The first commercial airline flight occurred in 19142, St. Petersburg to Tampa Florida aboard the Airboat Line, passengers paid $5 for the 18 mile flight. From these humble beginnings, commercial aviation in the US has grown into an industry, which represents over $120 billion in assets, transports over 650,000,000 passengers annually over a distance of 6 billion miles3. Social scientists say the world is becoming smaller and smaller as we move into the new millennium. It is air-travel, which is the driving force behind this phenomena.
Air-travel has transformed from a luxury for the privileged few, to a commodity within reach of many people. Compared to other modes of transportation air-travel is among the safest and most efficient. Globalization is a direct result of the expansion of the world’s airline industry. Air-travel demand since 1965 has outpaced economic growth. During the next 20 years this trend is expected to continue. Technology advances such as video conferencing and the Internet have enhanced growth in air-travel. While this may seem counter intuitive, the explosion of information technology has fostered professional relationships around the globe which ultimately leads to an increase in travel.
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An experimental study was performed to create a structured decision making process, as it pertains to a corporate growth strategy. The thesis focuses on a segment of the growth
strategy in the area of mergers and acquisitions. A multistage decision model was built using a set of axioms defined by a process flow of the acquisition steps. The decision model makes use of decision fault trees using experimental probabilities.
The model is capable of revealing decision paths which may be attractive, based on value but with unfavorable risk. The model can act as a risk management device for managers. Risk can be managed by choosing one path with favorable risk over another, or risk can be managed by the order in which the decisions are made. As more information is learned from acting on low risk decisions at first, new information will improve the probability previously riskier decisions. The learning from previous less risky decisions
can provide the organization with base information for future decision making. This thesis provides a case study for decision making of a corporate growth strategy at Pratt & Whitney Aircraft. The focus of the study is on Pratt & Whitney’s Aftermarket
Services organization which is currently undergoing massive growth. Included in this analysis is a study of the airline industry and a look at the drivers which are causing the Maintenance Overhaul and Repair market to consolidate into service providers who can provide ‘One Stop Shopping’ for their customers.