Russell Investments Case Competition

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Transcript of Russell Investments Case Competition

TIMELINE

2017

• 5th Freedom Agreements and flight traffic across Pacific

• 9th Freedom Agreements attained for South Africa Terminals

2018

• 5th Freedom established between Ireland and the USA

• Flights running between DC and Dublin

2019

• Cargo terminals in South Africa ready for operation

2020

• Fully functional South African cargo routes to Johannesburg and Dubai

2021

• Track progress from all new air routes

GDP GROWTH

Position in Global

Economy

Freedom of the Air

Rights

Emirates Flights

Emirates Flights

Emirates Flights

S. Africa Alternatives

1. Middle East: Saudi Arabia and Qatar

i. Expected growth for cargo

2. To and from Russia and South America

i. Expected increase in cargo traffic

Johannesburg Financials

- Services market of wealthy clientele in all connecting

cities (clear demographic)

- Builds on existing route so it will be a less expensive

plan to implement

- High profitabillty

- Doesn’t conflict with Fifth Freedom Right for air travel

- Not enough demand for new route

- Governments don’t cooperate- Emirates have fewer transpacific flights

- Access to more travellers in the fastly growing Asian

economy

- Plenty of other companies do similar routes

- Not enough demand for route

- Conflicts with previously unforeseen regulation

- Added bonus for this specific route?

Trans-Pacific Route

- Competition from United and Air Lingus for same flight

path

- Slightly unstable political scene in Ireland

- Dublin is smaller airport than some cities

- Dublin is a gateway into the rest of Europe

- Ability to compete with Turkish Airlines for local flights

in the future

- Expansion of routes across Atlantic

- Get into fast growing Dublin airport

- Introduction of Emirates-level service for this route

- Location is near a lot of major tourist/political/business

destinations

- Dublin has a growing economy (rebounding from 2008

Crisis)

Trans-Atlantic Flight

- Not having routes already established in these areas

- High competition in those areas from other airlines

- More expensive in short run with building terminals

- Governmental regulations (9th freedom rights)

- Growth in Africa = increased shipping demand

- Increased freight routes that can service the Middle

East and Russia

- Building upon pre-existing routes = cheaper

- Playing on shipping strength

- Expansion into smaller cities for

South African Freight Routes

Summary of Points for “Safina” Space Program

Reasons for Exploring this Opportunity:

Exclusivity: No airline offers this service

High speed travel to any destination

Huge increase in goodwill

Original Plan:

Sponsor Virgin Galactic or UAE Space Program

UAE has already invested $5.4 billion

Increase ticket price targetting VIP clientele

Start services around ~2020

Problems We Ran Into:

Emirates is not a production company

No guarantee Virgin Galactic will partner

Most likely a sunk cost

Significant danger involved