Category: Airlines

Introduction

Commercial airline transport remains to be the safest mode of transportation around the world (Federal Aviation Administration [FAA], 1). Statistics reveal that in 1998, out of the eighteen million flights made by travelers only ten cases were reported to be fatal accidents. This is a very small number compared to those recorded by other modes of transportation. Airline accidents do not result from a single cause but from a chain of events that lead to each other. The risk of commercial airline fatalities has been reducing drastically with the increase of flights in recent years (Gellman Research Association (GRA), 1997). The decline has been largely contributed by more proactive measures adopted by aviation regulation authorities like FAA to enforce high aviation standards (Bowen & Lu 4). The purpose of this paper is to investigate the impact of commercial airline safety on the rate of accidents and their relationship to security standards.

Accident rates

According to the National Transport Safety Board (2005), there were 170 commercial airline aviation accidents reported in 2005 resulting from 1688 air crafts. This was 3% higher than that recorded in 2004. Out of these reported accidents only 321 were fatal accidents leading to 563 fatalities. There were 271 serious injuries and 462 minor injuries reported during the same period according to the statistics. Despite the slight rise in 2005, the prevalence of airline accidents has been declining consistently between the years 1996 to 2005. Accidents in the period of review decreased from 1908 in 1996 to1670 in 2005 while the fatal accidents declined from 361 to 321.

From a high of 636 in 1996, fatalities decreased to 563 in 2005 further signaling a decline in the number of commercial airline accidents globally. In US, the trend in different states reflected the state’s population density, the local terrain, weather patterns in the state, and types of flight operations. To illustrate this, California which is highly populated had a higher number of accidents in comparison to other states while Florida and Texas were favorite travel destinations. The three states are also known to have the greatest number of active aircraft and pilots. Alaska in particular presents unique challenges to airlines due to its hazardous terrain, weather, and infrastructure hence ranking 4^th among the states with the highest number of accidents. Single-engine piston airplanes were noted to cause most of the accidents reported accounted for 74% of all accidents and 73% of the fatalities. According to the board, 42% of the accidents occur at the airport while 47% occurred away from the airports resulting in higher fatalities. This is because those that occur near airports involved lower altitudes and lower speeds as compared to those that occurred away which involved higher altitudes at higher speeds.

Causes of commercial airline accidents

Aviation safety standards contribution

The safety standards of aviation have been blamed for the most of the air accidents involving commercial airlines. The contributing factors leading to deterioration of safety standards can be either human or natural. Among the listed factors include:

Environmental factors

Weather conditions are usually cited as contributing factors rather than the causes of accidents. Environmental conditions can affect any aircraft to a certain extent resulting in poor air safety standards. The main reason is that aircraft control is highly dependent on visibility aspects such as the speed, distance, the aircraft orientation, and the altitude of the plane. Windy conditions, high humidity and convectional weather conditions are among the culprits blamed for accidents especially during takeoffs and landing of aircraft. Sometimes weather conditions deteriorate leaving the pilot to depend on the aircraft instrument to control the plane. According to available data, 16% of the accidents that took place in visual conditions were fatal while 65% of those that occurred in instrument conditions resulted in fatalities. The reason is that the bad environmental conditions are likely to result to pilot disorientation, loss of control of the aircraft, and collision to objects or terrain resulting in heavier casualties. Poor visibility due to the above factors is thus the major cause of weather-related mishaps.

Poor lighting conditions

Poor night vision can be hazardous to pilots due to the associated difficulties in locating potentially hazardous objects such as mountains and other obstructions in addition to misplaced perception caused by poor visibility. The National Transport Safety Board reports that the largest proportion of fatalities occurred at night as a result of poor night vision. Night accidents were twice as fatal as daylight accidents. Poor weather conditions impair visual cues which hamper the pilot’s judgment and his ability to handle malfunctions in aircraft equipment.

Human factors and negligence of the crew

Human error contributes largely to many the air accidents. Out of the 1, 372 accidents in 2005, 72% were as a result of aircraft handling and control which was followed closely by planning and decision-making processes by the pilot at 36% while the control of aircraft equipment contributed to 11% of the accidents. It is also worth noting that out of the 116 accidents attributable to human performance, 35% were as a result of the incompetence of the pilots. Blunders and negligence by the crew can cause undesired effects to the airplane leading to injuries and fatalities. The crew is at times presented with situations that call for prompt mental processing and reaction time to solve problems that exceed their limits resulting in unavoidable accidents (Weigmann & Shappell 1010). Failure to coordinate the activities of the crew effectively might lead to confusion which might be catastrophic to the plane.

Corporate negligence has also been pointed out by Hedlund (1) as part of the indirect culprits of the commercial airline accidents. The airline investors have been known to seek any means available to minimize their operational costs. To do this, they have resulted in unethical methods of operations by pushing pilots to make unsafe landings in order to avoid paperwork, to run aircraft with minimum amount of fuel and to make other reckless decisions.

Poor design and faulty equipment

Aircraft control involves precise calculations and delicate mechanisms that involve complex technology. Sometimes accidents occur due to poorly maintained equipment which increases the possibility of mechanical failures in the aircraft. In recent years the Federal Aviation Administration has enforced stringent measures dictating how often maintenance processes have to be carried out on an aircraft (Devine 1). According to Hedlund (4), aircraft must be manufactured in a way to withstand strong winds and the stress associated with takeoffs and landing.

Non-compliance with Federal Aviation Administration regulations

Some of the airlines involved in accidents are known to have flouted the stringent rules that govern the various aspects of air travel, security of luggage, the conduct of pilots, and airports. These rules are meant for all stakeholders in the aviation industry and infringing them would amount to inviting a possible disaster. However, some airlines decide to overlook them either partially or in totality which at times has resulted in catastrophes. Assessment carried out on several accidents has pointed out non-compliance which has endangered the lives of hundreds of passengers along with the crew and also the people on the ground. A number of industrial players have been found to circumvent regulations by outsourcing aircraft maintenance and inspection services to cut costs. They only ensure the minimum precautions have been taken into consideration which has an effect of compromising the safety of the aircraft and those on board.

Control tower errors

Miscommunications by the air traffic controllers have occurred with terrible consequences to both the planes and the passengers on board. The traffic controllers are mandated to coordinate various aircraft and pilots in order to prevent collisions from occurring. However, situations have occurred where inaccurate or unreliable signals about weather conditions, landing instructions, and runway positions have been given causing accidents. Due to the fact that pilots rely heavily on the information received from the aircraft controllers, unreliable or inaccurate information has adverse effects on the decision-making processes of the crew. This means that errors on their part can be detrimental to the safety of the plane including the passengers on board. Such errors are known to have resulted in crashes and collisions of aircraft in the airports.

Poor regulation of the aviation industry

The deregulation of the aviation industry led to the deterioration of the safety standards of the industry (Rose 75). This was originally initiated to achieve some economic policy objectives in the industry. As a result some private airlines relaxed the regulatory standards leading to declining in safety of the aircraft and the associated services. This poses a threat not only to the travelers but also to the crew and the companies. Overrelaxation of the key rules leads to some companies neglecting the safety precautions to maximize their gains at the expense of passenger safety. Many gullible companies have been known to put their economic interests ahead of the satisfaction of the customers which is further compromising the safety standards of the industry.

