This case was featured in the September 2024 issue of Connect.
Who – the protagonist
Matilda Harrison, head of the network development department at Azure Wings.
What?
Azure Wings was the fourth-largest airline in the US with a market share of 8.1%.
Headquartered in New York, Azure Wings focused solely on the domestic market, leveraging strengths such as brand reputation, high customer satisfaction, and an extensive route network, including key routes from New York to Los Angeles, Orlando, and Dallas.
But with the COVID-19 pandemic firmly behind them, the airline was seeking international expansion.
Singapore was the target due to its popularity with American travellers. Approximately 11 million people from all over the world visited there in 2023.
Why?
Matilda was tasked with presenting an expansion proposal for Singapore to top management.
To be successful, Matilda believed the headquarters should hire a local handling company in Singapore to oversee all ground operations of Azure Wings, in addition to ticketing.
This option, from her point of view, had the potential of increasing sales volume through the local agent’s superior knowledge and understanding of the market as well as the absence of the language barrier.
However, Richard Blackthorn, Director of International Sales, was also invited to present to top management.
Richard believed that local agents couldn’t do the same quality job as company representatives from the headquarters. He also wanted to become head of a newly established office in Singapore as he spoke fluent Mandarin, his daughter and son-in law had lived there for many years, and relocation could result in a 25% salary increase.
When?
It was the start of 2024 when Azure Wings was looking to expand into Singapore.
Where?
Singapore is a city-state in Southeast Asia, and a favourite among global leisure and business travellers.
Iconic attractions like the botanical wonderland, the meticulously designed Gardens by the Bay, Sentosa Island’s adventures, the vibrant streets of Chinatown and little India, as well as sensory delights, created a captivating experience for American tourists.
What next?
Matilda had just one day left to finalise her proposal to top management.
To prepare the most convincing case for hiring a local handling agent in Singapore, Matilda gathered information about Azure Wings’ risks, cost of both equity and debt financing as well as calculating the average cost of capital (WACC).
Calculating the WACC in the most accurate way was a very important task, as it represented the blended cost of capital available for Azure Wings and was a key metric used in evaluating large investments like those of hiring a handling agent.
But would she be able to convince top management that her proposal was better than Richard’s?
On the reasons for writing the case…
Artem said: “I wanted to use my experience of working for many years in the airline industry, and to show the kind of problems that might arise in real life. I also planned to show that financial calculations and formulas are good, but you always need to take into account ethical considerations and possible conflict of interests while making your final decision as a manager.”
On the case writing challenges…
Artem continued: “I had an undergraduate student helping me write this case study and at first, I needed to monitor and guide his work much more than I anticipated based on his excellent performance in my classes. But with time, he started to become a more independent researcher and improved a lot. His contributions helped me to shape this case and I hope that it was a beneficial exercise for him as well.”
On teaching the case…
He added: “It’s still a little unusual for me to teach my own case study despite doing that with many other purchased cases throughout my career, but it’s very rewarding at the same time. I feel that finally I created something that I always wanted to see in other cases - the right number of details coupled with important financial theory that could be used in real life, such as an NPV concept.”
On how students react to the case…
He commented: “Students’ reactions are mostly positive as they always try to learn more about the industry and real-life application of the information mentioned in the case, something that is much easier for me to explain, as I wrote this case study based partially on my own industrial experience.”
On case writing tips…
Artem explained: “There were a lot of good tips that I learned during the case writing process itself.
“The Case Writing Scholarship from The Case Centre has also helped a lot with that as I had an opportunity to receive professional advice from experienced case writers throughout the process.
“The main advice that I want to share is try and write your case without prejudice - meaning that you don’t need to push the students to one concrete answer, even if you think only one’s correct. Such an approach will make your case much more interesting to read and solve.”
Final word…
Artem concluded: “It was my very first experience writing case studies and I couldn’t have done this without the Case Writing Scholarship and kind guidance from The Case Centre. I believe it’s just the start and plan to write many more cases in the future.”
