This case teaches candidates to drill down into cost structures systematically, moving from high-level observations (SG&A growth) to specific expense drivers (Marketing, Rent, Customer Service). The interviewer guidance strategically steers candidates away from cutting maintenance (regulatory risk) and marketing (stakeholder priority), forcing them to identify the actual levers for profitability improvement. The case rewards structural thinking—identifying that rent and customer service outsourcing are both viable, offering significant savings totaling $78.8M.
Sardine Airlines is an ultra low-cost carrier with flights throughout the continental United States. They have hub airports in Oakland, California; Tulsa, Oklahoma, and Hartford, Connecticut. Sardine Airlines is facing increased pressure from other low-cost carriers such as Cattle Car Air and Soul Airlines.
Sardine Airlines has faced declining profit for the past year. Sardine’s CEO, Penny McPincher, has asked your team for advice on how to reverse the profitability trend.