The poor system design and mismanagement

The joint security arrangement between the three stakeholders resulted in lack of ownership of the program resulting in laxity in surveillance. This poked holes in the system that could be exploited by malicious groups to inflict serious damage into the country. Comprehensive screening could have averted sneaking of any dangerous weapons but lack of motivation due to weak supervision of the screening agents resulted in ease of penetration of these weapons and other explosives without detection. FAA largely failed to implement performance standards leading to laxity in execution of duties by officers. All studies carried out prior to 2001 pointed out to poor regulatory standards of FAA which exposed the whole system to infiltration by the enemy as happened in 2001 Al Qaeda attack.

Inadequate investment in security

There was inadequate investment in security infrastructure prior to 2001. The existing technologies at the time were decaying and could not be relied upon to provide adequate security to the airport and the airlines. This presented a heavy challenge in the midst of advancement in modern crime. Criminals were quickly learning to find their ways around the existing systems thus necessitating a quick overhaul of the system. However, the existing security arrangement was not flexible to changes and lacked the drive to institute lasting solutions to militate against any potential dangers. This caused redundancy in the security systems rendering the systems ineffective. Since most of the financing was provided by the airlines and airports, they obviously opted for the least expensive option of security provision hence compromising the quality of security standards.

Loopholes in the airport security

Security loopholes in airports have been exploited by terrorists and other malicious groupings with grief consequences. The world over, airplanes have been hijacked over time with terrible results. This is what culminated in the September 11 disaster where Al Qaeda terrorists managed to infiltrate the US security to gain access to the airplanes carrying dangerous weapons. The height of insecurity is when the terrorist manages to sneak weapons to the airplanes hence exposing vulnerability of the past security arrangements. The crash of aircraft into WTO and Pentagon were not isolated cases as it has happened before with other airlines especially with the infamous Lockerbie bombing disaster where an airplane was exploded mid-air leading to heavy casualties. This led to the loss of confidence in the previous security arrangement that was dominated by Federal Airport administration, airports, and airlines. Some of the weaknesses noted in the system included:

• Easy accessibility to airport controls. Tests carried out at various airports revealed that unauthorized access to airports was relatively easy which increased the risk of the airport systems. Investigating agents using counterfeit law enforcement identification badges easily gained access to restricted areas that are often referred to as secure areas. They managed to penetrate security barriers into the airports and walk to the departure gates without any escort. The agents accessed secure areas in 68% of the trial periods boarding aircrafts 117 times. This indeed amounted to serious breach of the airport security.
• Weaknesses in the screening processes of passengers and luggage. Tests done by FAA in 1987 revealed that screeners missed potentially harmful objects by 20% in all the tests carried out which was significantly worrying. Screening deteriorated onwards until 2001 when the systems were revamped to seal loopholes that were becoming costly to many nations especially after the events of September 11 attacks which exposed their unreliability. Modern technology since then has been integrated into the systems to boost their performance especially their capacity to detect security infiltrations.

Improving security standards

Industrial coordination

Coordination of all the key stakeholders of the aviation industry will be vital for effective improvement of the safety standards. Concerted efforts will need to be undertaken in order to bring all the industrial players on board so as to facilitate achievement of high levels of safety standards. However, all efforts need to be cost-effective while maximizing the intended benefits. In these economic turbulent times, it will make little sense to introduce a strategy that will depress the revenues of the firms. Such a move will obviously fail to lead to non-compliance by the industrial players. In such scenarios, the airlines will result skirting around the regulations to avoid the extra costs imposed upon them. By unilaterally imposing rules, the compliance levels will tend to be slow or flouted altogether leading to failure. We can borrow from IATA’s goal of ensuring that aviation security standards are mutually accepted by the stakeholders in the industry (IATA 3). Apart from ensuring passenger safety, the strategy will also help to minimize the negative perception by the customers and improve the flow of cargo thereby restoring confidence to the industry.

Integrating security management system

This system will provide an opportunity to maximize efficiency through introduction of a risk-based strategy to boost the security standards of the airline. This method of implementing aviation security is usually performance-based leading to a faster achievement of the intended objectives. It allows the implementation of the most cost-effective and sound security precautions and framework within the managerial structure. This further makes sure that security is managed as part of the organizational operational processes. This will mean working in close coordination with the airlines, airports, and the government. IATA has already gone on the ground by conducting training on the security management processes for airlines globally. However, the system ought to be tailor-made to suit different environments of various countries. This is because different countries have varied security needs depending on their locations.

Harmonization of the security systems

Each firm has got its own internal security system that it applies in its in-house processes. These plans ought to be integrated in order to avoid friction and to achieve uniform goals. Immediately after the September 11 attacks, there were rafts of individual measures that were developed that were very rigid becoming very hard to amend. This is why it is important to negotiate with the government in order to seek ways of harmonizing the systems. Even harder is the fact that there lacks harmony on the global scale, a problem that causes disunity in strategies. This process will have to be synchronized to succeed in implementation of the system. Screening of passengers and their cargo will be stepped up using the latest technology without necessarily inconveniencing them by adopting a more customer-friendly approach. These approaches have gained prominence since the 9-11 attack.

Installation of aircraft safety equipment

These have become standard features in most modern aircraft especially Boeing and airbus which place particular emphasis on their use on their aircraft. These have included among others evacuation slides to assist travelers to make their way out in case there is an occurrence of an emergency (Devine 1). Others include improvement of durability of the performance of turbine engines and use of computerized auto-recovery systems in aircraft. The landing gear has also been improved to improve the security standards of the airplanes.

Conclusion

The drastic decline in commercial airline security and the consequent rise in the rates of accidents were largely a factor in the decline of the security standards at the airports. The reason for the decline in security standards was mainly due to inadequate investment in security, infrastructure, and the weak security arrangement between FAA, the airports, and airlines which did not give clear mandate as to who would be in charge of the security system leading to lack of ownership of the program. This in turn led to poor supervision of airport staff and relaxed compliance with security regulations by the airlines. As a result, there was a marked breach of security and a rise in the rate of accidents among the airlines.

Works cited

Bowen D. Brent., Lu, Chien-tsung. “Measuring the safety performance of 10 major air carriers in the United States”, the airline safety report (1997-2000). Web.

Devine, Joseph. “Causes of Airplane Accidents”. EzineArticles.com. 2009. Web.

FAA. Aerospace Forecasts: 2001-2012. Washington, DC: Federal Aviation Administration [FAA], 2001.

Gellman Research Association (GRA). “A Report on Issues Related to Public Interest in Aviation Safety Data”. Nasdac, 1997. Web.

Hedlund, Baum. “Accident causes”, Airlnecrash-lawyer, 2009. Web.

IATA. “Turning challenges into opportunities”. Airlines International, 2009. Web.

National Transportation Safety Board. Annual Review of General Aviation Accident Data 2005. Publication Type NTSB/ARG 2005. Washington, DC. Web.

Rose L. Nancy. “Fear of flying?” Economic analysis of air safety, 1992. Web.

Wiegmann A. Douglas., Shappell A. Scott. “Human error analysis of commercial aviation accidents: Applications of the human factors analysis and classification system (HFACS)”. Aviation, Space, and Environmental Medicine. Vol. 72 No.11. 2001. Web.

Introduction

In the contemporary era, the access of Low Cost Carriers (LCCs) has completely transformed the airline sector. Ryanair, like several other Low Cost Carriers, could be termed as employing reduced costs to be desirable to a great number of passengers that could not have been thought of being possible before (Malighetti, Paleari & Redondi 2009).

Nevertheless, this strategy fails to bear fruits for every one of the Low Cost Carriers and thus it is significant for airports to have either a great demand for Low Cost Carriers traffic or a constructive economic prediction to augment requirement for destination-to-destination traffic.

