Instructions: You work for the Fleet Planning Department of Royal Air Maroc.

You have been

tasked by senior management to prepare a memo for the board of the airline. You are working
under pressure as the airline is suffering badly. Below are possible headings and topics you could
cover in the memo, but you are free to, and encouraged to, make any analysis, commentary, and
recommendations you see fit in the context of the Case study. The objective here is to
demonstrate an ability to analyse the problem and suggest a solution that is backed up by
evidence. DO NOT JUST TRANSCRIBE THE TEMPLATE – THIS TEMPLATE IS TO PROMPT YOU IN
ANALYSING THE PROBLEM

Memorandum to the Board of Directors of La Compagnie Nationale Royal Air Maroc

This memo seeks to advise the board of directors on the best strategy the company should pursue in
dealing with the problem of the grounding of the Boeing B737Max.

Background
RAM has 4 x 737Max-8 – only two delivered – grounding has severely disrupted growth strategy –
passenger numbers down 6% - costs of hire in aircraft means loss on every flight – unsustainable.

Economic impact
Max8 more efficient than either B737-800 or A320 (assume 17% increase) in variable costs - what
can airline do in that case to reduce overhead? – can impact be contained or is it severe enough to
impact viability of airline (hint: what is the history of the airline?) – speculate if government
assistance is required and what would be the political implications.

Analysis of options available

Outline strategy options, perhaps including

- “continue as is”

- purchase an aircraft that could fit the fleet for a number of years providing growth capacity

– wet lease for immediate capacity

– dry lease

– what aircraft to lease?

– length of lease (why?)

Recommendations
We recommend the following course of action…..

Analyse the benefits and risks that support your recommendation.