Premium Essay

Airtex Aviation

In: Business and Management

Submitted By tu245
Words 344
Pages 2
AirTex Aviation
The purchase Ted Richard and Frank Edwards were best friend and both graduated from Harvard Business School. Because of personal goals, they decided to operate business together. They spent $100,000 to purchase Airtex Aviation that was lower than the market value.
Airtex Aviation prior to purchase Airtex was on of eight fixed-base operations at San Miguel Airport that composed of six informal departments.
-Fuel line activity: Will Leonard, who had no experience and appropriately diploma, managed Fuel line department. Moreover, the fuel line activity composed of five different operations: Retail Fueling, Wholesale Fueling, Fuel Hauling, Rental Cars and Tie-Downs.
-Service and parts: Carl Green, who had appropriately abilities and diploma, managed entirely service activity.
-Flight training
-Avionics: Avionics was a single-person management department that was managed by Leon Praxis.
-Aircraft sales: Aircraft sales department was closed by mismanagement.
-Accounting: It was the major problem of Airtex Aviation. Sarah Arthur managed accounting department without any accounting training. Moreover, even though Sarah collected all financial information, she would not let managers know.
Reorganization Company There were three most important tasks that company needed to reorganize. (a) Revamping the management of AirTex (b) Installing a control system (c) Wresting Sarah Arthur authority
For cash management, Ted tried to limit Sarah’s work to other assistant. In addition, Ted gave every department the credit-granting authority and the responsibility that required each department manage their accounts receivable by themselves. Moreover, Ted established an Administration Profit Center that each department could easily control their expenses. For accounting system, AirTex started to require each department producing a profit and

Similar Documents

Premium Essay

Airtex Aviation

...Case Study: AirTex Aviation Background: AirTex Aviation was a fixed – base operation at San Miguel airport in Texas responsible for servicing the non-airline aviation market. The company was headed by Bill Dickerson and was close to bankruptcy. For the fiscal year of 1989 it made a loss of $500,000 on sales of $10M. Ted Richards and Frank Edwards purchased it on December 28, 1989 for $500,000. They knew each other from Harvard Business School and sought to find a business and turn it around using their expertise. Neither had any experience in the aviation market. The Business: The business that Frank and Ted purchased had several informal departments: 1. Fuel line activity – Headed by Will Leonard and consisting of 12 employees, operations generated revenue through retail fueling, wholesale fueling, fuel handling, rental cars and tie-downs (storage of air craft) 2. Service and Parts – Headed by Carl Green and consisting of 6 mechanics. Quality was high but department was inefficient. 3. Flight Training – Managed by Roy Douglas and consisting of 7 instructor pilots and three dispatchers, operations generated revenue through flight training and the pilot shop which sold flight supplies. 4. Avionics - Had a single employee, Leon Praxis, who repaired radios and electronic navigational equipment. 5. Aircraft Sales – AirTex had been a dealer of Piper Aircraft. AirTex became unable to finance the aircraft, fired the salespeople and closed the department...

Words: 557 - Pages: 3

Premium Essay

Airtex Aviation

...Gaspard Virgile Lafitte Pierre Vally Kevin AC 503 E MANAGEMENT CONTROL FALL 2008 Take-Home Case Study: AirTex Aviation Table of contents Table of contents......................................................................................................................2 Executive Summary .................................................................................................................3 Issue statement ........................................................................................................................4 Data analysis............................................................................................................................5 Key Decision Criteria................................................................................................................6 New control system implemented ............................................................................................7 Recommendations .................................................................................................................10 Action and implementation plan .............................................................................................11 2 Executive Summary Two managers recently graduated purchase Air Tex Aviation, a firm on the verge of bankruptcy. In front of the discrepancies of the current control system, Ted Richards and Frank Edwards decide to implement a system which improves transfer pricing, cost allocation...

Words: 2332 - Pages: 10

Free Essay

Airtex Aviation

...Case 2: ATLANTIC HOME LOAN Marjorie Marques Management Control Systems Mr. Stephen Del Vecchio January 24, 2014 1. The devices (control) used by Al Fiorini before he went back to school were: * To find a person who should execute his work in the company Atlantic Home Loan (AHL). It is a personnel/cultural control in my opinion because Al decided to delegate his work to a person who had the same thoughts that labor matters. For this reason, Al chose Joe Anastasia because Joe was an employee of the AHL with a lot experience in financial matters. Therefore, Al decided to make a verbal agreement of partnership with Joe. However, Al realized just a few days before going to school in Los Angeles, to be chosen by Joe Anastasia for his partnership was a bad idea because Joe had an alcohol problem and it began to influence Joe’s attendance at work. * Al decided to choose an action control when he talked with Joe about this problem, and Al communicated his rules, policies, procedures and codes of conduct. However, this control had no results expected, and then Alex decided to break the verbal agreement of partnership with Joe. Therefore, Al paid money and broke the verbal agreement of partnership with Joe. The devices (control) used by Al Fiorini after he went back to school were: * Al needed to choose another person in place of Joe. Al found a person named Wilbur Washington. I think it is a personnel/cultural control because, again, Al decided to delegate his...