In addition, passengers are ready to go further in search of low cost flights thereby posting a slighter concentration on the present catchment region of airports and more on availability. Requirement could as well be augmented by putting in place convenient slot periods, in conjunction with auxiliary airport facilities, thus allowing the servicing of both the company and the vacation marketplace.

This move as well boosts functional effectiveness by augmenting the use of aircraft. This paper analyses the cost saving business exercise that budget airlines initiated and crucially assesses its impact on the tourism sector.

First part

In the article by Warnock-Smith and Potter (2005), the authors state that in selecting the airports to function from, some aspects are taken into consideration by Low Cost Carriers (LCC). With respect to Ryanair, airport selection aspects are encompass reduced airport costs, fast turnarounds, easy terminals, speedy check-in amenities, excellent passenger amenities and availability. An extra aspect is the rivalry between the airports and airlines.

A number of airlines in Europe exploit powerful airport rivalry and bargain with as many as more than three airports, in spite of bearing the mentioned purpose of setting up a fewer number of routes. This aspect takes advantage of the augmenting commercial concentration of airports in Europe that have brought about in a yearning to draw fresh airlines at nearly any charge.

Warnock-Smith & Potter (2005) state that owing to increased airline competition; the intensification in the number of Low Cost Carriers has generated more rivalry between them, in addition to raising the number of liquidations. The aforementioned aspect means that the selection of airports could as well be influenced by airline competition (Warnock-Smith & Potter 2005).

According to Warnock-Smith & Potter (2005), there exist dissimilarities around the fundamental Low Cost Carrier representation and, consequently, some varying huddles were considered to quantify these dissimilarities. These differences include the following.

Airline origin – for the formation of Low Cost Carriers, there has been consideration of two perspectives. One of the perspectives includes the formation of fresh airlines devoid of previous functional practice, for instance, EasyJet. The second perspective is that Full Service Carriers (FSC) and charter airlines have adapted themselves or a section of their functions to the Low Cost Carrier representation, for example, Air Berlin.

A number of the dissimilarities involving airlines and adaptations could be present as the latter frequently utilise their previous functions as the beginning of reduced charge services. In this regard, reliability in routes and workforce subsists. Importantly, dissimilarities associated with great airport rivalry, extra airport facility and increased airline rivalry exist.

Airport rivalry is seen as somewhat insignificant to the set up carriers but significant to improved airlines (Warnock-Smith & Potter 2005). A good explanation for this observation could be the improved Low Cost Carriers looking to influence an enhanced agreement from the airports they presently supply.

Contrary, newly established airlines consign a bigger significance on the stipulation of standby airport facility. With the fact that adaptation frequently holds on to their past functions, this element turns out to be predictable and is as well replicated via a vaguely lesser obligation for suitable slot periods, based on the fact that they already possess slots assigned to them. The ultimate dissimilarity is associated with airline rivalry. Additionally, newly established Low Cost Carriers rate the aforementioned aspect more greatly.

These airlines seem to take up market allocation from full service carriers who are their business rivals, in addition to generating fresh markets thru decreasing the charges of air travels.

Likewise, the existence of competitors shows that an air travel market prevails. Adaptations already bear a market share that they desire sustaining (Warnock-Smith & Potter 2005). The existence of rivals could result in the present clients shifting to different airlines, the cheapest charging in addition to the ones desiring an extra-classic to optional full service carriers.

Airline size – with the present gains of the airport sector from economies of scale, there is anticipation that airport selection aspects could be affected by the airline size, which is mainly displayed four aspects. These aspects include excellence experience of Low Cost Carriers, excellent non-aeronautical returns, great instance of airline rivalry and excellent surface admittance.

Out of the aforementioned aspects, airline rivalry obtains the highest standing from superior airlines. In accordance with Warnock-Smith & Potter (2005), smaller Low Cost Carriers turn out to be less risk indisposed during judgment making pertaining to selection of airports. Lastly, smaller LCCs face the difficulty of making their brands known and they end up not being as much popular as those of big LCCs (Warnock-Smith & Potter 2005).

Time of entry in the Low Cost Carrier market – it is evident that the first movers in this market have a greater benefit. Thus, dissimilarities between the airport selection aspects could come up (Warnock-Smith & Potter 2005). Further, fresher airlines are more indisposed to airline rivalry because they are not excellently founded.

According to O’Connell and Williams (2005), LCCs have reconstructed the competitive setting in the liberalised marketplaces and have generated important influences in the international internal traveller marketplaces that had earlier been heavily dominated by FSC. In the United Kingdom, about 15 percent of the present airlines are currently offered by LCCs, with Ryanair and EasyJet playing the greatest role. The LCCs have focused on simplicity, effectiveness, output, and a great use of assets to ensure low charges.

Before 2002, LCCs did not exist in Asia Pacific rim. Some airlines came into existence in the early days with no noteworthy influence in their markets (O’Connell & Williams 2005). Examples of the aforementioned airlines include Sky mark, JAL Express, Citilink, and Air Do. The slow advancement that was initially evident was partially out if the concept that LCCs could ultimately flood the Asian markets.

O’Connell and Williams (2005) further state that LCCs draw a great number of the youthful individuals. Most of the young people had non-trade reasons like paying visits to families and friends or educational reasons. The difference in age of passengers in the dissimilar carriers is evident.

The elderly people normally have a tendency of favouring the FSCs, probably since they provide extra airline products that are not provided by LCCs. The individuals that travel for business purposes have a tendency of using singular travels with the individuals that travel for leisure using group travels.

The location of secondary airports far from the big cities creates no noteworthy hindrance to the utilisation of LCCs (O’Connell & Williams 2005). Te airlines in Europe have frequently proposed that people who use LCCs have an inclination of exploiting savings obtained from cheaper charges of their accommodation, like hotels.

The article by O’Connell and Williams (2005) appears to be more credible than the one by Warnock-Smith and Potter (2005) because unlike the article by Warnock-Smith and Potter (2005) that discusses the European market alone, the article by the former compares two markets (in Europe and Asia).

O’Connell and Williams (2005) disclose that even with the differences involving passengers in LCCs and those in FSCs, there seems to be no dissimilarity in the approach and concept of the two types of passengers in the two markets. In addition, a powerful prejudice exists towards youthful individuals using LCCs. It is also appealing that these travellers shift to incumbents after getting enough income in later years (O’Connell & Williams 2005).

Unlike the article by O’Connell and Williams (2005), this article makes it apparent that passengers on the LCCs have a high inclination to cost and seem to organise their travels by choosing the cheapest airfares. It thus seems that the brand status of LCCs has turned out to be entrenched in the mentalities of clients.

Contrary as the article suggests, travellers on the FSCs will not mind a high charge if it comes with an extra product provided by the carriers. Finally, the article by O’Connell and Williams (2005) illustrates that perfect situation for travellers requires low charges in addition to the further products provided by the incumbent airlines. Thus, it appears that travellers desire a situation where the two airlines come close together.

A suitable journal paper on the topic is one by Salanti, Malighetti, and Redondi entitled Effects of all-inclusive pricing regulations on airfares: an empirical study of low cost airlines. This article discusses the regulatory strategies enhancing cost transparency and that are usually considered welfare boosting in view that extensive and correct information promotes competition (Salanti, Malighetti & Redondi 2012).

Additionally, competition boosts the interests of clients. This article further compares the charges and the effect of dynamic charging used by both Ryanair and EasyJet in their market in Europe. It is evident that the “two carriers lowered their charges, dynamic charging turned out to be apparent in every route, and that charges on the Italian routes proofed an inclination to come towards equal prices” (Salanti, Malighetti & Redondi 2012, p.5).

