A trip to their

Strategic
Management
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Flight hosts :
Nazish Ghaus
Mahwish Agha
Arsalan Zubair
Shehla Khan

History of AirTran Airways

In 1992, the predecessor airline, ValuJet Airlines was founded
ValuJet Airlines started with two former Delta Air Lines' DC-9 aircraft
First commercial flight occurred between Atlanta and Tampa on October 26,
1993.
The airline was the first to launch ticketless travel in 1993.
In the spring of 1994, barely eight months after launching service between
Atlanta and three Florida cities, the airline went public by listing its stock on
the NASDAQ and trading under the ticker symbol VJET.
In late 1995, the airline placed an order to be the launch customer for the
Boeing 717. ValuJet was the youngest airline ever to serve as a launch
customer for an aircraft type.
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History of AirTran Airways

At the end of 1995, ValuJet was named as the top company in the famed
Georgia 100 as published by the Atlanta Journal-Constitution
and the airline posted high margins with a $67 million net profit
revenues of $367 million.
The publicly traded airline stock was increasing in value on a seemingly
weekly basis.
The original AirTran Airways, a Boeing 737 operator with service to/from
Orlando, was founded by AirTran Corporation, the holding Company of
Mesaba Airlines of Minneapolis, Minnesota, operating as a Northwest Airlink
carrier with hubs in Minneapolis and Detroit. In 1994,
AirTran Holdings purchased a start up 737 operator named Conquest Sun
and renamed the airline AirTran Airways.
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Guiding Principals
We celebrate bringing people together through:
Safety
Taking personal responsibility for the safety of each traveler and every Crew
Member.
Courtesy
Showing respect and providing caring customer service to travelers and Crew
Members.
Pride
In our work, in one another and in contributing to the success of our airline.
Teamwork
Supporting one another and valuing our diverse contributions to meet every
traveler's needs.
Innovation
Acting with an empowered "can do" spirit to continuously improve our airline.
Cleanliness
Of work areas and our equipment says everything to our customers pick it
up, keep it clean.
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Our Values
A Total Commitment to Safety
In every decision and every action, every time, every day.
Compliance with Regulatory Standards
In every decision and every action, every time, every day.
Technical Excellence and Continuous Learning
We do it right, then we improve to do it better.
Honesty, Trust and Integrity
In all actions with one another, our suppliers and our customers.
Respectful Communication and Constructive Disagreement
To get to the best result, together.
Personal Responsibility for Resolving Issues
We do not pass the buck or quit on a Crew Member.
Acting with Purpose and Urgency
We make decisions to do the right thing and then act on it.
Profit
We deliver a sustainable profit to support the growth and improvement of
our company.
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Our Values
A Total Commitment to Safety
In every decision and every action, every time, every day.
Compliance with Regulatory Standards
In every decision and every action, every time, every day.
Technical Excellence and Continuous Learning
We do it right, then we improve to do it better.
Honesty, Trust and Integrity
In all actions with one another, our suppliers and our customers.
Respectful Communication and Constructive Disagreement
To get to the best result, together.
Personal Responsibility for Resolving Issues
We do not pass the buck or quit on a Crew Member.
Acting with Purpose and Urgency
We make decisions to do the right thing and then act on it.
Profit
We deliver a sustainable profit to support the growth and improvement of
our company.
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Our Values
A Total Commitment to Safety
In every decision and every action, every time, every day.
Compliance with Regulatory Standards
In every decision and every action, every time, every day.
Technical Excellence and Continuous Learning
We do it right, then we improve to do it better.
Honesty, Trust and Integrity
In all actions with one another, our suppliers and our customers.
Respectful Communication and Constructive Disagreement
To get to the best result, together.
Personal Responsibility for Resolving Issues
We do not pass the buck or quit on a Crew Member.
Acting with Purpose and Urgency
We make decisions to do the right thing and then act on it.
Profit
We deliver a sustainable profit to support the growth and improvement of
our company.
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AirTran Airways Ranking

The airline was ranked second in overall quality "The
year of new planes, new people, and new
determination. IAT association CEO, Giovanni
Bisignani.
Airlines

2008 Rank

2007 Rank

AirTran

Delta

12

10

JetBlue

SouthWest

3
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Mission
Innovative people dedicated to
delivering the best flying experience to
smart travelers. Every day.

