Air High Aerospace Overhauling Business Plan

3621 words (14 pages) Essay in Business Strategy

23/09/19 Business Strategy Reference this

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Air High Aerospace Overhauling Business Plan:

Quality Aviation Replacement Parts for Professional Customers

 

Introduction

 The current globalized and the highly dynamic world is characterized by new opportunities for investors that intend to exploit the local, regional, and international markets (Prasad, Babbar, & Calis, 2000). It is also imperative to state that new markets are opening from time to time even as customers become more demanding on the nature and quality of products and services that they want to use (Jasti & Kodali, 2014). In other cases, competition across industries is forcing enterprises to look for avenues for improving their operations and attracting customers. For startups, the process of getting into new markets and competing with the existing organizations can be challenging. For other investors, complications emerge even before an organization rolls out its plans and starts meeting the needs of customers. It is for these reasons that organizations strive to come up with business plans that will lay out the areas of focus which will lead to the successful realization of short term and long-term corporate goals.

The current business plan outlines the critical aspects that will define the operations of Air High Aerospace Overhauling (AHAO). AHAO will be a part fabrication facility specializing in the turbine engine and aircraft engine maintenance, repair, and overhaul (MRO). There is an expected 4.5 percent yearly growth from now till 2028. Under the umbrella of Global Air High Corporation (GAHC), this facility will have the highest qualified aircraft maintenance personnel pulled from all over the country. In addition, it will work with different aircraft engine manufacturers in the region to provide high-quality services to its clients.

 

 

Type of Business

 The proposed business will engage in a turbine engine and aircraft engine maintenance, repair, and overhaul. In recent years, the growing need for aircraft engine maintenance services, coupled with rising demand for safe air travel, has created new business ideas in the aviation sector. The current business enterprise will work to exploit the available opportunities in the market to meet the needs of airlines and other aircraft operators. AHAO will be based out of Dallas, Texas, where there already exists a large amount of aircraft manufacturing facilities. The location will ensure easy access to engine parts and give AHAO the capability to perform all MRO on commercial airline turbojet engines. The components that can be overhauled will be done in-house while additional parts will come from a newly designed supply system.

Legal Form of Business

AHAO will operate in the US market as a corporation. Although a corporation may appear to be a complex business structure, it has specific privileges, rights, and liabilities that extend beyond those of an individual business person or investor. In addition, it brings significant financial and tax benefits that may help an organization achieve its goals and objectives. One of the main reasons why this legal form of business was selected in the present case is the fact that it assists in separating the owners of the enterprise from the business itself in various areas including those related to corporate regulations and tax processes and requirements. In other words, the owners of the enterprise will get liability protection even when they undertake various activities related to the organization. Moreover, the business will be able to retain some profits without putting the owners into additional taxation requirements. Second, the corporate structure will create new avenues for raising money for expanding the enterprise. The process can entail the sale of stock and shares to get additional capital for various business-related activities. Finally, the structure will go a long way in ensuring the continuity of the organizations even in the absence of the original owners.

However, there are some shortcomings that were taken into consideration when resorting to the selected legal form for the business. First, the formation of a corporation is linked to high costs because of different factors such as licensing and taxation requirements. In addition, there are complex rules that need to be followed when operating a corporation. These regulations relate to different issues such as taxation, licensing, and accounting practices. The other limitation of the business structure is the fact that the owners may end up paying double taxes from the business earnings due to the federal and state requirements. It is, however, worth stating that a corporation may not be required to pay taxes for the earnings that are given to the owners as reasonable compensation for work done. These shortcomings notwithstanding, it was determined that the best legal form for the proposed business was that of a corporation. AHAO will be controlled by the Global Air High Corporation (GAHC) and shareholders. Two chairs of the board will be held by chairmen from AHAO. The structure will ensure larger business dealing are handled by component personnel.

Legal Setting of Business

Another important issue that needs to be considered before rolling out the proposed venture relates to the legal setting of the enterprise. As noted earlier, AHAO will operate as a corporation and follow the relevant federal and state laws. In Texas, there are different zoning requirements that enterprises are expected to follow. The regulations are meant to control floor area ratio, land use, lot sizes, density, and coverage. In Dallas, business districts are zoned into the central area, commercial service and industrial setting mixed use, multiple commercial regions, residential, retail, and office areas. Under the commercial areas, organizations and investors can set up enterprises that deal with maintenance and repair work, electronic service, catering, rail and bus transit, storage facility, technical schools, motor vehicle repair, medical laboratory, labor halls, and furniture construction among other ventures.

In Texas, zoning compliance may be an overwhelming and complex process for organizations and individuals seeking to establish a business in the area. Some laws that control how different commercial properties and sites can be used. In addition, the changing nature of the zoning ordinances and legislation may make an organization non-compliant within a short time. However, AHAO will strive to comply with all the licensing and operation requirements meant for enterprises operating in the commercial zones. In addition, the organization will work with the Engineering Division of the City of Dallas to ensure that all its construction plants are sound and compliant with the City Codes. The primary goal is to set up a successful and profitable business that not only maximizes returns for the investors but also contributes to the sustainable growth of the city.