A different suitable journal paper on the topic is by Alamdari and Fagan entitled Impact of the adherence to the original low‐cost model on the profitability of low‐cost airlines. From this article, it is indubitable that low cost action has turned out to be a triumphant feat in the airline sector.

The LCCs had a tendency of pursuing a differentiation policy instead of cost leadership (Alamdari & Fagan 2005). The aim of this journal article is to evaluate the intensity by which LCCs has been adjusted with time, and to determine if the level of compliance with the initial model has in any way influenced the profits of LCCs.

This journal paper illustrates that even if a rising number of LCCs are attaining low functioning charges, providing low charges, and realising high profits; it is proposed that compliance to the initial model could guarantee high productivity.

Second part

Ryanair is among the initial European airlines that instigated the cost saving process back in 1992. The greatest competitor of Ryanair is EasyJet and started its operations in 1995. Even if the experience is somewhat recent, the dazzling outcomes achieved by budget airlines in the tourism sector necessitate intellectuals to assess the reasons behind their triumph.

Ryanair has been typified by swift advancement, owing to the deregulation in the airline sector and the accomplishment of the cost saving operation model. The company has established the cost saving operation model thus redefining the airline and tourism industries (Malighetti, Paleari & Redondi 2009).

Its greatest competitor, EasyJet, has as well taken up a comparable model. Nevertheless, Ryanair has maintained its leading position in the cost saving business operation. The firm management over the price base of Ryanair has enabled its capacity to provide the cheapest service while simultaneously retaining its profitability.

During a period when price is the most powerful propeller of the client selection, the cost saving exercise by Ryanair offers it a competitive advantage. This case study discusses the way Ryanair employed a cost saving business exercise (that it initiated) to turn out to be a leading airline in the tourism sector.

Ryanair employs its online portal and mobile phones in selling and booking of its flights. Nevertheless, Ryanair affirms that nearly all of its bookings are made through the Internet and as a result, Ryanair does not require many travel agents. A number of other players in the industry have to pay their travel agents an amount that exceeds 15 per cent of their income. In this regard, it is evident that Ryanair has adopted a cost saving approach (Malighetti, Paleari & Redondi 2009).

Since the company does not have many costs to pass on to its clients, it is therefore able to provide its services at a cheap cost. The company functions at low charges at destination-to-destination flights in Europe, the United Kingdom and some parts of Africa like Morocco. Ryanair provides more than 1,000 flights each day with over 150 destinations. The Ryan family started Ryanair Holdings Limited in the mid 1980s.

Initially, the company the company has a plane that could accommodate just 15 people. From its start, the company has sought a violent expansion strategy, resulting in the creation of new routes as well as fresh functioning regions. From its aggressive operation, Ryanair has become one of the major airlines for flights across the globe having served more than 72 million travellers by the close of 2011.

The operation by the company represents a very creditable performance in a competitive sector. Ryanair has to compete intensely with other budget airlines like EasyJet to ensure maintenance of the leading position. Unlike other players in the industry, Ryanair offers purely a destination-to-destination service.

The reality that the company offers services directly to end terminus make Ryanair capable of shunning the charges related to connecting of travellers, luggage transfer, and transport of passengers to different destinations before alighting. Moreover, the point-to-point operation by the company eradicates numerous potential drawbacks of having to pay travellers for routes missed due to holdups.

The destination-to-destination approach thus provides competitive advantage since travellers frequently perceive it as more suitable when judged against an expedition that entails connection of flights (Dobruszkes 2006). The company provides flights at the lowest charges ever in the market, as for this reason the “frills” provided by its competitors like criterion are alternative additions with Ryanair.

The company provides a purchase-onboard arrangement where passengers buy whichever drink or food they take a while on the journey and there exist not a single literature without charge. Upon demand by the client, sick bags are offered, entertainment in the course of flight does not exist, the seats lack pouches and the personnel must get uniforms at a cost.

Moreover, travellers are not capable of booking seats of their choice. These practices assist in making the reservation arrangement of Ryanair easier and less expensive to run. Travellers as well have to pay a small fee of 6 pounds while booking flights through the Internet and £12 when booking through mobile phones, which plays a key role in saving the company the expenses of physical bookings at the airports.

Ryanair in addition does not provide air bridges leaving the travellers with the choice of either walking there or board cars. Furthermore, this element acts as a cost saving approach for the cars are operated by the company and travellers board them at a fee. The company markets itself as a LCC and in reality boasts of being the most budget (Malighetti, Paleari & Redondi 2009). Ryanair functions outstandingly in pushing one persistent message: inexpensive services.

The company saves on the expenses that would have otherwise been spent on promotions as it does not use advertising services with agencies and instead opts to conduct all the promotion actions from within.

The advertising operations of the company simply consist of inexpensive advertisements in newspapers and on the Internet that highlight the fact that Ryanair provides the cheapest services to its different destinations. The cost is vital to the image of the adverts and is normally indicated in clear and bold writings. Ryanair as well employs controversy to market itself.

Recently, it has hit headlines o the fact that it is intending to charge its toilets in the course of flight and the notion of monitoring pornography during the flights. Nevertheless, all this publicity guarantees the staying of the company in the news as well as in the mentalities of airline passengers (Barros & Peypoch 2009).

The affirmations of the company offering the cheapest services are supported by facts. In accordance to newspapers across the United Kingdom, the average fee charged by the company for flight at the close of 2011 was 27 pounds.

When this element is judged against the prices of it competitors like EasyJet (with an average charge of 49 pounds, Ryanair remains the cheapest. Importantly, the seats of the company are not sold at the same cost, as 70 per cent of them sell at the cheapest and advertised charge with the other 30 percent selling at a higher charge.

The company is so certain of maintaining its cheap charges that it conducted a charge guarantee from late 2010 to the close of 2012. Reducing the charges as much as achievable is vital to the triumph of the company as it permits it to seek an aggressive low-cost strategy. Ryanair must nevertheless face the challenge of increasing costs, mainly concerning fuel, which bears a principal noteworthy influence as fuels take up around 40 percent of the operation costs.

With the fuel prices ever increasing, it poses a threat to the cheapest service strategy of the company and the company has of late slightly increased costs of its services.

Nevertheless, this increase in charges was lower than the increases in the cost of fuel and thus the company was able to retain its reputation as the cheapest in terms of travel charges (Malighetti, Paleari & Redondi 2009). This challenge must sensitise the company to seek aggressive means to ensure maintenance of the low-cost strategy.

Conclusion

In the modern times, the access of LCCs has utterly transformed the airline and tourism sectors. Ryanair, like some Low Cost Carriers, could be regarded as employing the cheapest costs to be enviable to a vast number of travellers that could not have been considered as achievable before.

In picking the airports to function from, some features are taken into deliberation by LCCs. There exist divergences around the basic Low Cost Carrier representation, and subsequently some varying jumbles were considered to compute these dissimilarities. The majority of the youthful people have non-commercial reasons like paying visits to relatives and friends or for educational reasons.

The distinction in age of passengers in the different carriers is apparent. The aged individuals usually have an affinity to the FSCs, possibly because they provide extra airline products that are not supplied by LCCs. Ryanair has established different cost saving operations thus redefining the airline and tourism industries. Nevertheless, the company has to be more aggressive in a bid to maintain its leading position.

Reference List

Alamdari, F & Fagan, S 2005, ‘Impact of the adherence to the original low‐cost model on the profitability of low‐cost airlines’, Transport Reviews, vol. 25 no. 3, pp. 377-392.

