SmoothAir is a no-frills airline that services the Midwest. Its mission is to be the only short-haul, low-fare, high-frequency, point-to-point carrier in the Midwest. However, there are several large commercial carriers offering air transportation, and SmoothAir knows that it cannot compete with them based on the services those carriers provide. SmoothAir has chosen to reduce costs by not offering many inflight services, such as food and entertainment options. Instead, the company is dedicated to providing the highest quality transportation at the lowest fare. SmoothAir’s balanced scorecard measures (and actual results) for 2013 follow:

Required
1. What is SmoothAir’s strategy? Was SmoothAir successful in implementing its strategy in 2013? Explain your answer.
2. Based on the strategy identified in requirement 1 above, what role does the price-recovery component play in explaining the success of SmoothAir?
3. Would you have included customer-service measures in the customer perspective? Why or why not? Explain briefly.
4. Would you have included some measure of employee satisfaction and employee training in the learning-and-growth perspective? Would you consider this objective critical to SmoothAir for implementing its strategy? Why or why not? Explain briefly.
5. Why do you think Smooth Air has introduced environmental measures in its balanced scorecard? Is the company meeting its performance objectives in this area?

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Target Performance Performance Actual Objectives Financial Perspective Increase shareholder value Measures Operating-income changes from productivity Operating-income changes from price recovery Operating-income changes from growth Cost savings due to reduction in jet fuel consumption $1,200,000 $1,400,000 S450,000 $600,000 SE00,000 $660,000 S150,000 $180,000 Customer Perspective Increase the number of on-time arrivals Improve brand image st FAA on-time arrival ranking เก in industry Percentage of customer survey respondents with greater than 90% approval rating on company's sustainability efforts 100% 96% Internal-Business-Process Perspective Reduce turnaround time Reduce CO2 emissions On-ground time Number of engineering changes that decreased C02 emissions 25 minutes 30 minutes 10 Learning-and-Growth Perspective Align ground crews Acquire new energy management tool and technology % of ground crew stockholders Achieve ISO 50001 certification in energy management 70% Acquire certification by Dec. 31 68% Acquired certification by Dec. 31