STRATEGY consulting brief about Air Australia Essay

STRATEGY consulting brief about Air Australia - Essay Example Michael James joined Strategic Group in 2002 as an equal shareholder, alongside Shaun Aisen, and executive director. However, in 2011, Shaun Aisen exited the company resulting in Michael James becoming the sole owner. A few months later, other key members of staff, including the chief executive, commercial manager, and chief operating officer, left the company citing disagreements with Mr. James’ leadership as the main cause. On February 17, 2012, the company’s directors agreed that the company be placed into voluntary administration. Finally, in March of the same year, the company’s creditors voted, for Air Australia to be placed into liquidation. This was because the company could not be sold since nobody had expressed interest, and the company’s assets were not enough to cover the debts it had incurred. Air Australia’s main appeal was their cheap tickets since the company was a low-cost carrier. The budget airline provided affordable travel and, therefore, families could opt to travel short distances by air rather than spend several hours on the road. By providing low-priced, convenient, and frequent flights, Air Australia obtained its competitive advantage over its competitors. Air Australia competitive strengths also include the company’s superior customer service and capability to offer the lowest fares. Although, the company was knee-deep in debt, it had an unequaled customer service within the airline industry (Horst, 2011). Air Australia had debts amounting to an estimated $90 million but only had assets worth $1 million, since the company leased much of its equipment. The company had also been unable to pay aviation charges and fees to Air Services Australia, and owed both Melbourne Airport and Perth Airport vast amounts for terminal leasing. The company’s business had been ailing for a long time but had managed to survive, because it was cash