Barros, C & Peypoch, N 2009, ‘An evaluation of European airlines’ operational performance’, International Journal of Production Economics, vol. 122 no. 2, pp. 525-533.

Dobruszkes, F 2006, ‘An analysis of European low-cost airlines and their networks’, Journal of Transport Geography, vol. 14 no. 4, pp. 249-264.

Malighetti, P, Paleari, S & Redondi, R 2009, ‘Pricing strategies of low-cost airlines: The Ryanair case study’, Journal of Air Transport Management, vol. 15 no. 4, pp. 195-203.

O’Connell, J & Williams, G 2005, ‘Passengers’ perceptions of low cost airlines and full service carriers: A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines’, Journal of Air Transport Management, vol. 11 no. 4, pp. 259–272.

Salanti, A, Malighetti, P & Redondi, R 2012, ‘Effects of all-inclusive pricing regulations on airfares: an empirical study of low cost airlines’, International Journal of Management, vol. 29 no. 3, pp. 3-15.

Warnock-Smith, D & Potter, A 2005, ‘An exploratory study into airport choice factors for European low-cost airlines’, Journal of Air Transport Management, vol. 11 no. 6, pp. 388–392.

Introduction

Over the past century, aviation has become a critical industry all across the world. Due to globalization, people and goods need to travel at a faster pace through longer distances. As air transportation increases in volume, implementing safety measures in aviation is a major concern for government agencies all over the world. The amount of general aviation accidents per year has been steadily declining over the years.

The National Transport Safety Board (NTSB) however notes that the relative portion of general aviation accidents due to weather-related issues has remained steady, ranging from between 6% to 9% of annual general aviation accidents (National Transport Safety Board [NTSB], 2014). Historically, about 66% of all weather-related aviation accidents are fatal, a rate that is three times higher than the overall fatality rate of general aviation accidents (Kulesa, 2002).

In 2014, there were 1213 general aviation accidents in the US, with 253 being fatal involving 405 deaths (General Aviation Manufacturers Association, 2015). According to the NTSB, over 25% of all these fatalities occurred during instrument meteorological conditions (IMC). Since the weather is a frequent cause for general aviation accidents, it is important to understand the mechanism with which it poses a threat to aviation and develop possible solutions to counter these threats. This paper looks at the accident involving Continental Airlines Flight 1404 and looks at how the weather played a part in the events surrounding the accident. The paper will also develop several recommendations based on the analysis of the case.

Background

Continental Airlines Flight 1404, departed from Denver International Airways on 20 December 2008. The plane utilized the left side of runway 34R but a post-crash fire ensued during take-off. According to the NTSB accident report, the initial preflight procedure proceeded as usual. After the pilots completed all the preflight checks, they taxied towards the runway without problems. The local traffic controller informed the pilots that the wind strength was 27 knots from 270⁰(NTSB, 2010).

The pilots received clearance to take off from runway 34R at a departure heading of 20⁰. After acknowledging the clearance, the first officer advised the captain on the power settings based on the data offered about wind conditions. At the time of acceleration, both the captain and the first mate observed that clouds were rolling in at a fast place and that the wind was picking up. During acceleration, when the plane had reached a speed of about 90 knots, the airplane began shifting towards the left of the runway. Investigations by the NTSB revealed that the airplane veered left 2600 feet away from the approach end of runway 34R (NTSB, 2010).

It then crossed an adjacent service road and taxiway before stopping near the airport’s fire station, at a heading of about 315⁰. The airplane had become airborne as it was crossing the uneven terrain causing a heavy impact as it touches the ground just before crashing to a stop. According to the pilot, the airplane acceleration was smooth until about reaching 90 knots after which he felt the wheels losing traction after the rear end of the plane slipped out hard to the right. He attributed the movement to high wind conditions or a slick patch of the runway. The airplane experienced significant damage but there were no fatalities. There were 6 serious injuries and 41 minor injuries. The airplane had a total of 110 passengers and 5 crewmembers (NTSB, 2010).

The pilot had accumulated 13 100 hours of flight experienced, with 6300 being in Boeing 737. Investigations carried out by the NTSB revealed that the captain was suitably competent and had no prior performance issues. The plane, manufactured in 1994 by Boeing, had accumulated 40,541 total flight hours. The plane had been inspected before the trip and all maintenance works carried out had been by FAA form 337 guidelines (NTSB, 2010). Considering both the pilot and the airplane was in prime condition during the flight, the NTSB determined that meteorological conditions played the largest role in this accident.

The NTSB used available information from the Flight Data Recorder (FDR), National Weather Service, and DEN wind sensors to estimate wind conditions at the time of the crash. At the time of the crash, the NTSB estimate revealed that the wind was from the west with a strength that varied between 35 and 40 knots. For that reason, runway 34R experienced a direct crosswind with a crosswind component that varied between 29 and 45 Knots.

At the time of the first skid marks, when the right rudder pedal initially shifted, the wind was at peak strength of 45 knots (NTSB, 2010). During takeoff, the DEN ATCT local controller had informed the pilots that wind strength was at 27 knots from 270⁰. However, 2 minutes before flight clearance, sensors at the runway departure point recorded winds at 29 to 39 knots from the west. At the time of clearance, airport winds (AW) displayed on the Ribbon Display Terminal would have shown 35 knots winds from the west. DEN official policy requires pilots to change runways when they encounter winds greater than 30 Knots. Since the pilot was acting on a lower figure, he undertook flight procedures that correlated to winds of 27 knots.

Analysis

The NTSB recognizes several weather-related issues that may affect aviation safety. These issues include wind, convective weather e.g. thunderstorms, in-flight icing, turbulence, ceiling and visibility, and ground de-icing. About this case, the wind was responsible as the plane did not gain sufficient altitude and the runway was dry.

The NTSB cites wind as the main contributing factor of weather-related accidents. During the years preceding this accident (2003-2007), wind conditions accounted for 1,149 accidents, more than half of all weather-related accidents (Federal Aviation Authority, 2008).

Drastic changes in wind direction and strength (wind shear) affect planes mostly during takeoff and landing. Wind shear makes it hard to control the airplane and maintain direction during takeoff and landing. The FAA has developed alert systems to recognize wind shear conditions around the airport. The DEN was equipped with the most advanced wind shear alert system at the time of the crash. Two minutes before the crash, the LLWAS sensors recorded wind speeds of 40 knots on the runway. This data was however not relayed to the pilots promptly and the pilots could not make the necessary adjustments.

Due to the position of the Denver International Airport (DEN), mountain wave conditions play a big role in preflight and flight decision making. According to the FAA, mountain wave conditions usually occur in high terrain where wind speeds increase as the terrain rises, with top wind speeds reaching 20 knots at the peak elevations (Federal Aviation Authority, 2008). The conditions above the mountain are usually stable, and wind directions flowing across the mountain ridge have little variation.

Due to the nature of airflow over the mountain, a harmonic oscillation occurs resulting in an atmospheric wave. This wave, composed of uplifts and down lifts, has a wide reach and can at times lead in turbulence. The FAA warns that mountain wave conditions pose problems during landing and take-offs such as the loss of directional control (NTSB, 2014).

NTSB notes that the captain could have taken control of the plane if he had applied the appropriate Right Rudder Pedal input as the plane was turning to the left (NTSB, 2010). While the gusty winds made it hard to maintain directional control, the pilot could undertake corrective measures within an appropriate timeline to prevent the plane from leaving the runway.

