Aviation service firm

The goal was to establish the first vertically integrated charter aviation firm. The company consisted of a maintenance, repair, and operations (MRO) shop, a certified airline serving cargo, government, and sports teams’ needs, and a state-of-the-art engine test facility. The potential was there … then so was the pandemic, and with it a halt in aviation. 

Charter flights were driven to record low volume and virtually all aircraft engine overhauls were put on a long pause while airline capacity was slashed in the industry and green time on available engines was utilized to reduce cost. At the same time, the company experienced turnover in the parent organization’s management, with the CEO and chief operating officer departing. 

Government relief funding helped stem some of the bleeding but didn’t alleviate the distress to operations. The engine overhaul business had almost two years of engine green time to outlast, meanwhile the MRO business had burned over $1 million per month and had not made a profit since it was acquired. There were significant near-term liquidity issues and a credit facility in forbearance. It was unclear whether the MRO operational loss was worth the synergies it created with the charter airline. 

AlixPartners was brought on to stabilize liquidity (having been poured into non-core spending), take on the interim CEO and VP of finance roles, assess the business viability under different scenarios, and, following that calculus, oversee the divestiture of the MRO business. Our team built a Monte-Carlo simulation to quantify on a randomized basis the impact of various of risks and opportunities over the forecast period, to understand the likelihood of a range of potential P&L outcomes, and prepared projections of the future earning power of the business after a successful turnaround.