INTEROFFICE MEMORANDUM

TO:

BOARD OF EXECUTIVES

FROM:

OMAR SANDOVAL, EDGAR GONZALEZ, MICHELE PANG, PHILLIP SMITH

SUBJECT:

PROGRESS REPORT FOR EXPANSION PROJECT

DATE:

NOVEMBER 5, 2014

CC:

DR. HUBNIK, MARKETING DEPT, FINANCE DEPT, LEGAL DEPT, ENGINEERING DEPT

PURPOSE
This is a progress report for the research being done on the subject of expansion for the
company. It will include a preliminary look into the agenda of the project.

SUMMARY
On October, 28th, 2014 the Board of Executives accepted our proposal. The Board gave us
a task to begin our research on the comparison between the most favorable aircraft manufacturers in
the market. So far, the the group has looked at the options offerd by Boeing, Airbus, Bombardier,
and Embraer. These manufacturers are well known worldwide to provide the finest models of
aircraft available.As of right now we are currently finishing our comparison research between aircraft
manufacturers, and we will be submitting a research report of our findings to the Board of
Executives.

INTRODUCTION
The company has a maintenance strategy which is a short term solution, but does not
support our long term strategy for growth. Maintenance costs are increasing year after year for each
airplane in the aging fleet. In addition, maintenance requires scheduled downtime, which means that
we have fewer seats to sell resulting in decreased revenue. This problem is affecting our stock holders
because we are unable to grow under current conditions, this is also affecting our customers because
we have fewer available flights while planes are under maintenance.

COMPLETED WORK
As stated above, we have begun an analysis between the four major aircraft manufacturers.
Boeing and Airbus seem the most promising due to the reputation that they carry worldwide with
their customer base. Though the two carry this advantage, we have also decided to look into the
other two companies. We first tried to look at Embraer and Bombardier; since these are smaller
companies, they might have better prices. Embraer has grown into a well-known company based in
Brazil. Though they are the fourth largest commercial jet supplier with a compatible reputation, they
are more known for making better business and private jets rather than large passenger jets. This is a
potential reason to not use Embraer. On the one hand Bombardier looked to be a better option since
they already worked with American Airlines and Delta in the past. This was a positive thing but one
of the reasons we stayed away was because the airplanes were old and not fuel efficient. Another
issue with Bombardier was that they had an accident in which one of their planes had an engine
malfunction causing a fire. The fleet suffered a grounding for a substantial amount of time which
then made their stock value and customer list to drop. Boeing had been one of our main choices

since they are one of the most reputable airplane manufacturers and have done business with the
largest airlines in the world. Airbus which has been competing with Boeing for a long time poised to
be a company with fuel efficient planes and at lower prices than others including Boeing. With the
research that has been conducted on the four manufacturers, we have come to a conclusion that
Boeing and Airbus are the optimum candidates for the companys plan.

FUTURE WORK
Since the top companies that seem the most favorable for our project have been looked into,
we will seek for approval from the Board of Executives on the top two selections that have been,
whitch has been narrowed down from the analysis. If the analysis is approved, then the aircraft of the
two companies will be explored to find the specific model that best fits the companys needs. When
the top models of each manufacturer are narrowed down to one of each, an evaluation of their
specifications and attributes will be conducted.

UPDATED SCHEDULE

Nov. 10th, 2014

Generate a list of possible aircraft to be considered. The aircraft will

be subject to simple critiques such as desired revenue from use,
customer comfort, and optimum seating capacity needed for the
companys expansion.

Nov. 17th, 2014

This is the day that we aim to have completed research on two

specific aircraft.

Nov. 24th, 2014

Continue research on comparison between the two aircraft. Have

analysis on past, current, and projected future cost of fleet
maintenance.

Dec. 1st, 2014

Have a breakdown of the aircraft being examined that separates the

different aspects being put under scrutiny. Some may include
aerodynamics, mechanical dynamics, software being used,
dependability of materials,

Dec. 8th, 2014

Organize all research and create a criticism to favor one aircraft over
the other. Every aspect of the aircraft models will be looked into to
make sure the prime choice has been made.

Dec. 10th, 2014

On this day we aim to have a thorough report completed with a final

decision to submit to the Board of Executives.

CONCLUSION
Now that the manufacturers have been chosen, the research for a variety of aircraft will
commence as soon as the progress report is sent out. This research will advance us to the next stage
of the expansion project which is narrowing down the choices for the new fleet. We plan on looking
into anywhere from two to four aircraft from both Boeing and Airbus. The project has been right on
schedule so far with meeting the criteria set by the Board of Executives and completing deadlines on
time.

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