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Medium Product Launch Operations Investment Decision

BizAvi Company

#Aviation #Maintenance Services
ProHub Comment

This is a structured product launch case requiring candidates to evaluate an internal maintenance capability expansion using financial analysis, market assessment, and strategic considerations. The case tests ability to synthesize multiple data sources (portfolio comparison, market dynamics, investment calculations, and operational risks) to reach a recommendation on a marginal but viable business opportunity.

Estimated Time 15 minutes
Difficulty Medium
Source IESE
50 / 100
Due to recent downturn in the Brazilian economy, BizAvi Company is currently seeking to diversify its portfolio of products and improve profitability. The Maintenance BU currently supports third party clients and the company’s owned business jets, which are operated by the Aircraft Chartering Unit. BizAvi Company has recently acquired three new units of Embraer aircraft, and currently outsources the maintenance services to the manufacturer. The CEO sees in the Embraer models also an opportunity for the Maintenance Business Unit, and has asked your help to assess the quality of this project.

Clarifying Information

  1. The company operates in Brazil, and most of its clients are also Brazilian;
  2. The maintenance service consists in providing technical support to aircraft preventive and corrective maintenance, which includes the supply of specialized labor and parts;
  3. The main objective of the CEO is to increase financial gain;
  4. The Aircraft Chartering Unit currently outsources the service to the aircraft manufacturer’ service center;
  5. The company currently owns and operates three Embraer aircraft, with no plans to change the size of the fleet;
  6. BizAvi Company company is a very renowed company in the country, and is well known by the technical expertise of its maintenance personnel;
  7. The company has a VP for the Maintenance BU and a VP for the Air Chartering Unit;
  8. A repair station holds a licence to work on a list of determined aicraft models. This list is dependant upon having the appropriate resources to conduct the service (such as trained labor, specialized equipment and technical publications)