CLASS PROBLEM Tower Air

CLASS PROBLEM Tower Air - CLASS PROBLEM Als Airline was...

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CLASS PROBLEM Al’s Airline was founded by David Defendant as an international charter airline. The company's signature route, which accounted for roughly one-quarter of its revenue, was scheduled passenger service from New York to London. Defendant served as Chairman of the Board and Chief Executive Officer of Al’s. Defendant and his family owned a substantial majority of the outstanding common stock and a controlling interest in the company. As a result, the other officers and directors served basically at Defendant's pleasure, and Defendant controlled the firm's management and operations. In 2000, Al’s business began to hit turbulence and the company lost twenty million dollars. Nevertheless, Al’s added a route from New York to Santiago, Chile, mainly because Defendant’s daughter expressed a personal interest in the route (i.e. she wanted to visit her boyfriend more often). The route never turned a profit. When Al’s was desperate for cash in 2001 to pay back creditors, Defendant and the directors cut ticket prices
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This note was uploaded on 03/07/2010 for the course MGMT 108 taught by Professor Guerin during the Spring '08 term at UCLA.

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CLASS PROBLEM Tower Air - CLASS PROBLEM Als Airline was...

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