Words: 577 - Pages: 3

Premium Essay

Case Study Airtex Aviation

...School of Business University of Southern California AirTex Aviation Teaching Note Purpose of Case This case was written to illustrate a basic control system choice. Two young and inexperienced MBA graduates purchase a small aviation company that is in financial trouble. If the company will survive, it will do so only with tight management of cash and new accounting and control systems. The company also needs to make better operating decisions. However, the new owners do not know the business well, so they cannot either centralize authority or be very prescriptive to the line managers as to how to run their operations. As a consequence, they design a new control system that makes each operating department a profit center. With coaching of department managers about good business practices, they manage the business on a decentralized fashion and provide the department managers with incentives for generating good results. The case raises a number of issues that managers face in setting up such a decentralized control system. These include issues of autonomy, cost allocations, and transfer pricing. Suggested Assignment Questions 1. Did AirTex need a new control system at the time of the takeover? 2. Evaluate the control system that Frank and Ted implemented. Should anything have been done differently? Case Analysis Does AirTex Need a New Control System? A reasonable way to start the discussion is to ask, “How is AirTex doing?” Exhibit 2 in the case shows the income for the 4...

Words: 2513 - Pages: 11

Premium Essay

Airtex Aviation Case Study

...AirTex Aviation 1. Did AirTex need a new control system at the time of the takeover? * “The management system that was in place was one woman who magically kept everything in her head. There was limited and almost incomprehensible formal system.” Sarah Arthur, the company’s accountant, had complete autonomy over the company’s information, and she kept this information private. * AirTex was in need of a more formalized accounting system, since accounting was a central department of the company, and profitability was a key measure to ensure the success of the company at the time of the takeover. * Also, Ted and Frank had plans to dispose of Sarah Arthur, who was acting manager upon their arrival. However, given her central role within the company for 20 years, she possessed a plethora of information, which was undocumented and she retained in her head * AirTex should make an effort to document and provide proper procedure for all major processes. It will ensure that knowledge is not lost with the departure of key personnel. However, Ted and Frank should be cautious about “rubbing people the wrong way”, especially their employees who have worked at the company for 10+ years. These individuals will be the most resistant to change and will perceive Ted and Frank as new and disruptive. * Managers were unaware of their department’s profitability. It was kept very secretive by Sarah Arthur, the accountant. As a result, managers didn’t know how big their...

Words: 1109 - Pages: 5

Free Essay

Hospitality Management

...Air Transpor 1069917 5 May 2011 SFT 1007-1011 Introduction to air transport The impact of recession in air transport(passengers demand, economic cycles, current developments) The reports covers the entire aviation industry and will include the recession aspect and its consequences on the passengers demand, the economic cycle and also on the current developments. 1.0 Introduction One of the biggest international industries, the air transport, has the largest sensitivity on the economic crisis. That crisis hit and still continues to effect the populations, industries and economic growth in developed and developing countries. Every sector has been effected by the crisis, every industry has had a reaction and an immediate research for solutions. Instability of revenue and expenditure in the airline industry was effected from the global change. That for is easy to deduce that these reactions are different from each other. This in according to available founds, resources and differences in management. 2.0 Impacts on demand The demand aspect, is a factor that shows us the relationship between population and economic crisis. In fact, the perception of crisis brings different fears and uncertainty in people. Thus leading to an increase of the overall savings, with consequences under the economic factor, with less expenditure incurred by each person. This is one of the things that influenced more directly the airline industry, with a sharp drop in demand. Taking...

Words: 1312 - Pages: 6

Free Essay

Aeronautical Term Paper

...Name: Jacob 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...

