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Transglobal

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Submitted By royaltywears
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2011 STUDENT CASE COMPETITION
The Student Case Competition is sponsored annually by IMA® to provide an opportunity for students to interpret, analyze, evaluate, synthesize, and communicate a solution to a management accounting problem.

TransGlobal
Airlines
By Shane Moriarity, Laura Hopkins, and Andrew Slessor

“We are facing a major change in our firm’s operating environment,” the CEO of TransGlobal Airlines declared at the opening of a hastily called executive committee meeting.
“We need to adopt a survival strategy, now!
Noah built the ark when the weather was fine. He didn’t wait for the rain to come.”
44
44

S T R AT E G I C F I N A N C E

I

August 2010

T

ransGlobal Airlines is the government-owned, national flag carrier of a small republic. While nominally a democracy, the country in which TransGlobal is located has been ruled by the same president for more than 40 years. During this time, tight controls were placed on all aspects of the economy. Increasingly, the country’s wealth was concentrated in the hands of a few powerful supporters of the president. The economy stagnated, and basic infrastructure fell into disrepair. Recent violent protests, however, have led the aging president to announce his retirement. He has scheduled an election to be held in three months’ time. At stake in the election will be the presidency as well as all the seats in the legislature.
Several political parties have been organized and are fielding viable candidates. All the major parties agree that opening the economy to competition is necessary for the country’s financial recovery.

The Current Situation
“As you know,” TransGlobal’s CEO continued, “we have enjoyed monopoly status on all domestic routes under the current government. That has made life pretty comfort-

able for us. Unfortunately, that also means we’ve served
our

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