Originally Posted by havick
Why would FTA buy it (someone else's problems)?
The clients may move on their own accord.
Businesses with structural and operational problems evidenced by poor performance are often seen as a sacrificial part of a wider business when restructuring and are often picked up for a bargain price. New management comes in and fixes it up and then hey presto, a performing business that is worth a lot more than was paid for it.
There may be many other business reasons other than simply increasing market share. I will share one or two of my thoughts although I do have others.
Oxford has a Pretty slick marketing model (Petteford the salesman saw to that!!) and has a fleet of modern aircraft fitting with G1000's. This is what the airlines are now demanding and an operation with an existing fleet is an option to be considered if you have more clients than you can handle knocking at your door and you don't want to wait to buy new aircraft and simulators fitted with the latest avionics from manufacturers.
Sure, potential customers could migrate from Oxford to say FTA or CTC but if you don't have the capacity (access to sufficient levels of instructors, aircraft , ground school facilities, accommodation etc.) then you just can't take them in. From what I am led to believe FTA and CTC are at max capacity as it is with their existing clients and have little capacity to accommodate potential new clients.
For FTA and CTC it would perhaps be an opportunity for expansion whilst at the same time increasing their client base to move some of their eggs into other baskets. With the aus dollar still high against the us dollar competing for international work is tough and as an australian company, Oxford have two significant domestic clients including a significant stream of 'privately funded' guys from Swinburne uni (who drawdown government funding) as their preferred status flight training provider.
Perhaps Swinburne might even have a look themselves seeing as they spend a significant amount of money there each year and Oxford were not exactly shall we say 'competitive' price wise!!
More to follow