...MEMO TO: Scott Topping, Director of Finance DATE: March 31, 2009 SUBJECT: Blended Winglet Project In order to calculate Southwest’s expected future cash flows from the Blended Winglet project we made specific decisions in setting the cash flows. First, we assumed that the cost of a Winglet is $700,000 per pair. Additionally, we assumed initial costs of: installation downtown per plane of $5,000, an installation cost of $56,000, and a facility modification cost of $1,200. Since costs were expected to rise 3% over the extended life of the project, we calculated this 3% inflation rate into restricted runways savings, which in year one started at $500, and we calculated the 3% inflation rate into maintenance costs, which in year one were estimated at $2,100. Since the rise in costs of 3% applied to all costs except fuel, we assumed over the life of the project that fuel savings from incorporating the winglets was $142,800 each year. The deprecation over the life of the winglets was determined using the 7-year MACRS method. However, the Job Creation and Worker Assistance Act of 2002 allowed for an additional 50% of the project to be depreciated in the first year. The depreciation schedule used for the Winglets project is illustrated in Appendix 1. With a marginal tax rate of 39%, the final net income over the life of the project is also given in Appendix 1. The expected future net cash flows were then found from summing the above costs and savings and adding back in depreciation...
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...BU 7535 Project Description Due: Monday, February 15, 2016 20% of Module Grade (Note: Email the project to me at simkins@okstate.edu) PART 1 (70% of Project): Read “Chapter 23 Southwest Airlines: The Blended Winglet Project” of the textbook for the project details. Answer the following questions and submit this file with your answers typed into this file, along with your Excel files showing your work. Send a separate Excel file to show the analysis in Question 7.) Use the template provided on Blackboard to do this analysis. Use this Excel file to do your work. It will also help you in setting up the base case analysis. Remember that you are to do the analysis on a per jet basis, as I mentioned in class. Hint: The base case NPV for the project is $260,980. (1) Describe the four phases of the Project Evaluation discussed in the case. Explain why all four phases are important to fully understanding the project analysis. Phase 1: engineering assessment, establish the safety and maintenance effects of the Winglet technology, estimate the maintenance cost and downtime of each aircraft for the installation of winglet Phase 2: flight operations assessment, to verify the cost saving data, fuel saving and additional lift capacity Phase 3: facilities assessment, assess from a facilities point of view to estimate the cost to reconfigure the airport terminals Phase 4: finance department assessment, calculate the official cost of the project, fill in project authorization...
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...Reducing Airline Fuel Consumption and Cost Fuel costs have become a major percentage of total airline operating costs. Fuel accounts for roughly 40% of total operating expenses and for U.S. carriers it totaled $47.3 billion last year (Grose, 2013). In an attempt to reduce such high costs, airlines have implemented a variety of fuel saving strategies. Weight Reduction Weight reduction is a major concern for airline fuel savings. Every aspect of aircraft design is looked at from a weight/safety standpoint. Below are a few of the most novel approaches to weight reduction that airlines have implemented in the past few years. Phasing Out Paper In 2011, United and Continental pilots began using 1.5lb iPads as electronic flight bags to replace the traditional 38lb paper flight manuals. The projected fuel savings was calculated to be 326,000 gallons of jet fuel for a savings of $1.2 million per year (United Continental Holdings Inc., 2011). This year, American Airlines received regulatory approval for flight attendants to swap out their 5lb paper manuals for 1lb Samsung tablets for a fuel savings of $650,000 per year (Dastin, 2014). While there is a large upfront capital cost for the purchase of thousands of tablets, this is offset by no longer having to print millions of sheets of paper each year for manuals. As for in-flight magazines, Singapore Airlines has been experimenting with providing digitized content for its three magazines on long-haul flights....
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...Pioneers of Aviation Embry-Riddle Aeronautical University Aviation Legislation November 01, 2013 Abstract Man has always wanted to soar with the birds and take flight. A few great men and women have accomplished this task with great strides. Once heavier than air flight was proved to be a valid means of transportation, the technology accelerated at an astonishing rate. Every time we get onto an airplane, helicopter, or hot air balloon we have the pioneers of aviation to thank. These great people proved to the world that nothing was out of reach for the human race. Some gave their life in pursuit of this dream while others funded and supported those who were developing the technology. No matter what the role each of these played, we have to appreciate everyone. We would not be where we are today in aviation if it weren’t for these pioneers. Pioneers of Aviation Introduction From the very first flight of the balloon to the flight of the powered airplane, our early pioneers always looked to make changes for the better. Many of these ideas simply built upon ideas of individuals of the past. These great pioneers were from every part of the world, United States, England, France, Germany, and so many other places. They did not look at aviation as a reason to disagree but rather found that flight would help everyone equally. Balloons Joseph and Jacques Montgolfier are the brothers who invented and flew the first hot air balloon. Born in Annonay, France, they...
