1 as a result of not wanting to compromise the quality service costs a
1. As a result of not wanting to compromise the quality
service, costs, and reputation of GoGo airlines, the company
strategically developed MegaSaver Airways to compete the
rising budget airlines occupying 40% of shares in the air travel
A. In starting the new airline, strategic decision includes
addition of medium and long-haul flights whilst changing
ticket price to economical price while achieving the lowest
cost of production and reducing operational costs to improve
market positioning and staying in a competitive advantage. To
help reduce the operational costs in the starting phase,
MegaSaver should operate flights with same air fleet type and
should carry used/leased vehicles.
Tactical decisions include introduction of more economy
seats and removal of in-flight systems to lessen the cargo
load, which can also lessen fuel costs. From my previous
experience, operating on same fleet model can also reduce
maintenance and technical, training, and staff costs as they
are dependent on the license and training on carrier type.
Operational decisions include shorter layover/transit time in
different regions, a compromise of comfort involving number
of luggage checked in, seat classes, service and amenities
wherein these items can be purchased separately.
B. In a highly volatile environment, CEO will face unforeseen
events within operations leading to cost of resources,
fluctuations of profitability that often affects the
attractiveness in investments (Guerra et al., 2021). The
suggested solution includes strategic planning and control
and financial strategic decisions.
C. NPV can be used for long term financial decision since it
considers all the cash flows and the time value of money.
Furthermore, NPV is a logical approach to valuing productive
and economic asset (Atrill & McLaney, 2021),
What are the possible challenges of using NPV technique in
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