BBA Aviation - Financial Summary

I am currently reading through the annual report for 2013 and have noticed that BBA Aviation sold their Aftermarket Services group in February 2014. 

I went through their financial summary and can see that there was a 2% decrease in Revenue from 2012 to 2013, however there was a 6% increase in operating cash flow. It is interesting to see that the aftermarket services group is made up into 3 sections; engine repair and overhaul, legacy support, and APPH. When looking into each section, the one that had the significant decrease was engine repair and overhaul. It seems that the overall market for this section was weaker, which resulted in a restructure, short term disruption and loss of market share. 

Has anyone else's companies sold off one of their groups? 

The other group in my company is Flight Support. They had a 4% increase in revenue from 2012 to 2013 and operating cash flow increased by a huge 17% which is great. 

BBA Aviation - Board of Directors

I am one of those people that leave things to the last minute, not all the time… but most of the time! 

I am reading through Chapter two and Martin has mentioned that many senior managers and directors have accounting backgrounds. So I decided to go and research my company and their Board of Directors. All of the Directors except for one have an accounting/finance background. 

Have a look at your company, do all of the directors or senior management have accounting backgrounds? 

BBA Aviation - Risks Involved

BBA Aviation is made up of two groups: 

Our Flight Support division (Signature Flight Support and ASIG) provides specialist on-airport support services to the owners and operators of private, business and commercial aircraft. We aim to differentiate ourselves from our competitors through our customer relationships, the strength and relevance of our network, technical capability and market-leading customer service. 

Our Aftermarket Services division (Engine Repair & Overhaul and Legacy Support) is focused on the repair and overhaul of engines and the support of aerospace components, sub-systems and systems. We operate with high levels of intellectual property rights, derived from Original Equipment Manufacturer (OEM) authorisations and licences. In 2013 APPH, a landing gear and hydraulic sub-systems manufacturer, formed part of the Aftermarket Services division. This business was sold in February 2014. 

Our operating model supports our overarching objective to deliver exceptional, long-term sustainable value for all our stakeholders. 


The risks involved in the organisation are below - these can be out of the organisations control and can have a huge affect on the organisation, especially financially. It is important for an organisation to be aware of these risks and have a proactive approach, rather than being reactive. 

Risk	Potential Impact	Mitigation
General economic downturn	— Reductioninrevenuesandprofits as a result of reduced B&GA and commercial flying and military expenditure	—  Strongfinancialcontrolstomonitor financial performance and provide a basis for corrective action when required —  Lowfixedcostsallowcostbasetobe flexed to meet demand —  Mixtureofearlyandlatercyclebusinesses
Catastrophic global event (terrorism, weather) with a material impact on global air travel	— Reductioninrevenuesandprofits as a result of reduced B&GA and commercial flying	—  Strongfinancialcontrolstomonitor financial performance and provide a basis for corrective action when required —  Lowfixedcostsallowcostbasetobe flexed to meet demand
Legislative changes causing material increase to cost of B&GA flight relative to alternatives	— Reductioninrevenuesandprofits as a result of reduction in B&GA flying hours	— Activeparticipationinallrelevant industry bodies — Lowfixedcostsallowcostbase to be flexed to meet demand
Ability to attract and retain high-quality and capable people	— Lossofkeypersonnel — Lackofinternalsuccessorstokey management roles — Shorttomedium-termdisruption to the business	—  Remunerationstructuredesigned to reward superior performance and promote retention —  Successionplanningprocessembedded with review at Executive Management Committee and Board level annually —  Proactiveemployeedevelopment
Potential liabilities from defects in services and products	— Reputationalimpactwithassociated deterioration in customer relationships — Lossofearningsfromliabilityclaims	— Standardoperatingprocedureswith routine root cause analysis of all incidents — Liabilityinsurance
Intentional or inadvertent non-compliance with legislation	— Reputationalimpact — Exposuretopotentiallitigation or criminal proceedings	—  Clearcorporatepoliciesandeducation in major risk areas —  Semi-annualcompliancecertification by senior management —  Robustinternalcontrolenvironmentand regular review by internal and external audit
Environmental exposures	—  Lossofearningsfromcostto remediate or potential litigation —  Potentialforlossoflicencetooperate —  Greaterthanexpectedliabilities associated with historical operations	—  Strongproceduralcontrolsandphysical containment when working with fuel or other hazardous chemicals —  Activemanagementofknown environmental matters to minimise costs to resolve

Chapter 1 - A way of viewing a business

Just putting this out there to see what some other students think. I am also majoring in Management so this has my mind thinking about an organisation or accounting firm as a whole.

I found it interesting in the study guide where it talks about when studying accounting and focusing on numbers. If you look at this from a business point of view, do you think a business should solely look at numbers as well?

I personally think its good that this course is not all about numbers. I think that when you are managing a business, numbers only make up one factor of the overall business. Yes you have to be financially stable, and have opportunities to grow and have profit. But, there are so many other factors to consider when having a successful business.

What are your thoughts? What other factors do you think make up a business?

Are you glad this course is not all about numbers?

Sorry for the rambling, this was just a brain dump!

BBA Aviation

The company that I will be looking at is BBA Aviation. 

BBA Aviation is dedicated to being the world's leading provider of aviation support and aftermarket services.  BBA Aviation’s balanced portfolio of market-leading flight support and aftermarket services businesses support a broad spectrum of aviation market segments, including Business and General Aviation (B&GA), Commercial Aviation and Military Aviation.

What we do: Our Flight Support businesses provide specialist on-airport support services to the owners and operators of private, business and commercial aircraft. Our Aftermarket Services businesses are focused on the repair and overhaul of gas turbine engines and the service and support of aerospace components, sub-systems and systems.

BBA Aviation employs around 12000 employees over 200 locations and is headquartered in London. 

What drives us: This objective is shared by all Group businesses which are individually and collectively focused on:

• Consistently exceeding customer expectations;
• Valuing and empowering our people in a zero incident, safe environment;
• Encouraging innovation;
• Working together for greater gain;
• Always behaving with integrity and respect.

Our Vision, Mission and Values are what link all BBA Aviation companies and employees together as one team. They apply to everyone, and to all the businesses and functions across the BBA Aviation group.  They describe our operating system, what each of us focuses on, cares about, and the way we behave.

In order to support delivery of the vision, each year BBA Aviation’s Executive Management Committee sets a series of short and medium-term specific and measurable goals which are then cascaded throughout the group. Each business has actions aligned to the achievement of each of the short and medium-term goals, and the execution of those actions is actively monitored by Group management.

Link to BBA Aviation website -  http://www.bbaaviation.com/home.aspx 

About me

Hi everyone,

I am currently in my 2nd year of university studying a Bachelor of Business majoring in Human Resources and Management. I work full time as a Human Resources Cadet for Gladstone Regional Council. Looking forward to studying this course, and hopefully I enjoy it as much as Human Resources!  :)