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Sky Air Case Study

In: Business and Management

Submitted By brock09
Words 1034
Pages 5
Sky Air Inc.: Business Ethics Case
Brock A. Reeves
University of St. Thomas

Summary of the Case Study Sky Air Inc. was an airline with its head office in Idaho Falls. It came into being in 1986. Its founder, Samuel Kaplan, was once an air force mechanical engineer. Apart from his engineering background, Mr. Kaplan was also a talented golf player. Having been born and brought up in Idaho Falls, Kaplan found out that there was a gap in the airline industry there. He believed that the region needed an extra carrier bearing in mind that the only airline, Vixenne Air, was performing poorly. Other problems related to the services offered by Vixenne Air included ineffective services to the customers and violations of the air safety precaution. Kaplan realized that he was capable of running an efficient airline due to his wealth of experience in the air force coupled with his mechanical skills. Since the inception of the company back in 1986, Sky Air Inc. had grown gradually. In this case study, Mr. Kaplan wished to sell some shares of Sky Air Inc. to generate money to take care of his forthcoming triplets as his wife was expecting. The potential partner would only have a 30% stake in equity without any representation in the management board. The buyer, Thyestean Ventures, offered $6 million which Mr. Kaplan concluded was too low for a company such as Sky Air Inc.
Main Problem The main problem presented in the case study was the low buying price suggested by the potential buyer. Stacy Simms, managing partner of Thyestean Ventures’, makes it clear to Mr. Kaplan that Thyestean Ventures cannot pay more than $6 million for a 30% share of Sky Air Inc. Kaplan believed since he had consistent growth over the last ten years he should get a higher offer. In fact, Thyestean Ventures should have considered $20 million for the 30% equity shares considering profit increased...

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