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7 Performance Indicators

The strategies that will be devised for the company will attempt to seek one major goal;
1. Increase the handling capacity of the airlines.

The KPI’s for the following strategy would be;

Performance Indicators

Goal: Handling Capacity

Monitor the increase in the number of flights annually.

Monitor the increase in the number of passengers annually.

The increase in the number of airport hubs, hangars and other handling operations at airports.

Monitor the revenue generation for the year, and evaluate the increase percentage.

Monitor the increase in the fleet size of the airlines, and the total capacity of the fleet size.

8 Future Strategy

8.1 Overall Objective

Expanding of the Operational and Handling Capabilities of the Airlines

8.2 Strategy Type

Expansion Strategy

8.3 Direction

The strategy will attempt to increase the number of aircraft and passengers that the airline can accommodate.

8.4 Objective

The objective of the strategy is to raise sufficient capital to invest in expansion activities.

8.5 Strategic Implementation

The strategy will have several aspects to it as the expansion of an airline is a very extensive task. The overall selected strategy will have smaller components into it as well.

8.5.1 Organizing and Resourcing

The major objective of the strategy is to enable the organization to raise capital. As the expansion of the handling capacity of the organization cannot take place until it has enough capital to invest. The methods that would be used for that are two-fold.

8.5.1.1 Raising Equity

As the organization is not directly listed on the stock exchange, the only viable way for it raises its equity is through its parent company, Dart Group PLC. The group is a big organization, with a market cap of almost USD 1 billion. Jet2 airways cover the majority of the portfolio for the organizations. Hence, the equity would be raised through this organization (Dart Group, 2016).

Several airlines have utilized this strategy in the past, including big names like Lufthansa, Emirates, and the American Airlines. The method that would be utilized would be increasing the volume of shares in the market. The Dart Holdings group has a good market reputation, with the current share price hovering at a modest level (GBP 680). The current volume of shares in the market for the company is about 1.5 million (Dart Group, 2016). Hence the organization can only dilute the shareholder position by a small fraction and then release an additional amount shares in the market. The releasing of the shares would invite new investors, and the organization would be able to raise a sufficient amount of capital easily.

8.5.1.2 Control System

The control system for this part of the strategy would be the level of dilution versus the capital raised. If the organization is to dilute a greater part of the equity to raise a sufficient amount, then this strategy would be halted and would be referred to its other component.

8.5.1.3 Issuing Debt

The second option for the company and the preferred option under the strategy is to issue debt. Debt issuance costs less for the company and is far more convenient for the shareholders and the owners of the organization. As both organizations Jet2 and Dart Group have a good reputation, the idea to raise debt from the market would be welcomed with a good market sentiment. The company can provide the market with high yield bonds with an average of almost five years to maturity. As the company aims to increase its expansion swiftly, high yield bonds in the market would be priced higher. Allowing the organization to raise capital (Dart Group, 2016).

8.5.1.4 Control System

The control system for the following aspect would be to analyze the organization debt to equity and the current ratios. If the current ratios start to fall below 1, then it would be an indicator to stop implementing this strategy for the time being. Similar is the case for the other ratio. If the ratio increases above 1, then the debt being issued should be stopped. Until the organization can recover (Henckles, 2015).

8.5.2 Time Cycle of the Strategy

The strategy which is being proposed is cyclical. The idea of the strategy is to allow the organization to keep expanding. The continuous expansion would increase the fleet size, the number of consumers and the revenue generated. Hence there so specific time limit till which the strategy can be implemented. However, to overcome the airline’s current situation. The following strategy will be able to deliver in one year. As the capital can be raised effectively from the strategy, however, the investment and the construction of handling facilities is a time-consuming process.

9 References

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