Location Requirements

AHAO intends to exploit the new opportunities in the aviation sector by providing high-quality aircraft engine maintenance services and other related products. To achieve this goal, the organization needs an appropriate site from where it can meet the specific needs of its customers. The enterprise will be domiciled in Dallas, Texas. The choice of location was influenced by the changes that have been witnessed in the aviation sector over the years. Available global reports show that the aviation sector has evolved into one of the booming industries around the world. Moreover, operators and organizations in the sector have been exploiting the new opportunities created by the increasing passenger numbers and the growing demand for high quality and reliable transport services.

The United States is among the fastest growing markets in terms of passenger numbers and demand for aviation-related services. With airlines in the US and global market competing to offer air transport, there has been a rising need to work with partners who can offer aircraft engine maintenance, repair, and overhaul services. The primary goal is to ensure that the fleets operated by different airlines are in top-notch conditions so that the needs of local and international customers can be met. Dallas is a home of many aircraft manufacturing facilities that work with different airlines. Therefore, the establishment of AHAO premises in the region will provide easy access to clients and organizations who are already working with the aircraft manufacturers. In addition, the organization seeks to exploit the opportunities in the Dallas market by providing high-quality MRO services on various commercial airline turbojet engines.

Business License Research and Cost

AHAO intends to comply with all the relevant state and federal laws related to business activities. One of the areas that the organization will focus on is the issue of licensing. Before commencing its operations, the enterprise will seek the licensing from the relevant authorities as set out in the Texas Business Organizations Code. Today, Texas remains one of the popular states where business people and investors are forming and incorporating different ventures. Due to its high population, Texas has created a thriving business community that continues to be exploited by different companies and organizations such as Dell. Over the years, the state has strived to offer investors access to land, ready markets, and natural resources by easing the process of licensing. However, it will also be important to find social networks in the region to get a platform for sharing perspectives, ideas, competencies, and knowledge (Babbar, Behara, Koufteros, & Huo, 2017). The networks will help AHAO to identify new opportunities and markets in Texas and states.

Companies like AHAO are expected to work with the Corporations Section of the Office of the Secretary of State when launching their operations in the state of Texas. In addition, they can get relevant licenses from the Texas Department of Licensing and Regulation. The total cost of incorporation in Texas will depend on a wide range of factors including the location and the nature of the business. In the case of profit organizations such as AHAO, the state charges $300 as the filing fee for a certificate of formation (Texas.gov., 2018). Before filling the form, business people are expected to provide the name of the organization, mission, sector, and the list of the directors. These services can also be received through the Registered Agents in Texas. Once the organization has successfully been incorporated, it is imperative to the Texas Department of Licensing and Regulation to get information on the relevant charges and fees that need to be paid before the organization launches its operations.

Insurance Requirements

The aviation sector continues to offer unique opportunities for organizations and investors who deal with different services and products like engine testing (Kinnison, 2012). The aircraft engine maintenance, repair, and overhaul subsector have also attracted the investors and enterprises that intend to help airlines and various aircraft operators in meeting the needs of their clients. However, the sector is lumped with high-risks that may adversely affect the profitability of a company. It is such risks that increase the need for insurance and lead to the payment of high premiums by different enterprises and operators. In the present case, there are several factors that should be taken into consideration when looking for insurance coverage. They include fire damage, aviation general liability, terrorism, medical expense, personal injury, hangar keeper’s liability, and employers’ insurance. Presently, there are different organizations that provide insurance coverage for companies operating in the MRO sector. Therefore, AHAO needs to get insurance quotes from different vendors so that it can make an informed decision on the appropriate package to purchase. The decision will be influenced by different factors including the nature of the packages, terms, and conditions, and the premiums to be paid.

Proprietary Rights

AHAO will be working with airlines and aircraft manufacturers like Boeing in the course of its operations. The organization will strive to offer high-quality MRO services without infringing the intellectual property rights of the aircraft engine manufacturers. In addition, the organization will handle the commercially valuable information about the engines confidentially. The process will entail complying with the relevant security policies and rules and protecting the intellectual property assets of its clients and partners. From time to time, it will be imperative to review the non-disclosure policies and rules to protect the design specifications, trademarks, copyrights, patents, and logos associated with the aircraft engines. Employees will be required to comply with the policies and maintain an excellent working relationship with the clients and partners.

Employment Law and Requirements

The input of employees will be critical to the success of AHAO in the MRO sector. Consequently, the organization will strive to create a conducive work environment for all its employees. The process involves complying with the relevant employment laws and regulations. Texas requires business enterprises to follow the appropriate federal laws and requirements when it comes to employment issues such as minimum wage, anti-discrimination, leaves, and the rights of workers. In addition, employers are expected to comply with municipal obligations that relate to employment relations. With respects to discrimination, The Texas Commission on Human Rights Act requires organizations to treat their workers with dignity. The other laws that the organization will be expected to comply relate to minimum wages, workplace labor, employment laws, and child labor.

