GREEN AIRLINES
Practice this advanced merger & acquisition case interview question from BCG in the Transportation sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
ProHub Comment
This is a sophisticated case requiring candidates to move beyond surface-level financial analysis. While the revenue calculations appear favorable ($10M/month), the real strategic challenge lies in understanding why a small regional airline should enter a highly competitive market dominated by larger carriers, and how to create value through a buy-operate-sell strategy rather than long-term operations.
Estimated Time
36 minutes
Difficulty
Hard
Source
IESE
38
/ 100
Due to the recent bankruptcy of a major airline, the aviation authority from Brazil recently opened an auction for landing and takeoff slots in one of the country’s biggest airports. A slot is the right to land and depart from an airport during a given period of time. Green Airlines, a small, regional airline operating in the North part of the country, was offered 10 slots, for the total price of $100M. If Green accepts to buy the slots, it would have to operate them for at least 5 years. The owner and CEO of Green Airlines approached your firm looking for an advice on whether they should buy the slots or not.
Clarifying Information
- An airport slot is a permission granted by the owner of an airport designated, which allows the grantee to schedule a landing or departure at that airport during a specific time period.
- Green airlines currently does not operate in that particular airport
- Green airlines currently only does regional flights and has no plans to include international flights in its offerings
- Green airline currently does not have the necessary planes to operate the slot. Management will need to lease 5 airplanes to operate the 10 slots.
- The $100M that Green Airlines would have to pay is a one-off payment due before operations start
- The main objective of the owner/CEO is financial gain
- Green Airlines can sell the slots, but only after five years of operation
- If Green Airlines does not buy the slots, they will be sold to another airline