Accuracy assists in the merger and restructuring of three regional subsidiaries into one low-budget airline.
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
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.