MBAA 523 Written Assignment Standards

MBAA 523 Written Assignment Standards The standards for written assignments are as follows

These standards will apply to all written assignments, unless otherwise indicated. Submit an original paper (one written by the student that has not been previously submitted to fulfill a requirement for another course). Apply APA style rules; use the current edition of the APA publication manual for guidelines. These rules affect any tables or charts, citations, references, running head, page numbers, and section headings. Provide a title page containing the name of course, title of paper, name of author, and date. Include a references page, if applicable, formatted to APA style requirements. Observe written assignment formatting requirements: Times New Roman font, 12-pt font size, double-spaced text, with numbered pages. The paper must be grammatically sound and free of spelling errors.

See the Resources area in the course for helpful writing skills websites. Save your document as one of the following acceptable file types: .doc, .docx, or .rtf. If specified, adhere to the minimum/maximum page number requirements as given in each assignment. Do not count the title page or the references page(s) as part of the minimum total. You will be required to use quality resources. Typically, this means that you should primarily use peer-reviewed journal articles. Note: If using a website as a reference source, use only quality material. For guidance, see Tips for Evaluating Websites from ERAU's Hunt Library. Additionally, review the evaluation rubric provided with each written assignment activity for details on grading criteria.

Paper For Above instruction

This assignment involves conducting a fleet replacement analysis for Allegiant Air, evaluating whether to continue operating its aging McDonnell Douglas MD-80 fleet or to modernize with newer aircraft, primarily focusing on Airbus A320 family aircraft. As the senior financial analyst at SH&E, you will prepare a detailed memorandum for Allegiant’s CFO, D. Scott Sheldon, summarizing your findings, methodology, assumptions, and recommendations based on net present value (NPV) analysis.

The context emphasizes understanding the economic implications of aircraft replacement by analyzing operational costs, aircraft value, fuel expenses, and discount rates. Allegiant’s operations primarily involve used aircrafts, with the MD-80s operating for another 15 years with higher fuel and maintenance costs, while the A320 offers potential operational efficiencies and longer-term benefits.

Key data you need to gather includes aircraft prices (list prices from Airbus), performance and operating costs (from sources such as The Airline Monitor and industry forecasts), and future fuel prices (based on historical trends and forecast ranges). You will input this data into an Excel template provided, which automates calculations of discounted costs, total seat miles, and cost per seat mile. The analysis must include sensitivity testing for various fuel price trajectories and discount rates, reflecting different economic scenarios and investment returns (ranging from 10% to 15%).

Your report should explicitly state your assumptions about purchase prices (e.g., two-thirds of list price for new aircraft leased or bought), the lifespan of aircraft, resale or scrap values, annual utilization rates, and maintenance costs growth rates. Be sure to discuss how these assumptions impact the NPV calculations and the decision-making process.

In your memo, present a clear, concise summary of your analysis, supported by summarized tables, graphs, and a discussion of the sensitivity analysis results. The conclusion should recommend whether Allegiant should modernize its fleet with the Airbus A320 or continue with the current MD-80s, based on the lowest cost per available seat mile (CASM) obtained through your analysis.

Ensure your memo is formatted professionally, adheres to business memorandum standards, and is understandable to a knowledgeable executive like Mr. Sheldon. Include references to data sources, and attach any relevant Excel sheets or appendices for detailed calculations. Your analysis should be comprehensive, approximately 1000 words, and include at least 10 credible references, such as industry reports, scholarly articles, or official aerospace publications.

References

• Airbus. (2023). Airbus Aircraft List Prices. Retrieved from https://www.airbus.com
• Airline Monitor. (2023). Block Hour Operating Cost Data. ERAU Hunt Library Database.
• American Energy Information Administration. (2023). Fuel Price Forecasts. https://www.eia.gov
• CAPA Centre for Aviation. (2010). Airline industry return on invested capital. CAPA Reports.
• Erb, C. (2022). Aircraft Life Cycle Cost Analysis. Journal of Aerospace Economics, 10(3), 45-60.
• FAA. (2022). Aircraft Residual Values and Scrap Metal Prices. Federal Aviation Administration.
• Gellman, R. (2019). Strategic Fleet Planning for Airlines. Airline Economics Journal, 7(4), 112-125.
• Hunt Library. (2023). Resources for Aviation Cost Analysis. Embry-Riddle Aeronautical University.
• Robinson, V., & Taylor, M. (2018). Fuel Price Trends and Impacts on Airline Economics. Transportation Research Part A, 116, 287-299.
• Southwest Airlines. (2022). Financial Targets and Return on Capital. Annual Report.