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...CASES IN FINANCIAL STRATEGY Professor J. Schallheim FOR CASE BRIEFS: The answers to the following preparatory questions are not necessary or sufficient for your Case Briefs. Rather, the questions are to serve as a guide for your group discussion of the cases and a help to getting started on each case. Your final solution the case and recommendations should not necessarily be limited to the answers to these question or the assumptions in the case. FOR INDVIDUAL ASSIGNMENTS: For individual assignments, you must answer the questions labeled “Memo.” Individual Memo for Rapid Repair Auto Parts Rapid Repair’s profitability appears good but their cash balance has shrunk. Write a report that provides a financial analysis and summarizes their current situation (Hint: ratios and cash flow analysis). What changes do your recommend, if any, in 2013? Preparatory Questions for Horniman Horticulture Horniman’s profitability appears good but their cash balance has shrunk just like the previous case. Write a report that forecasts the financial outlook for 2006 (including forecasted income statement and balance sheet). How much external funds are needed (EFN), if any, for 2006? Preparatory Questions for Panera Bread Company 1. Complete the financing portion of Panera Bread Company’s 2007 forecast financial statements, and provide a forecast for the next 5 years. A worksheet has been provided for this purpose. As an initial (base case) analysis...
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...Southwest Airlines Good morning, everyone. Our presentation focuses on the question that is what are the key policies, procedures, operating practices, and core values underlying Southwest’s efforts to implement and execute its low-cost/no frills strategy? Today, my partner Liang Ting and I will do the presentation, and other 2 of our group members involved in searching the information and writing some related note. I will talk about the introduction and its key policies, procedures, operating practices;will talk about the core values and conclude the presentation. Introduction: Southwest Airlines Co. (NYSE:LUV) is an American airline based in Dallas, Taxas. Southwest is the largest airline in the United States, based on domestic passengers carried, as of June 30, 2010. Southwest operates more than 3400 flights a day, as of March 2011, utilizing a fleet of 547 Boeing 737 aircraft. Southwest Airlines has been a strong growth company over the last 35 years. Low cost is the key to its success. The Southwest’s execution of its low-cost/no frills/low fares strategy is underpinned by some critically important policies, procedures, operating practices, and core values. Southwest Airlines’ key policies are low costs, low fares, frequent flights and fast expansion into new cities. The company has also been favored because it has entered into hedge contracts for low cost fuel. This has been falling. The company has the operating practices of efficient operations, lower costs and...
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...An Investment Analysis of Southwest Airlines for Embry Investment Group Kenneth O’Connor Embry-Riddle Aeronautical University, Worldwide Table of Contents Tables and Figures 3 Abstract 3 Introduction 3 Why this Analysis was Done 3 The Limitations of this Report 4 Background Information on Southwest Airlines 4 Analysis Methodology 4 Short Conclusion 5 Supporting details and data 5 The Financial Reasons to Invest in Southwest Airlines 5 An Assessment of Southwest Airlines Past Performance 5 2013 Financial Statistics 6 An Assessment of Southwest Airlines Future Performance 7 The Numbers 7 The Logical Reasons to Invest in Southwest Airlines 8 Aircrew 8 Ground crew 8 Aircraft maintenance 9 Business administration 9 A short Timeline of Southwest’s Fleets Major Upgrades 10 Conclusion 12 Glossary 13 Appendix A 14 Detailed Graph Creation 14 Appendix B 15 Additional Information on Southwest Airlines and AirTran Airways 15 Southwest Airlines' Recognitions 15 Appendix C 17 About Red Rock Biofuels 17 Appendix D 18 The stock price data from my father 18 References 19 Tables and Figures Figure 1. 9 Year Closing Price $ 5 Figure 2. 1 Year Closing Price $ 6 Figure 3. Southwest and AirTran destinations 15 Abstract Dallas-based Southwest Airlines is in their 44th year of service, and with 41 consecutive years of profitability, they continue to be one of the most admired airlines in the world. This...
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...Case 3 Southwest Airlines business-level strategy was cost leadership. They have employed numerous ways to reduce cost while still providing great service for their loyal customers. The best evidence of this strategy was the decision to use one type of aircraft which cut out expenses such as maintenance, tools, and parts to name a few. The implementation of blended winglets and the use of EcoPower engine wash, which saved the company millions, were also good indicators of a cost leadership strategy. Southwest Airlines has the capability to operate at a high profit margin. The company’s high profit margin of 4% is a direct result of the business-level strategy. Southwest Airlines was able to successfully lower costs in all the right places, and as a result, had the highest profit margin of all the airlines. Not only did they have the highest profit margin, but they also had the highest ROA of 1.2%, nearly double the closest competitor. Southwest Airlines competitive advantage is their ability to make a profit and successfully lower costs which is directly related to their cost leadership strategy. Southwest’s net income has increased each year from $484 million in 2005 to $499 million in 2006 and $645 million in 2007, they are also the only company besides JetBlue with a positive profit margin in 2008. Southwest is able to provide a low price flights, while maintaining low costs, and exceptional customer service in a presence of strong competitive forces. These...