Purchase Orders and Contracts

The success of AHAO will also be influenced by the way the organization initiates and manages purchase orders and contracts with different suppliers. One of the critical areas that the organization needs to take into consideration is the sourcing methods to be utilized in different contexts. AHAO will work with various suppliers and entities to get the materials and equipment required to offer high-quality MRO services to its clients. The process will entail adopting systems such as Enterprise Resource Planning and Maintenance Management System (CMMS) to help in managing actual demand, material flow, and contracts with different companies (Raju, Gandhi, & Deshmukh, 2012). In cases of where it is critical to outsource services, the organization will utilize fixed price with economic price adjustment (EPA) to get value for the money paid to relevant organizations. EPA will also enable AHAO to respond to the changing economic conditions and demand for MRO services. The nature of contracts signed with the partners will be carefully assessed with the focus being on different elements such as labor, duration, time, and the resources involved. The primary objective is to ensure that AHAO gets access to the required products and services at the right time so that it can respond to the needs of its customers.

Torts and Crime Protection

Torts can be described as civil wrongdoings and actions that can cause harm to another party (Macaulay, Braucher, Kidwell, & Whitford, 2010). The injured person or entity may decide to sue the wrongdoer with the goal of getting compensation. There are different kinds of torts and crimes that may affect the success of AHAO in the market. They include wrongful termination of employment, defamation, discrimination, and breach of contracts (Macaulay et al., 2010). AHAO will strive to comply with all the relevant laws related to employment, contractual arrangement, and fair business practices to avoid litigations that may lead to the loss of resources and business opportunities. A legal team will be put in place to assist the enterprise in addressing disputes that arise as a result of different torts and crimes that may emerge in the course of the provision of MRO services. Furthermore, the organization will strive to act in good faith when dealing with different parties to protect its reputation and avoid the costs associated with a breach of contracts.

Property and Requirements

AHAO requires different equipment and systems so that it can meet the needs of its customers. One of the areas that the enterprise will work on is getting office and hangar space for its everyday operations. The hangar space will be used to perform different maintenance services on the aircraft engine (Kinnison, 2012). The offices, on the other hand, will be used by different employees to carry out a wide range of administrative functions. Due to the high cost associated with developing a property from scratch, the organization intends to lease the business property and hanger space that will be used in everyday processes. However, AHAO will also have to buy different high-quality equipment for its operations. They include testing and measuring equipment computer systems, and aircraft engine handling tools. The employees will be trained on how to use the equipment so that they can provide quality services to customers at all times. The machines will be maintained in accordance with the manufacturer’s specifications to reduce cases of breakdown and downtime.

UCC Considerations

Uniform Commercial Code (UCC) govern different types of business requirements and contracts. In addition, they affect the way organizations conduct their activities when leasing and selling products. UCC will allow AHAO to make different contacts while also ensuring uniformity when it comes to transactions. While signing contacts, the organization will strive to obey all the relevant laws including those related to the passing of titles and fraud (Miller, 2016). The process will entail making clear offers, consideration, and pricing methods in the contacts. Furthermore, the enterprise will always strive to meet its contractual obligations to avoid unnecessary and costly litigations.

Other Considerations

MRO is a critical process that enables airlines to remain operational and comply with airworthiness requirements. In addition, it assists aircraft operators to guarantee the safety of both the aircrew and passengers (Kinnison, 2012). Therefore, those tasked with the provision of MRO services need to be trained and certified. AHAO will strive to recruit and maintain a highly qualified and experienced workforce so that it can meet the needs of its customers. Furthermore, the organization will offer continuous training and development of opportunities for its employees to help them acquire new skills that will improve the quality of services offered to clients (Kinnison, 2012; Sullivan, 2018). The process will entail partnering with aircraft manufacturers like Airbus, Gulfstream, Bombardier, Boeing, and Embraer to train workers on different aspects of MRO including engine testing and assembly.

Another critical area that AHAO will consider is the issue of operation management which is regarded as one of the critical elements that can affect the sustainability and profitability of a company (Zhang, Akwei, & Zhang, 2016). In addition, it is important for the organization to manage its operations in a systematic way in order to provide quality services and succeed in the market (Choi, Cheng, & Zhao, 2016; Karlsson, Åhlström, Forza, & Voss, 2016). The process will entail developing service operation systems, reliable supply chain networks, and excellent partnerships with other businesses (Meredith & McMullen, 2008; Olhager & Shafer, 2012). The objective will be to acquire a larger market share and meet customer expectations.

Conclusion

Airlines are required to guarantee the safety of passengers and operators by ensuring that their aircraft are in excellent working conditions. In some cases, they outsource MRO services to different services shops with proven records in meeting specific needs of enterprises in the aviation sector. AHAO intends to get into the aviation industry by offering MRO services to companies in Texas and the surrounding areas. The organization will work with different suppliers and manufacturers to ensure that airlines get the services that will guarantee the safe operation of aircraft. The company will comply with all the relevant laws and regulations including those related to employment, safety, and contract formation to succeed in the market and achieve a competitive edge over its rivals.

References

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