Words: 311 - Pages: 2

Free Essay

Term Paper

...NATIONAL AVIATION UNIVERSITY Air Transportation Management Department TERM PAPER On discipline“Basis of systems theory and management” Topic: «Airport as a complex system on the example of Boryspil» Kyiv 2012 NATIONAL AVIATION UNIVERSITY Department of air transportation organization TASK for course paper preparation student Roksolana Novytska Topic of the term paper: “Airport as a complex system”_______________________ 1. Period of term paper preparation: since ________2012 year till_______2012 year. 2. Stages of term paper preparation: * … 3. The task was given by________________________________(_______________________) (signature) (name) “______”____________2012year. 6. The task taken for solving _____________________ (signature of student) The term paper grade ______________________________________ The head of the commission: ________________________________________________”___”__________2012 year. Members of the commission: ___________________________________________________________ Abstract Total volume of course work is 37 pages. Contains 22 figures and 5 references. The aim of the thesis is to investigate Boryspil airport in terms of Systems analysis course. The work includes theoretical studies of all aspects...

Words: 9002 - Pages: 37

Premium Essay

Business Environment

...might have a highly positive cross elasticity of demand with the market for cars? Describe its impact on the market for cars. (12 marks) 2. Describe and show the effects on equilibrium market price and output in the weekly market for newspapers of the following: (a) a decrease in printing costs (b) an increase in consumer income. (c) a substantial reduction in the price of iPads (6 marks each) 3. Why are cigarettes taxed so heavily? Explain using demand curve analysis. (8 marks) Part B (50%) The Aviation Industry: Annual Data The data file gives the figures for aviation in the UK from 1980 to 2010 * Air Transport movements: the number of aircraft take-offs and landings [ measured in thousands] * Terminal Passengers: the number of passengers arriving and departing UK airports [measured in thousands] The data can be found in the excel file labeled BMAM700 assignment 1 Aviation data available on blackboard. Required: Using the data set described above 1) Derive the value of the correlation coefficient between “air transport movements” and “terminal passengers”. 2) Derive a scatter graph to show the relationship between the two variables; terminal passengers and air transport movements. 3) Determine the coefficient of determination and the regression equation linking “air transport movements” and “terminal passengers” 4) Use your regression...

Words: 447 - Pages: 2

Free Essay

Manaager's Perspective; Aviation Maintenance

...Aviation Maintenance from A Manger’s Perspective Lisa A. Williams Embry Riddle Aeronautical University Management 203 Christopher Urdzik April 26, 2015 Abstract This paper explores aviation maintenance from a Manager’s perspective. There are various governing bodies that control or oversee how maintenance is performed on a routine basis for commercial aircraft. The main governing body that is discussed here is the FAA. Also discussed is the required training of the Airframe and Powerplant mechanic and how management can be assured that mechanics are qualified to release aircraft after performing maintenance certifying these aircraft are safe to fly. Also, in this paper, the attempt is made to show where mechanics need ongoing training to assure management that the mechanic is trained on new technologies that are developed and used in commercial and corporate aviation. The answers are not mapped out by the FAA or training programs so it is up to the company to be sure that the mechanic is made aware of these new technologies through FAA study groups that managers can attend and brief technicians on new developments. Human error cannot be eradicated it is indispensable fact of the human behavior (Maddox, 1998). Although, aviation maintenance managers have acquired high levels of technological skills training related to their profession, the above statement from Dr. Michael Maddox is true in regards to human error. Research in the industrial...

Words: 707 - Pages: 3

Free Essay

The Imapact of General Aviation

...Air Transportation Management The Impact of General Aviation General aviation is considered one of the three main segments of the aviation market. The other two being commercial aviation and military aviation. General aviation operations are anything other than military and common carriage. Without general aviation, the industry would suffer in countless ways, possibly even collapse. General aviation includes, literally, every other civilian job except for the few related to the airline sector. What I consider the most important ones are aerial firefighting, flight instructing, pipeline patrol, corporate, bush piloting, agricultural, and test piloting. Flight instructing is one of the most important jobs that there is in the aviation industry. It is where pilots obtain the proper training and skills necessary to be safe and adequate. I believe flight instructing is most likely the most underrated and underpaid job in the aviation industry. Without this job, all pilots would have to come from the military, which would cause a severe shortage of pilots. Pipeline patrol requires pilots to fly aircraft at very low altitudes over varying terrain to observe pipelines and check for any problems or vandalism within the lines. Another type of this job is for pilots to patrol the U.S. borders in search for illegal activities. Without either of these general aviation jobs, more resources and man hours would be required to check oil pipelines and secure our borders. Corporate flying...

