Module Five Report- TransGlobal Airlines

Module Five Report- TransGlobal Airlines

Identification

TransGlobal Airlines is a global airline with a major presence in the US domestic airline market. The Airline tends to face several risks and challenges in its day-to-day operations. One of the risks the airlines face is aircraft malfunctioning, which requires an airplane to be grounded and both inspection and repair operations carried out. Typically, this is a high-impact risk. Another risk tends to be increased competition in a growing market from both international and domestic US airlines. When it comes to the balanced scorecard, the competition risk falls under the aspect of business processes, while the airplane malfunction risk falls under the financial aspect (Beasley, Nunez, and Wright, 2006). Categories of operational risks tend to comprise systems risk, people risk, legal and compliance risk, process risk, and external events risk (RIM. (n.d.). The risk of airplane malfunctioning can be classified as an operational risk, while the competition is classified as a strategic risk.

Evaluation

There is a low probability of an airplane malfunctioning. However, when this happens, the impact tends to be very high. Typically, the failure rate for an aircraft engine tends to be 1 per 375000 flight hours, which corresponds to more than 15000 days. (NOVA, n.d.). As such, the likelihood is low, but when a malfunction does happen, a lot of people die or are seriously injured, thus making the impact high. On the other hand, the competition probability in the industry is high given the numerous global and domestic airlines operating in the same market as TransGlobal Airlines, and the impact is high too.

Mitigation

One possible risk-prevention strategy for airplane malfunctioning is good airplane maintenance. Check-ups should also be thoroughly done to prevent unexpected malfunctions. For the increased competition, the solution is setting competitive prices as well as offering impeccable customer service. Typically, having high quality service at a fairly affordable price will keep the customers coming back.

 References

Beasley, M., Nunez, C. and Wright, L., 2006. WORKING Hand IN Hand: Balanced Scorecards AND Enterprise Risk Management. Strategic Finance, pp.49-55.

NOVA. (n.d.). The deadliest plane crash | How risky is flying? | PBS. PBS: Public Broadcasting Service. https://www.pbs.org/wgbh/nova/planecrash/risky.html

RIM. (n.d.). Operational risk. Rim Initiative – Risk Management Initiative in Microfinance. https://www.riminitiative.org/operational-risk/

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Overview
When evaluating a company’s performance or health, it is important to identify and evaluate any current or potential risks the company might face.

In this assignment, you will perform a risk assessment for TransGlobal Airlines to understand its business environment better.

Module Five Report- TransGlobal Airlines

Prompt
Perform a risk assessment for TransGlobal Airlines and write a report describing the results.

Specifically, you must address the following rubric criteria:

Identification: Identify two risks the company is facing, including at least one high-impact risk.
Identify the balanced scorecard component to which each risk corresponds.
Classify the risk based on these two types:
Operational
Strategic
Evaluation : Determine whether the probability and impact of each identified risk is low, medium, or high. Justify your evaluation of the impact and probability of each risk.
Mitigation: Recommend a possible risk-prevention or mitigation strategy for each identified risk.
Guidelines for Submission
Submit a 1- to 2-page Word document using double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style. Consult the Shapiro Library APA Style Guide for more information on citations.