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STUDENT/TEAM: Serenity Airlines

Letter to Shareholders

Part of your company’s annual report is a letter to shareholders that provides a CEO’s

perspective on the current state of your business. Now that you have formalized your

strategy and become a more seasoned, Airline management team, it is time to

convince current and potential shareholders that an investment in your company has

positive potential returns. Your goal is to provide a persuasive, yet honest appraisal of

your company and its future prospects.

Your letter to shareholders should consist of an update on your strategy, including

target markets, management structure, key accomplishments and challenges, and

future performance objectives. In addition, please discuss your most direct competitor

and how and why you are positioned to outperform them in the future.

The letter itself should be only 1 to 2 pages, but up to five supporting exhibits are

permitted on additional pages. You may want to search online for sample letters to

shareholders to better understand the possible content.
Dear Shareholders:

Serenity Airlines-SA started its first quarters in the airline industry’s stock market

projection with a steady stock rise until the eighth quarter report of 2018. The company

recently acquired an Aerospatiale ATR42 and 2 Embraer ERJ135, increasing the

number of seats to 46 and 74 respectively for a total of 158 seats considering the two

Beechcrafts that we have now in circulation (disposed of one Beechcraft) and impressive

fleet. According to our calculations this will increase our capacity to $111,818 total gross

revenue daily ($319,480*$0.35) and as we travel every day for a year it will be

$40,813,570 ($111,818*365) annually. These acquisitions must be refinanced by the

bank in order to maintain our reputation.

Definitively, it has been a half year full of opportunities to dual designate and mergers to

improve current financial situation. Serenity Airlines recently approached the Bank of

Nova Scotia to secure a long term loan for $5,000,000 and a short term loan for

$10,000,000 as SA Enterprise Value as of July 16, 2018 is $16,617,857.

With these three acquisitions secured by a long-term and short-term loan, the Serenity

Airlines Vision and goals by 2020 would result in a well-balanced business portfolio.

Serenity Airlines presence is noticeable and undeniably ready for a sound growth

projected at a seven fold by 2050.

When considering possible takeover or merger, we decided to choose SunSet Air

because of their gross revenue income of $4,084,601, a stock price of $16.97, and

reliability of 90.7 very close to 91.5, an excellent match.

While reviewing strategic advances, SA is protecting and safeguarding the image of the

firm with a concentration or focus on immediate operational matters while offering

seasonal discounts to attract customers especially in the resort route.
Additionally, Serenity Airlines Board of Trustees voted unanimously on the $2,000 per

quarter decision to fulfill the firm’s Environmental Corporate Responsibility taking care

of the environment. These funds help with research of full electrification or a hybrid

commercial aircraft and observing ways to minimize the pollution attributed to the

combustion of the fuel when flying an aircraft along with the disturbing noise brought to

nearby neighborhoods.

Also, monitoring closely the government budget situation globally and being prepare and

flexible to adjust to these possible threats such as terrorism and increase cost of fuel.

Finally, SA’s administration, particularly HR, is implementing raises for performance

across the board and not exclusively for the upper manager’s position. A committee lead

by the CIO is dedicating its highest attention to introduce larger programmer

developments, installing Wi-Fi for iPods, iPad, and other electronic devices, small

touchscreen tablet for games or movies, and comfortable seats in most flights for the

satisfaction of the customers, and better programs dealing with the time scheduling as

well.

While our entire profitability today is not at the level expected with a net cash deficit of

$1,012,087, once we diversify resources, spending more on marketing and advertising,

and offering fare discounts on selected flights, surely we are expecting to improve by

next year.

SA dedicated employees, experienced pilots, and loyal customers compete with

opponents currently with a rating of 91.5% in reliability and 74% in quality. SA

enterprise value to sales is 4.8%, a ratio that predicts that the company could be

attractive in the near future.
Bertha Cabrera, President Julian Chong, VP Operations Linda Joseph, VP HR &

Marketing Nuryel Carrasco, VP Finances

Incident: Kickback Problem
A bribe, side payment or a kick back is a problem in any industry, however, in the air

transportation industry is not allowed and subject to prosecution. Depending on the

airline’s Code of Conduct and abiding by the policy and procedures set forth therein,

after meeting with the employee, a decision must be taken to document the incident(s)

and terminate the employee.

https://www.nytimes.com/1973/02/27/archives/former-airline-executive-admits-he-took-

kickback.html