The crash of Continental Flight 1404 occurred due to a combination of factors. First, the wind information provided at the time of takeoff clearance differed from that experienced during takeoff acceleration. Secondly, the captain did not receive the most adverse wind information, and as such could not delay takeoff. Third, Denver Airport had not instituted crosswind components in the runway selection process. Fourth, the airport’s simulation training did not take into account gusting crosswinds and ground-level disturbances. The pilot was thus unequipped to handle the conditions at the time of the crash.

Recommendations

This paper has looked at the conditions surrounding the crash of Continental Airlines Flight 1404 on 20 December 2008. From the causes identified and the research on the subject, the paper recommends the following.

• Improve the training of air traffic controllers to ensure they can read and analyze various types of weather-related data.
• Development of technology that will allow pilots to access critical weather information such as mountain wave activity as they change.
• The NTSB should research ways to enhance the communication of hazardous weather information across the country. According to the NTSB, a method that allows wind conditions to be measured remotely using laser technology is under development.
• Airports should work together to analyze flight data to better understand the impact of winds on runway excursion and to develop strategies that mitigate all related wind-related problems.
• The NTSB in conjunction with airline operators should collect meteorological data at airports across the country and use this data to develop a more realistic simulation system that incorporates real-time gusty crosswind profiles.

Conclusion

“The wind blows where it wills, and you hear the sound of it, but you do not know whence it comes or whither it goes” (John 3:8 New International Version)

Over thousands of years, man has been able to fashion devices that make life easier. However, nature has always posed a challenge for man’s bid to conquer all that surrounds him. During the past century, air travel has become a very important part of life as well as a means for economic growth. According to NTSB, weather-related issues are responsible for more fatal general aviation accidents that all the other potential causes.

In the US, weather-related accidents result in over 25% of all fatalities in general aviation accidents. To mitigate these fatalities, it is important to institute mechanisms that allow better retrieval of weather information and the expedient dissemination of this information. Continental Airlines Flight 1404 suffered an accident during takeoff procedures. The investigation that followed indicated that weather conditions played a major role in causing this accident. The investigations also indicated that the pilot was not well accustomed to maneuvering through extreme weather. It is therefore important for the aviation industry to develop better weather monitoring and communication system as well as create better simulation exercises for pilots.

References

Federal Aviation Authority (2008). Weather-related Aviation Accident Study. Web.

General Aviation Manufacturers Association (2015). 2014 General Aviation Statistical Databook & 2015 Industry Outlook. Web.

Kulesa, G. (2002). Weather and Aviation: How Does Weather Affect the Safety and Operations of Airports and Aviation, and How Does FAA Work to Manage Weather-related Effects? Web.

National Transportation Safety Board (2010). Runway Side Excursion During Attempted Takeoff in Strong and Gusty Crosswind Conditions Continental Airlines Flight 1404 Boeing 737‐500, N18611 Denver, Colorado December 20, 2008. (NTSB/AAR-10/04 Report No. PB2010-910404). Washington D.C.: National Transport Safety Board.

National Transportation Safety Board (2014). NTSB Most Wanted List. Web.

National Transportation Safety Board (2016). Aviation Accident Reports. Web.

Summary

Airlines have a systematic and standard approach to procuring airplanes, fuel, repair and maintenance services and other important aspects required in running their businesses. The use of a suggested method of outsourcing is meant to make the airline cost-effective in procurement of jet fuels. In addition, it ensures that these companies get high value from the process and create healthy competition among the suppliers.

In this approach, performance risk is shifted from the airline when purchasing jet fuel from a selected supplier. Delays in delivering jet fuel will be reduced when performance standards are introduced and applied. This paper examines how airlines can maximize the usefulness of practical guidelines that can be used to implement a performance-based contracting approach in their procurement process and the value the aviation industry will acquire in implementing this model.

Introduction

The main supplier businesses that are related to the Aviation sector specialize in such activities as maintenance, repair and operating of airplanes, and they usually have a functional department that carries out its purchasing or outsourcing services. In many of these businesses, procurement processes determine the level of efficiency of the business (Walker & Brammer 2012). Businesses must thus manage their procurement strategies well whether they are outsourced or they have them as a purpose of their procurement department.

The global aviation industry has for a long time focused on economic objectives like cost containment, quality improvement and efficiency in growth, predominantly in its purchasing. The current economic climate has left organizations with pressure to draw more value from their service, including those in the aviation industry (Klatt 2015). They have to be innovative in order to keep up with the pace of the increasing competition from other airlines by being more effective. This report looks at the best practical guidelines that can be used to implement a performance-based contracting approach in an airline in the aviation industry.

The procurement process in any business begins when a need is identified, and it ends when it is serviced at the right time with the right cycle. In the aviation industry this could mean identifying a spare part, its model and number to acquire, the quantity of the spare part to acquire, identifying the quality standard of the spare part, identifying appropriate supplier, the lowest cost and the duration required to deliver. The procurement process is not completed until the spare part ends up in the storage room of the aviation business in the right specification and the payment is made.

Performance-based contracting

Performance based contracting (PBC) is a new service model which shapes how companies view acquisition, operation and maintenance of capital equipment. It focuses on the outcome of the system reliability performance as compared to materials and labor involved in the maintenance. Thus, this model emphasizes on the aspects of acquisition to primarily be centered on the purpose of the work to be done, and the method or the manner in which it is done is immaterial (Walker & Brammer 2012).

Contractors are given the freedom to choose how quality levels are achieved in delivering goods or services that they have a contract to deliver. This service model focuses on the results of a contractor that will tie his payment, contact extensions or contract renewal. Contractors receive payments for goods and services that satisfy the performance standards. The contracts attract both monetary and non-monetary incentives and disincentives. The object of this model is the outcome of the procurement process. In the aviation industry performance-based contracting is referred to as power-by-the hour.

Industries that have applied performance-based contracting cite the following benefits to be associated with it:

• Increased likelihood that the procurement needs will be met.
• There is more focus on the final results rather than the process used to reach the end.
• The incentives provided induce innovation by suppliers.
• The performance risk is greatly reduced.
• Better results and value are made.

Despite the advantages that are associated with performance-based contracting by both the suppliers and companies, it has often been criticized, because unlike the traditional contacting models where there are detailed technical and operational specifics of a task, this model focuses on the outcomes (Walker & Brammer 2012). The danger in this shift of the prescriptive approach may serve to limit processes instead of requiring prescription like in engineering and construction. Further, the transfer of risk to suppliers works against them and may resist taking the customer’s business risks beyond their control.

Requirements for a successful performance-based contractor

A successful negotiator of a performance-based contract should possess such attributes as the ability to make sound and objective decisions. The individual should perceive the implication of the decisions he or she makes to the business, pay attention to details, be influential in negotiating contracts persuading others to accept their proposals into agreement (Vespermann & Wald 2011).

Such people must also have good communication skills to effectively express their information to others, and they must also have courtesy and be able to develop relationships since they will relate with other people of varied backgrounds in the course of contract negotiations. They must also be good at planning and evaluating so that they can organize work, set priorities and monitor the progress of the work. They should also cope well with identifying problems and determining accuracy and relevance of information in solving problems.

Steps in performance-based contracting

In order to successfully negotiate a contract to buy jet fuel for an airline, the following steps and activities are followed and undertaken. All these activities occur within different phases of the procurement process, and the management as well as the suppliers must be involved.

