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 2017 follow:

1. What is SmoothAir’s strategy? Was SmoothAir successful in implementing its strategy in 2017? 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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Objectives Financial Perspective Increase shareholder value Customer Perspective Increase the number of on-time arrivals Improve brand image Measures Operating-income changes from Actual Target Performance Performance productivity $1,200,000 $1,400,000 Operating-income changes from price recovery $450,000 $600,000 Operating-income changes from growth $500,000 $660,000 Cost savings due to reduction in jet fuel consumption $150,000 $180,000 FAA on-time arrival ranking 1st in industry 2nd in industry Internal-Business-Process Perspective Reduce turnaround time Reduce CO2 emissions Learning-and-Growth Perspective Align ground crews Acquire new energy management tool and technology Percentage of customer survey respondents with greater than 90% approval rating on com- pany's sustainability efforts On-ground time Number of engineering changes that decreased CO2 emissions % of ground crew stockholders Achieve ISO 50001 certification in energy management 100% 96% <25 minutes 30 minutes 10 9 70% Acquire certification by Dec. 31 68% Acquired certification by Dec. 31