgroups to define the future airline profile
- Phase 2 – developing the BP and cash forecasts further; analysing restructuring costs; participating in organisation workshops; preparing workers’ council negotiations
- Phase 3 – preparing the third version of the BP; adjusting the business plan to reflect new assumptions; modelling cash flows; presenting to the group’s financial directors; negotiating the restructuring measures further with the workers’ council; preparing documentation needed from the French Civil Aviation Authority
- Phase 4 – creating a project management tool helping the new airline to implement its cost reduction plan
Outcome
Modelling for an airline is complex as it is necessary to address and incorporate the following points: individually operated routes; the type of aircraft used; how many seats are available; how many trips per day; what load factor should be used; what the pricing strategy and economic environment should be; other issues such as how network use affects crew and maintenance costs, distribution costs, etc.
The main take away of this assignment was the ‘client-surrounding strategy’, where we built a very central position within the general management team. We performed services to complete the assignment, such as the creation of a project management tool to help the new airline implement its action plan. Our added value was being able to anticipate our client’s needs and position ourselves well to support them.