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...ZumBrunnen Date: December 8, 2014 M8 Module 8 – Aviation National and International Laws and Regulations, and Environmental Issue LOB 4 Explain the impact of environmental issues and environmental laws in the aviation industry Web Support link: http://www.nbaa.org/advocacy/issues/environment/ Minimizing the industries environmental impact. The aviation community has led the way in promoting advances aimed at reducing its environmental footprint for many years. Aviation emissions only make up a fraction of all of the transportation emissions, while business aviation makes up an even smaller fraction of that. As an example of something to reduce emissions and optimize aircraft performance and flight range over a decade ago winglets were introduced into general aviation. This equipment also contributed to more efficient fuel burn and is now in place on a large number of general aviation aircraft. In addition, the industry continues to reduce engine emissions by applying new technologies, which means that today’s aircraft engines are cleaner, quieter, and more fuel-efficient than ever. Operational improvements advanced by business aviation also have resulted in national airspace system efficiencies that help the environment. Over two years ago, NBAA members began equipping aircraft, at their own cost, with cockpit technology allowing for reduced vertical separation minimums (RVSM), effectively doubling the system’s airspace capacity. In spite of this impressive...
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...Chili Dip Nonya Chap Chye 20 Bukit Ba tok Crescen t, #13-02 E nter pris e Centr e S in gapore 6580 80 Tel: 6323 64 45 Sales@c asser ole.c om.sg GST Re g. No: M9035 8258C Biz Reg. No: 52919962 M CASSEROLE CATERING SERVICES Noodle And Bee Hoons Stir-Fry Bee Hoon Vegetarian Delight Sambal Mee Goreng Stir-Fry Egg Noodle Hong Kong Style Xiao Bai Chye in Superior Soya Sauce Stir-fry Cauliflower with Shrimps & Mushrooms Baby Kai Lan with Assorted Mushrooms Fried Savoury Seafood Stir-fry Sambal Sting Ray Butterfly Prawns Serve with Fruit Mayo Dip Deep Fried Fish Fillet with Sweet & Sour Sauces Stir-fry Black Pepper Squid Indonesian Style Achar Fish Fillet Vegetarian Spring Rolls Mini Potato Curry Samosa Curry Flavoured Chicken Winglets Home-made Ngoh Hiang Stuff with Water Chestnut Cottage Sweet Potato Rolls serve with Dip Poultry Nonya Chicken Curry Roast Honey Glazed Chicken Dessert Honey Dew Sago Longan Bean Curd with Cocktail Bobo Chacha (HOT) Stir-fry Chicken with Asian Spices & Herbs Shrimp Paste Chicken Breaded Chicken Cutlet with Lemon Sauce Grass Jelly Longan with Lemon & Lime Tropical Fresh Fruits Platter Drinks Ice Lemon Tea Please circle 1 item from each Category & 2 items from Tofu & Greens. Complimentary Fresh Fruits Platter for 80 pax & above. Delivery charges of $30.00 waived for 60 pax & above. Orange Squash Tropical Fruit Punch Barley Drink Fax: 6 223 52 46 Menu is @ $12/ pax for less than 30 people. (Min 25) Customer Fax...
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...1. 1.1 2. 2.1 2.2 2.3 2.4 3. 3.1 3.2 3.3. 3.4. 4. INTRODUCTION................................................................................................. 2 OBJECTIVES ................................................................................................... 3 GROUND EFFECT AERODYNAMICS.............................................................. 4 CHORD DOMINATED GROUND EFFECT ................................................... 4 SPAN DOMINATED GROUND EFFECT....................................................... 5 AERODYNAMIC CENTERS IN GROUND EFFECT..................................... 6 AERODYNAMIC EFFICIENCY IN GROUND EFFECT ............................... 7 EKRANOPLANS.................................................................................................. 9 CONFIGURATION LAYOUT ......................................................................... 9 POWER AUGMENTATION RAM (PAR)..................................................... 12 LONGITUDINAL STABILITY...................................................................... 14 LATERAL STABILITY ................................................................................. 15 1. INTRODUCTION Wing-in-ground effect applies to vehicles design to fly at very low altitudes to take the advantage of increased in aerodynamic lift and reduced drag which occurs when a wing is in ground effect. The phenomenon of ground effect was observed as early as the Wright Brothers’ Wright Flyer I which...
