Conducting First-Class Due Diligence on Regional Airline

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CLIENT SITUATION
When an asset management firm considered the purchase of a regional airline, a senior analyst at the firm sought expert insights on commuter passenger travel, charter air travel, and cargo operations. The firm needed a deep understanding of the local market and the regional airline’s cooperative arrangements with national carriers. Of specific concern were operational and regulatory considerations that could be deal-making — or deal-breaking.

 

GUIDEPOINT SOLUTION
Within 24 hours, the firm was reviewing a roster of vetted Guidepoint Advisors.
First, Guidepoint identified a list of Guidepoint Advisors who fit the initial requirements. After the candidates completed a screening questionnaire, Guidepoint sent the firm bios of 25 potential Advisors. The firm’s senior analyst and Guidepoint’s project manager then spoke via phone to further refine the profile of the ideal Advisor.
The asset management firm selected a former airline industry veteran and current professional consultant who had held VP and Executive VP positions at an airline in that region. The Advisor had comprehensive knowledge of the management, operational, and regulatory challenges facing the target. The initial consultation with the Advisor occurred within the same week of the initial request.
Applying a “try before you buy” approach to securing consulting services, the firm asked Guidepoint to extend the arrangement with the Advisor.
The Advisor then:
  • Reviewed materials submitted by the target and constructed pointed questions for the firm to ask
  • Acted as a sounding board to vet the initial investment thesis
  • ƒƒHelped the firm contextualize and benchmark the target’s industry and segment-specific KPIs
  • ƒƒPrepared an informed assessment of specific regulatory issues and how they affected real-world operations

 

RESULTS
According to the senior analyst driving the research, “Guidepoint invested the time to understand exactly who we wanted, and found the needle in the haystack—someone we never would have found on our own—without exhausting considerable time and resources. With the help of this expert, we got clear answers to our key threshold issues, and ultimately decided it was a no-go. By stopping due diligence on this target before our deal team spent time and made multiple trips, we saved real money, and importantly, were able to move on to the next project.”

 

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