Pre-award phase

There should be an established and integrated solutions team. A multi-disciplinary team consisting of members from management, procurement and other functional areas in an airline is constituted (Walker & Brammer 2012). This team will consist of engineers, accounting offices and procurement personnel all working together with an aim to buy jet fuel. For each team member a role and responsibility is allocated depending on the functional department that they represent. Rules of conduct are developed. This integrated solution team has the responsibility of finding solutions for the organization.

After the formation of an integrated solutions team is done, the next step is where the description of the problem happens (Vespermann & Wald 2011). The team describes clearly what type of fuel they need for their airplanes. They will consider the current situation with fuel, link the objectives of this new acquisition of fuel to the airline’s mission and objectives. They also state what constitutes success of the procurement process. The fulfillment of the need must have a direct relationship with the goals of the airline.

The next step is examining the private sector and public sector solutions. Once the results of the intended procurement of jet fuel have been documented, the integrated solutions team begins to look at the solutions that are available from potential suppliers in the public and private sector. They do this by conducting market research where they collect information on the available capabilities of the various solution providers (Klatt 2015). This is important because the airline must purchase the jet fuel/product that has the best value to solve the mission critical problem they are facing. The findings of the market research are then documented and used to write a statement of objectives.

A performance work statement (PWS) is then developed. With market findings well documented, the integrated solutions team begins to examine the requirements and develop performance standards work statement, performance requirements and quality assurance document by the competing suppliers (Vespermann & Wald 2011). In the process of coming up with this document there is an analysis of desired outcomes and what and when must be accomplished to satisfy the requirement. The following must be stated clearly in the PWS: desired outcomes, required service, performance standard, acceptable quality levels, the method to be used in monitoring and incentives to be given to the suppliers of the jet fuel for meeting standards.

It is decided how to measure and manage performance so that an airline company can have a standard of evaluating the qualities of an appropriate supplier (Walker & Brammer 2012). Here the integrated solutions team establishes a full vision of what constitutes the success of acquisition of jet fuel. The main objective is to build a measurement that will be used in the analysis of performance. The management decides on the overall success metrics that will be used. The integrated solutions team also considers the determinants it will use when it wants to award a contract to a supplier such, for example, their performance in providing jet fuels to airlines and letters of recommendations.

Award phase

The right supplier must have the knowledge of performance-based contacting before they are awarded the contract. Due diligence is taken in selecting only those suppliers who can deliver the desired outcomes of the acquisition process. Risks must be assessed in awarding a contract to each of the contractors who had submitted their proposals. Issues of conflicts of interest must also be checked carefully. Finally, the supplier who turns out to be the most promising one is awarded the contract.

Post award phase

There is management of performance. Here, the integrated solutions team changes its role and assumes the role of reviewing the progress of procurement together with an additional member from the selected contractor. They regularly hold meetings that check the success metrics that had been set to determine the success of the supplier (Smith et al. 2013). They ask the questions as to whether the acquisition is achieving its cost, schedule and performance goals, if the contractor is meeting or exceeding performance goals and the arising issues that need to be solved. Also, this team determines the risks that have come and how they can be mitigated.

Attributes of a good supplier

When airlines are considering selecting the supplier of jet fuel, they must evaluate the following attributes, and the supplier must meet a specified number of minimum requirements to win the tenders (Vespermann & Wald 2011). Using performance-based contracting, the integrated solutions team chooses the best from a field of suppliers competing for the same solution contract. The best is not necessarily the cheapest or the one with a very long history of supplying jet fuel.

The performance-based evaluation criteria explores the history of a supplier, including visiting their former clients and finding out their levels of satisfaction with the supplier’s performance. This may include making site visits to the supplier’s premises to determine their ability to deliver or consulting with other airlines to understand where they outsource jet fuel from (Walker & Brammer 2012). The integrated solutions team evaluates the given supplier’s understanding of performance contracting model and through discussions they explain the incentive structure and pricing approach to the suppliers. This aspect is important in determining the level of awareness and knowledge regarding the suitability of a supplier.

A successful supplier must be capable of demonstrating their ability to supply the required good, which in this case is the jet fuel, at the right time and in the required quantity. Usually, past performance may be required since it may be used as demonstration of the ability of a supplier to deliver in the future. Past performance information may be derived through collaboration with other airlines. The selected supplier must also be willing to take the risks that are shifted to them using this process.

Conclusion

It can be seen that there are great opportunities in streamlining procurement in the aviation industry. When airlines adopt this performance-based contracting model, they start to have better and manageable acquisitions that will create a win-win situation both for them and the suppliers. The minimum supplier requirements should always be observed when choosing the company that wins the tender to supply the required machines, parts, fuel and other accessories required by airline companies.

References

Klatt, F 2015, Performance-based Specifications in Public Procurement: Exploring the Case of Germany, University of Twente, Enschede.

Smith, M, Saunders, R, Stuckhardt, L & McGinnis, J.M 2013, Best Care at Lower Cost: The Path to Continuously Learning Health Care in America, National Academies Press, Washington (DC).

Vespermann, J & Wald, A 2011, ‘Much Ado about Nothing?–An analysis of economic impacts and ecologic effects of the EU-emission trading scheme in the aviation industry’, Transportation Research Part A: Policy and Practice, vol. 45, no. 10, pp.1066-1076.

Walker, H & Brammer, S 2012, ‘The relationship between sustainable procurement and e-procurement in the public sector’, International Journal of Production Economics, vol. 140, no. 1, pp.256-268.

Introduction

Aviation industry is one of the fastest growing economic sectors in the world. It connects the whole world and augments numerous businesses globally. The air transportation results in economic and social benefits both of which contribute to economic growth of countries.

Tourism and international trade sectors benefit enormously from the aviation industry. The rapid transportation of passengers and goods is another contribution of airlines worldwide. Finally, the aviation industry employs many people and contributes highly in terms of tax revenues (Dobbs 2009, p. 32). The industry has experienced tremendous growth in the recent years. There are a number of factors that have led to the high growth of this industry.

The increase of peoples’ earnings, improvements in life styles, and enhancement in people’s confidence in the use of aircrafts for movements have led to the witnessed rapid growth. The bilateral agreements among governments and the open sky agreements have also led to the increase in the use of commercial airlines. Competitions among airlines coupled with increased efficiency in airlines and airport operations have had the effect of fare reduction making air travel affordable.

Finally, globalization has opened the world and people want to experience life in different areas of the world. However, the management of airlines has been faced with various internal and external factors that affect the operations and the management. These factors have great pressure on the profits of the airlines (Wald 2011, p. 27).

This paper discusses the effects of these factors on the operation and the management of various airlines. It also explains the opportunities that exist in the aviation industry and risks that the businesses are likely to face. The paper is divided into four main sections namely introduction, internal factors, external factors, opportunities and risks, and finally conclusion.

Internal Factors

Factors affecting the operations and management of airline organizations are both internal and external. One of the internal factors affecting management is the existence of multiple levels of decision-making. The levels of decision making in many airlines are varied and interact at certain levels. The strategic, planning and operations departments are decision making levels that always interact and affect the operations of the airline.

The airlines strategic decisions usually take a lot of time before their implementation. They also do require a lot of capital investment and a lot of research work.

The strategic decisions are usually made to influence the direction of the company. Growth and expansion plan is an example of a strategic decision that an air line can make. Precisely, there are bountiful impacts of internal and external factors on the operation and management of an airline. Additionally, there are associated opportunities and risks to the business following its nature of operation.

Conversely, planning decisions are made to enhance optimal use of the airlines resources. Aviation industry has a lot of resource which include aircraft, flight attendants, human resources, and buildings among others. The management has to plan on how these resources are to be used optimally.

