Operating Model Validation for Leading Transport Finance Business in Europe

  • Delivered fast turnaround on the time-sensitive assignment

  • Help the client audit and fix a complex modelling framework that had many broken links

  • Built a dynamic and scalable template-based model


CLIENT CHALLENGES
  • A Germany-based bank specialising in transport finance approached Acuity Knowledge Partners to help validate and transform an airline’s operating model for its aviation finance business
  • The client required quick turnaround owing to internally committed time frames, but lacked visibility with regard to the required working of the model
  • The top-heavy client team did not have the bandwidth to add to an already complex model, characterised by a large amount of data and consequent calculations. Internal iterations and updates had taken a toll on the model’s flexibility and auditability
  • Key requirements were the following:
    • Verifying the model, which the internal team had built earlier
    • Refining the model to incorporate significant additional assumptions and scenarios
    • Simplifying the model for the client team to use it as a base model for future projects
OUR APPROACH
  • Acuity Knowledge Partners discussed the scope, client’s expectations and challenges of the current model and assigned an expert financial modeller for the project
  • The project model, key operational assumptions on the industry, preferred financing assumptions and the client note were reviewed to understand the model’s functionality, key drivers and assumptions, and overall structure/flow
  • Gaps in the existing structure were identified and the broad flow and model parameters were defined and shared with the client for further discussions
  • Observations were discussed with the client and, with a few iterations, the project model was transformed into a simplified, yet dynamic operating model controlled by a single input control sheet
  • Relevant outputs and return metrics were provided that could be broken down to single units per aircraft per route
IMPACT DELIVERED
  • Quick turnaround enabled the client to meet its committed timelines
  • The client benefited from Acuity Knowledge Partners’ expertise in this complex modelling assignment, which was handed over from the internal team previously tasked with the project
  • The easy-to-use, dynamic and scalable template-based model provided to the client can be used for any future projects irrespective of the number of key inputs
  • An added functionality to view separate analyses for individual units/parameters helped the client understand the respective unit’s operational economics
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