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...Herb Kelleher, co-founder of Southwest Airlines said, “Think and act big and grow smaller, or think and act small and grow bigger (Herb Kelleher Quotes…).” Marketing is an important part to selling a brand. In 2012 the Social Media Agency, “Likeable Media,” named Southwest Airlines in their top five most likeable companies (Five Most Likeable…). Likeable Media commends the airline for its passion for their employees as well as their customers. This in turn creates a passionate staff that encourages Southwest’s brand and helps it to grow. Southwest has been around for thirty nine years and has used multiple marketing strategies to grow their company. Herb Kelleher and Rollin King founded Southwest Airlines in 1971, flying to San Antonio, Houston, and Dallas. The company pioneered many marketing strategies that are still used today. Southwest offered the frequent miles program is the mid 1980’s, the first airline to enact the program. Passengers were able to save up the amount of miles they flew to fly for free or a discounted ticket. Southwest was also the first to offer senior citizen discounts on airline tickets. By 1984, Southwest was ranked first in customer service for four years in a row. In 1987 the company bought out TranStar Airline, and also Morris Air in 1994. After twenty five years, the company was rated the fifth largest United States air carrier, flying over fifty million passengers a year (Southwest Airlines). Marketing is very competitive between airlines,...
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...1. Most low-cost carriers operate aircraft configured with a single passenger class, and most operate just a single type of aircraft. (Reduce the training and maintenance cost.) 2. Aircraft often operate with a minimum set of optional equipment, keeping the weight of the aircraft lower and thus saving fuel. 3. Seats do not recline and do not have rear pockets, to reduce cleaning and maintenance costs. 4. No window shades. 5. Most do not offer reserved seating, hoping to encourage passengers to board early and quickly, thus decreasing turnaround times 6. Some allow priority boarding for an extra fee in lieu of reserved seating, and some also allow only the emergency exit rows to be reserved, again at an extra cost. The emergency exit seats have longer leg room. 7. many low-cost carriers develop one or more bases to maximize destination coverage and defend their market. Many do not operate traditional hubs, but rather focus cities. 8. Airlines often offer a simpler fare scheme 9. luggage is not transferred from one flight to another, even if both flights are with the same airline. This saves costs and is thought to encourage passengers to take direct flights. 10. Low cost carriers generate ancillary revenue from a variety of activities, such as à la carte features and commission-based products. Some airlines may charge a fee for a pillow or blanket or for carry-on baggage. AirAsia for example, generates revenue by courier services and hotels as...
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...Effects of Quality Management on Domestic and Global Competition Carletta Whiting MGT/449 December 19, 2011 Timothy De Long Effects of Quality Management on Domestic and Global Competition Quality management is the “management activities and functions involved in determination of quality policy and its implementation through means such as quality planning and quality assurance including quality control” (www.businessdictionary.com). Whereas, the “total quality management is a holistic approach to long-term success that views continuous improvement in all aspects of an organization as a process and not as a short-term goal” (www.businessdictionary.com). Consumer satisfaction is determined by the quality of products and services a company gives to consumers, which determines if the organizational objectives were achieved. This dissertation will compare and contrast two companies one international (Lufthansa Airlines) and the second national (Southwest Airlines). Southwest Airlines executed a strategy constructed to achieve a favorable outcome for the organization. The calculated plan starts with the directive to contribute to each aspect of the business: consumers, technology, facilities, and aircrafts. Southwest Airlines plan to gather consumer devotion by offering low cost merchandise and amenities for corporate America and for vacationing individuals seeking to cut cost. The strategy offers a less expensive value to consumers who do not have resources to use other...
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...Economic Analysis of Southwest Airlines Facilitator: James Young MGT: 513 Managerial Economics October 14,2012 Economic Analysis of Southwest Airlines History of Southwest Airlines History and Key Defining Moments Southwest Airlines was founded in 1966 when a group of Texas investors pooled together 560,000 to form the Air Southwest Company, incorporated in 1967 the company was envisioned as a commuter airline serving the cities of Texas, Dallas, Houston and San Antonio. Although the Texas Aeronautics Commission (TAC), the body responsible for overseeing aviation within the state granted the company permission to fly the routes requested in February 1968, three competing airlines filed suits to prevent the airlines form getting off the ground. An attorney, who stake in the company was a mere 20,000, took the case all the way to the U.S. Supreme court and in December 1970 this court ruled in the favor of Air Southwest. Early in 1971, Air Southwest changed its name to Southwest Airlines, the fledgling airline began operations on June 18, 1971 under the stewardship of President M. Lamar Muse, the airline offered six daily roundtrip flights between Dallas and San Antonio, and twelve daily roundtrip flights between Dallas and Houston. The start of service in June 1971 was accomplished with three 737-200 aircrafts that had been obtained from Boeing on favorable terms, and a fourth aircraft was obtained in September of 1971. The rest of 1971 and 1972 saw operating...
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