Air Tex Aviation
Assignment 2 – AirTex Aviation | |
Is AirTex really broke? Why or why not?
Is AirTex really broke? Why or why not?
Ted Richards and Frank Edwards recently graduated from Harvard Business School. Both wanted to start their own business, therefore they decided to purchase Air Tex Aviation, a fixed-based operation at San Miguel Airport in Texas, which was going bankrupt. Besides AirTex there are seven other fixed-base operations at San Miguel Airport, serving Center Country, Texas – one of the most rapidly growing communities in the nation. According to Ted and Frank AirTex shows a lot of potential, leading to a possible company grow rate of 20% p.a. in the first five year period. They purchased the stock of the company for $100K. Ted and Frank made use of the option to buy facilities under their market value. They were therefore able to sale and lease-back the facilities in order to raise the $500K for working capital. All in all AirTex had a total of $515K in the bank. Due to losses onsales in the fiscal year1989 the company left a negative net worth. Frank calculated that they would run out of money within three months. If Ted & Frank are able to reorganize the company within this time, AirTex has a chance to survive.
What are the key activities that are driving AirTex’s success in business?
What are the key activities that are driving AirTex’s success in business?
The company conducted activities through six informal departments: 1. Fuel line activity
The fuel activity encompassed five operations: a. Retail Fueling b. Wholesale Fueling c. Fuel Hauling d. Rental Cars e. Tie-Downs
It is the largest and most important department at AirTex. Currently it is also the only department with a positive cash flow.
2. Flight training
The flight training activity is the 2nd largest department in terms of sales but still generated loss each year.. It is conducted in two types of operations: Flight School & Pilot Shop
3.
Is AirTex really broke? Why or why not?
Is AirTex really broke? Why or why not?
Ted Richards and Frank Edwards recently graduated from Harvard Business School. Both wanted to start their own business, therefore they decided to purchase Air Tex Aviation, a fixed-based operation at San Miguel Airport in Texas, which was going bankrupt. Besides AirTex there are seven other fixed-base operations at San Miguel Airport, serving Center Country, Texas – one of the most rapidly growing communities in the nation. According to Ted and Frank AirTex shows a lot of potential, leading to a possible company grow rate of 20% p.a. in the first five year period. They purchased the stock of the company for $100K. Ted and Frank made use of the option to buy facilities under their market value. They were therefore able to sale and lease-back the facilities in order to raise the $500K for working capital. All in all AirTex had a total of $515K in the bank. Due to losses onsales in the fiscal year1989 the company left a negative net worth. Frank calculated that they would run out of money within three months. If Ted & Frank are able to reorganize the company within this time, AirTex has a chance to survive.
What are the key activities that are driving AirTex’s success in business?
What are the key activities that are driving AirTex’s success in business?
The company conducted activities through six informal departments: 1. Fuel line activity
The fuel activity encompassed five operations: a. Retail Fueling b. Wholesale Fueling c. Fuel Hauling d. Rental Cars e. Tie-Downs
It is the largest and most important department at AirTex. Currently it is also the only department with a positive cash flow.
2. Flight training
The flight training activity is the 2nd largest department in terms of sales but still generated loss each year.. It is conducted in two types of operations: Flight School & Pilot Shop
3.