Private Equity - Strategic Airline Shareholder Advice
We provided detailed merger and acquisition (M&A) options for a private equity who had bought and recapitalised an airline facing bankruptcy.
Our key objectives were to:
- Develop strategic options, in terms of timing and whether to acquire other airlines or to be acquired.
- Produce an independent view on likely market conditions, competitor action and how well prepared the airline was to drive change in a new ownership structure.
Drawing on our significant knowledge of the market and the individual expertise of our team, we shortlisted then analysed potential M&A prospects, reviewing both potential buyers and sellers.
Nyras used ‘out of the box’ thinking to determine why the client’s airline might be an attractive M&A proposition. We set out scenarios for market conditions going forward and highlighted other airlines’ growth and cost strategies, evaluating the implications of these for the client’s airline. Nyras also carried out a desktop cost and a KPI benchmarking exercise against competitor airlines, to identify areas of advantage and disadvantage.
While management accounts were provided, we had no contact with the airline at any time and were therefore able to produce an independent, impartial and sympathetic report.
While the financier concluded that there were no immediate M&A opportunities for their airline, the assignment helped them better understand the other players in the market, their motivations and how to create competitive tension for M&A activity. The airline benchmarking analysis highlighted significant scope for KPI improvement and cost action within the airline, which could be scheduled by the management team.
The final report contained strong recommendations and actions and a version was created specifically for the airline executive team, showing their competitive position in the market and management action opportunities.