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Strategies
Low cost strategy:
Company-wide emphasis on Cost controls
Higher labor productivity
Highest Asset Utilization

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Strategies
Area : Narrow geographic area ( the eastern United
States)
Target Market: Business and Leisure Travelers
Aircraft types: Only two ( Boeing 737, 717 jets)
Major Hub: Atlanta Hartfields Airport (62% daily
flight)

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Strategies
Food for sale on flights (Kraft food snacks)
Ancillary (optional) fees:
Pets
Alcoholic drinks
Excess baggage
Un-accompanied minors

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Objectives
Remain profitable despite increased fuel
prices
To satisfy the transportation needs of our
target customers, but also to provide
customers with a travel experience worth
repeating.
Minimize rising expenses while increasing
revenues

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Suggested Mission
Innovative, vital, impervious, and
customer oriented firm striving to
service smart travelers. Every day.

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Competitive Intensity
Wi-Fi services
Operational flights daily
Oil hedging

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Drivers
Operating cost
Fuel prices
Ascillinary revenues

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AirTran Airways EFE

Key External Factors
Opportunities

Weights

Rating

0.0 to 1.0

1 to 4

Weighted Score

Decrease operating cost per ASM

0.18

0.36

Increase US presence

0.15

0.45

Increase international presence

0.11

0.11

Increase select AQR rating

0.05

0.10

Add customer technologies to fleet

0.03

0.6

0.2

0.6

High fuel cost

0.14

0.42

Increasing labor cost

0.06

0.12

Political policies

0.04

0.16

Labor strikes

0.04

0.16

Threats
Increased competition

Totals

3.11

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AirTran Airways IFE

Key Internal Factors

Weight
s

Rating

0.0 to
1.0

1, 2, 3
or 4

Weighted Score

Internal Strengths

Remaining profitable

0.18

0.72

High service quality

0.14

0.56

High plane utilization

0.11

0.44

Large airport presence

0.07

0.21

Young airline fleet

0.03

0.09

Internal Weaknesses

High operating cost

0.18

0.18

Concentrated to east USA

0.10

0.20

Strictly domestic flights

0.09

0.18

Low ratings to select AQR categories

0.04

0.08

3 or 4

1 or 2

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Strategic Analysis TOWS Matrix

TOWS Matrix
(Airtran Airways)

Opportunities

Threat

Strength

Weakness

Lets talk now

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Financial Ratio Analysis

KEY RATIOS

AIRTRAN

INDUSTRY

2008

2007

Current Ratio

0.82 X

0.15 X

2.5 X

0.79 X

0.12 X

1.50 X

-3.01

2.31

2.5 X

1.24 X

1.26 X

1.25 X

53.56%

53.40%

58%

14.20%

28.61%

22.07%

-3.32%

7.60%

7.45%

Quick Ratio

Interest Coverage Ratio(ICR)

Total Asset Turnover

Debt to Total Asset Ratio

Gross Profit Margin

Operating Profit Margin

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Strategic Analysis Space Matrix

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(Contd)

AirTran is competing fairly well in this turbulent and

profitable unstable industry
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Possible Alternative Strategies

Recommendations
Domestic Expansion (Strategy)

Create networks at various major tourist airport Hubs such

as those in the Pacific, and Mountain regions of the United
States of America
Increase the number of promotions, and packages to new,
untapped markets in the Pacific, and Mountain regions of the
country
Estimated cost: $295 million (includes increased advertising
for flights to new domestic regions

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Thank you for

flying with
Air tran

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