Words: 631 - Pages: 3

Free Essay

Crj 200 Limitations

...CRJ 200 Limitations STRUCTURE 1. Max Ramp Weight 53,250 lbs 2. Max T/O Weight 53,000 lbs 3. Max Landing Weight 47,000 lbs 4. Max Zero Fuel Weight 44,000 lbs 5. Min Flight Weight 30,000 lbs 6. Min Ops Weight 25,480 lbs 7. With Cargo 45 minutes to airport if cargo compartment has fire before structural failure 8. Max Cargo 3500 lbs ALTITUDES & TEMPERATURES 1. Max Operational Altitude 41,000 ft 2. Max T/O & Landing 10,000 ft 3. Max OAT T/O & Landing ISA + 35°C 4. Min OAT T/O -40°C 5. Runway Slope Grade ± 2% 6. Max Tailwind 10 kts ENGINE (CF34-3A1 / CF34-3B1) ITT 1. Max ITT, APR Not Operating: First 2 minutes 900°C (red) Next 3 minutes 884°C (red) 2. Max ITT, APR Operating: First 2 minutes 928°C (red) Next 3 minutes 900°C (red) 3. Max Continuous Thrust (3A1) 860°C (red) 4. Max Continuous Thrust (3B1) 874°C (red) 5. Max Start 900°C (red) OIL TEMPERATURE 1. Min Start -40°C (green) 2. Max Continuous 155°C (amber 3. Max (15 Min) 163°C...

Words: 988 - Pages: 4

Premium Essay

Agreement for Transparent

...A I R R U T T E R I N T E R N AT I O N A L AIRCRAFT MANAGEMENT PROPOSAL A I R R U T T E R I N T E R N AT I O N A L 4310 Donald Douglas Dr. Long Beach, CA 90808 s Phone: 562-425-8880 s eFax: 562-683-0382 s Email: info@arijets.com s www.arijets.com “Making your corporate aircraft ownership experience a smooth flight.” P R O P O S A L Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Air Rutter International Management Overview . . . . . . . . . . . . . . . . . . . . . 5 N S M A N A G E M E N T T A I R C R A F T Aircraft Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 s Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 s Scheduling and Dispatch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 C O T s Crew Services and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 N E s Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 s Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 s Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 s Aircraft Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 s Additional Professional...

Words: 2199 - Pages: 9

Premium Essay

People

...Have you ever wanted to build something as a kid? Has a kite ever flew by your mind? Building a kite from scratch is not only easy but awesome to learn! Although, building a kite isn't always easy you can always learn from building from scratch. Kites are easy to learn how to build and also easy to learn how to fly as well. It’s good to know how to build a kite because it’s easy to experiment with. You can build kites many different ways, many different ways can be how you want to build it and how you want them to look like. Second, kite building is not only for kids, it’s for everyone. Kites are meant for stunting, flying, fighting, and used for other activities. You can build a kite however you want. If you want your kite for regular flying you can build it for that specific activity. If you want your kite for stunting you can build it for that too. You can build a kite for anything you need it for. Kite history, in the history of flight, the first lighter-than-air balloon and the first powered aircraft are very recent when compared with the age of kites. The exact date and origin of the kite is not known but it is believed that they were flown in China more than two thousand years ago. One legend suggests that when a Chinese farmer tied a string to his hat to keep it from blowing away in a strong wind, the first kite was born. The earliest written account of kite flying was about 200 B.C. when the Chinese General Han Hsin of the Han Dynasty flew a kite over the...

Words: 374 - Pages: 2

Free Essay

Prevention Fod on Runways

...Runways RSCH202- Intro to Research Methods Muhd Ridwan Bin Abdul Malek Embry-Riddle Aeronautical University Contents Introduction3 A Brief Literature Review3 Research Questions4 Theoretical Framework4 Hypotheses5 Study Design5 Population and Sample 6 Variables and Measures6 Data Collection6 Data Analysis Methods 7 Actual Sampling and Data analysis8 Reference 9 Introduction Foreign Object Debris (FOD) has been a problem in the aviation industry. It is important to prevent FOD as it can affect the economic cost for airlines (McCreary, 2008), severe damages on turbine blades (Mehdi 2014) and shallow indentions can developed to a fatigue crack (Chen, 2001). The focus will be on preventing FOD on runway as it is the most important area to monitor in terms of safety aspects (McCreary, 2008). It is also important to examine the preventions in placed and its effectiveness within the organization. A Brief Literature Review Previous research done to prevent FOD has shown that there are several preventions lay out in the aviation industry. Some of them would be by training, inspection as well as maintenance (Bachtel 2008). For training, workers in the airport should receive training in identification as well as removal of FOD. This includes the potential consequences of overlooking it. Training is effective when the importance of safety is emphasis to personnel and passengers, direct and indirect cost of FOD. Procedures should be present in order to remove or eliminate...

Words: 1695 - Pages: 7