Scandinavian Airlines Case
Scandinavian Airlines serves 32 million people and is the largest airline in Scandinavia. It has been a first-mover in many areas and has built a positive reputation for corporate responsibility. Having decided to update its fleet with 55 Boeing 737s, SAS now has to decide whether to purchase DAC green engines.
Arguments for and against purchasing the green engine – Director of Aircraft & Engine analysis
Having spent almost five years on the decision to purchase a new fleet of airplanes, Nas the director of aircraft and engine analysis, was fully involved and committed to researching and presenting the best option to SAS’s management team. The arguments for purchasing the DAC …show more content…
Consideration of the company’s reputation as a first mover will also be argued because purchasing the engines will allow SAS to implement a new technology first and will most likely be beneficial financially. Arguments against the purchase of the green engines are also very similar from SAS’s management team’s perspective as Nas’. The main argument against the purchase is the significant cost of the engines which could be used to implement other elements into the plane that appeal to its passengers. However, the cost of ignoring its stated level of commitment to the environment would be far greater and may have detrimental consequences to its reputation if not followed. Another argument against the engine purchase is that the DAC engines have not been used on the 737 bodies and may have potential complications with integrating the technology, resulting in additional expenses.
Internal and external influences
The internal influences that were involved in SAS’s decision to purchase the green engines include its ability to finance the additional expenditure of the engines, its environmentally conscious corporate culture, and the management team’s commitment to its environmental position. The company has already decided to invest in a new fleet of 55 Boing 737s, so it must have the financing aspect secured. The additional cost of the engines, although significant, will be