Consulting Case Interview Profitability

**Case Interview Question:** Your client is Skyward Airlines, a major global airline with a well-established market presence. However, due to the recent pandemic, Skyward has been significantly affected by a decrease in travel demand, resulting in reduced revenues. Furthermore, the company is facing high fixed costs such as aircraft leasing, maintenance, and labor costs. The volatility in fuel prices has made it difficult for them to manage their operating costs effectively. Despite some governmental aids, the current financial state is still grim and it's unclear when travel demand will fully rebound. You have been hired as a management consultant to assist them in finding a way back to profitability. Your task includes: 1. Identify and assess potential areas where Skyward Airlines can reduce its fixed and variable costs without significantly impairing its operations. 2. Consider the impact of volatile fuel prices. Should Skyward Airlines invest in fuel hedging strategies to mitigate this risk? How would you evaluate the cost-effectiveness of such strategies? 3. Given the lower demand, how should Skyward Airlines reconsider its fleet capacity, flight routes, and frequencies? 4. Identify opportunities to generate revenue beyond traditional passenger travel. Can Skyward Airlines diversify its business or find new sources of revenue in the current situation? 5. How should Skyward Airlines prepare for the recovery period post-pandemic? Which strategies should they adopt to regain their market position quickly and efficiently? **Why It Fits the Brief:** This case interview question touches on all the major challenges faced by Skyward Airlines: high fixed costs, volatile fuel prices, and decreased demand due to the pandemic. It challenges the interviewee to consider various aspects of the airline's operations, from cost management to revenue generation strategies. Additionally, the question encourages the interviewee to think proactively about post-pandemic recovery, requiring strategic thinking and foresight. It encompasses both immediate remedial action as well as long-term strategic planning, which are critical for tackling a real-world business problem like this.