The case
Who – the protagonist
Matilda Harrison, head of the network development department at Azure Wings.
What?
Azure Wings was the fourth-largest airline in the US with a market share of 8.1%.
Headquartered in New York, Azure Wings focused solely on the domestic market, leveraging strengths such as brand reputation, high customer satisfaction, and an extensive route network, including key routes from New York to Los Angeles, Orlando, and Dallas.
But with the COVID-19 pandemic firmly behind them, the airline was seeking international expansion.
Singapore was the target due to its popularity with American travellers. Approximately 11 million people from all over the world visited there in 2023.
Why?
Matilda was tasked with presenting an expansion proposal for Singapore to top management.
To be successful, Matilda believed the headquarters should hire a local handling company in Singapore to oversee all ground operations of Azure Wings, in addition to ticketing.
This option, from her point of view, had the potential of increasing sales volume through the local agent’s superior knowledge and understanding of the market as well as the absence of the language barrier.
However, Richard Blackthorn, Director of International Sales, was also invited to present to top management.
Richard believed that local agents couldn’t do the same quality job as company representatives from the headquarters. He also wanted to become head of a newly established office in Singapore as he spoke fluent Mandarin, his daughter and son-in law had lived there for many years, and relocation could result in a 25% salary increase.
When?
It was the start of 2024 when Azure Wings was looking to expand into Singapore.
Where?
Singapore is a city-state in Southeast Asia, and a favourite among global leisure and business travellers.
Iconic attractions like the botanical wonderland, the meticulously designed Gardens by the Bay, Sentosa Island’s adventures, the vibrant streets of Chinatown and little India, as well as sensory delights, created a captivating experience for American tourists.
What next?
Matilda had just one day left to finalise her proposal to top management.
To prepare the most convincing case for hiring a local handling agent in Singapore, Matilda gathered information about Azure Wings’ risks, cost of both equity and debt financing as well as calculating the average cost of capital (WACC).
Calculating the WACC in the most accurate way was a very important task, as it represented the blended cost of capital available for Azure Wings and was a key metric used in evaluating large investments like those of hiring a handling agent.
But would she be able to convince top management that her proposal was better than Richard’s?
Author perspective
On the reasons for writing the case…
Artem said: “I wanted to use my experience of working for many years in the airline industry, and to show the kind of problems that might arise in real life. I also planned to show that financial calculations and formulas are good, but you always need to take into account ethical considerations and possible conflict of interests while making your final decision as a manager.”
On the case writing challenges…
Artem continued: “I had an undergraduate student helping me write this case study and at first, I needed to monitor and guide his work much more than I anticipated based on his excellent performance in my classes. But with time, he started to become a more independent researcher and improved a lot. His contributions helped me to shape this case and I hope that it was a beneficial exercise for him as well.”
On teaching the case…
He added: “It’s still a little unusual for me to teach my own case study despite doing that with many other purchased cases throughout my career, but it’s very rewarding at the same time. I feel that finally I created something that I always wanted to see in other cases - the right number of details coupled with important financial theory that could be used in real life, such as an NPV concept.”
On how students react to the case…
He commented: “Students’ reactions are mostly positive as they always try to learn more about the industry and real-life application of the information mentioned in the case, something that is much easier for me to explain, as I wrote this case study based partially on my own industrial experience.”
On case writing tips…
Artem explained: “There were a lot of good tips that I learned during the case writing process itself.
“The Case Writing Scholarship from The Case Centre has also helped a lot with that as I had an opportunity to receive professional advice from experienced case writers throughout the process.
“The main advice that I want to share is try and write your case without prejudice - meaning that you don’t need to push the students to one concrete answer, even if you think only one’s correct. Such an approach will make your case much more interesting to read and solve.”
Final word…
Artem concluded: “It was my very first experience writing case studies and I couldn’t have done this without the Case Writing Scholarship and kind guidance from The Case Centre. I believe it’s just the start and plan to write many more cases in the future.”