In the airline, planning decisions relate to issues such as forecasting of demand, flight scheduling, assignment of flight pilots/crews to different flights, aircraft maintenance, and planning for the accommodation of crews (Albers, Auerbach, Baum, & Delfmann 2005, p. 105).

Other decisions that require planning are the number of workers required to manage a flight such luggage handlers, customer care officers, and so on. The decisions are also on the amount to be charged as fare and the availability of seats. All these decisions are related and this makes the whole planning a very complicated process.

The operation decisions are those that are made daily and are reviewed regularly. Some examples of operation decisions may include responses to incidents such as adverse weather conditions, delays in flights, cancellation of flights, mechanical problems with an aircraft and non attendance of a staff due to issues like illness. The strategic decisions that have been made always affect the planning decisions that are to be made.

The planning decisions on the other hand influence the operation decisions that are made. The feedback also comes following the sequence. The operations stage provides the planning stage with feedback and the planning stage further provides the strategic stage with the feedback.

The other internal factor that affect operation and the management of airlines is the interaction of different groups of workers who must operate together to ensure success of flights.

The size of the airline normally dictates the number of flights that it can operate. If the airline is a large one, then it will operate hundreds of flights in a single day. A considerable number of workers of different departments and professions must interact together to ensure the success of each of these flights.

They have to cooperate with all having the single objective of ensuring that there is no delay in flight and that everything moves efficiently (Haberberg & Rieple 2008, p 186).

Some of the different groups of workers that interact are the cock pit crew, the cabin crew, the maintenance crew, the ramp crew, the baggage handlers, cargo agents, fuelling agents, the customer care crew, the catering agents, the air craft cleaning agents and the dispatchers. These workers are of different qualifications, workloads and pay grades but their contribution is vital in the process of preparing for the departure of flights.

The airline management has to make a proper and implementable work plan for workers so as to ensure efficiency (Wu 2009, p.159). The work plan must ensure that there are no conflicts between the different groups. Such can easily lead to delays and possibly accidents. These different groups interact at different levels. The pilots are the ones to fly the plane and there must be certain number of pilots to fly large planes.

The flight attendants ensure the security of the passengers onboard and also reassure them. The maintenance crew repair and maintain the aircraft and they do this regularly while the ramp agents on the other hand usually direct the aircraft and assist in parking it. The baggage handling crew usually load and off-load baggage while their fuelling counterparts assist in ensuring that the aircraft has enough fuel for the flight.

The customer service agents are responsible for assisting passengers before boarding with their queries, check-in, assignment of seats and any other issue. The gate agents usually ensure that any unauthorized person does not gain access to the aircraft. Meals and drinks to be taken in the aircraft are provided for by the catering agents.

The description above shows how these groups of people interact for the success of the flight and conflict between them has effects that can impact negatively on the airline. The management of the airline therefore has to ensure that each of these groups do their work smoothly to avoid any adverse incident.

The other internal factor that impacts on the management and operation of airlines is the training and skills of the airline staff. The management has to ensure that the staff is well trained and qualified to work for the air line and that the crew in the aircraft are qualified to operate the flight.

There are certain set of skills and knowledge that an expert in the aviation industry must have. The activities involved in the aviation business such as piloting is complex thus people with ability to make quick and accurate decisions are needed.

The management must ensure that the training of the staff be an on-going activity and should be incorporated in the culture of the company. The skills and training that the airline staff get is necessary to ensure security and effectiveness of the flight and thus make the operation and management of the airline easier.

External Factors

Competition is one of the external factors affecting the aviation industry. This incorporates the activities of other contenders (Wald 2011, p. 342). It is impossible for the management of the airline to work effectively without considering the actions of the other industry players.

The actions of competitors affect the actions of the management. Governments of various countries have regulations, which any airline organization must comply with in order to operate. The airline managements are also keen on the agreement terms that they make with the airports that serve them as these affect them.

The agreements affect the airline through various factors such as airport congestion. The preferences and the needs of the customers also affect the management and the operations of the airline. Issues such as competitive fares, quality of customer care, reliability and services provided on-board are of great impact on the airline.

The failure of the airline or other the management has negative impact on the airline. Finally, suppliers are important for the airline as they ensure continuation of the operations of the airlines activities. They thus affect the management of the airline since they provide crucial items such as gas, spare parts, meals and uniforms for the employees.

Policies are the other external factors that impact on the operations and management of airlines. Government policies usually have direct impact on the industry. Certain policies for example excise taxes on the tickets have the effect of increasing the prices for the consumers and hence lowering demand. A policy that seeks to protect the consumer by expecting the airlines not to take much time with the customers on the tarmac due to bad weather has the effect of increasing the rate of flight cancellation.

Interest rates are affected by monetary policies and these affect the airlines’ ability to acquire new aircrafts (Uwagwuna 2011, p.10). These policies affect the management and it therefore must act to avoid or limit the adverse effects that are associated with these legislations. Fuel policies also greatly affect the operations of airlines. Policies that affect the supply and the price of fuel have an influence on the profitability of the airline. Such policies may include oil suppliers’ decisions, expansions of refinery by an oil company and so on.

Finally, the other external factors that affect the management of airlines are the social, political, and economic occurrences. Economic and social developments are usually rapid and have great impact on the aviation industry. Political events such as terrorist actions, wars and coups always have negative effects on the airlines.

The management of the airlines must always be ready to take necessary actions whenever such events occur to help reduce their impacts on the airline. Airlines usually respond in various ways to survive such events and stay in business. Some of the ways that the management uses to survive such situations are among others the laying off of some staff, reduction of fares, cutting of employee salaries and reduction of the number of flights that it operates.

Opportunities and Risks

The existence of these internal and external factors brings a lot of challenges to the management of an airline. The industry itself usually faces a lot of challenges such as slow down in economies and this greatly affects the operations of airlines. However, they do present the management with opportunities for further development that enable the airline to continue staying in business.

The environment in which airlines operate is competitive, risky, unstable and dynamic. Issues such as fuel price changes, wars, customer service and the skills of the airline staff have impact on the ability of the airlines survival. They however bring the need for the management to put in place a proper corporate sustainability model so that it may stay in business.

Aviation industry has risks associated with operations, finance, human capital, technology, and social. Management has to effectively handle these risks. The industry has to adopt a corporate sustainability system that focuses on optimal use of resources, saving costs, improving capacities, and that enables fast response to changes (Triant & Ayse, 2011, p.111). The portfolio of the model should include plans on how to manage network, crew and the handling of codes.

Additionally, it should include how pricing is to be done, how the prices can be distributed and how the revenue is to be managed. The portfolio has to be guided by the research that the management has done. This is a vital consideration in the context of research and its ultimate impacts on the aviation industry.

The management must have the capability to know the risks that the internal and external factors bring. It must control and manage the risks successfully to enable sustainability. Concurrently, management has to improve on security, convenience, customer satisfaction, and also offer competitive prices. It can do this through an effective and well-structured corporate sustainability management model (Upham 2003, p. 28).

The workers in the airline too must understand the need for risk management and its benefits. The model that enables airlines to operate sustainably must have a cross department risk management method that monitor issues such as fuel price changes, exchange and interest rates changes and demand trends. The model also assists in elimination of issues such as conflicts between various groups of workers.

The challenge of competition is a threat to an airline but it offers an opportunity for the management to design a proper way of presenting itself to the market. The management has to take into consideration the market when designing a method of tackling competition, customer satisfaction and new territories. The factors that must be taken in to consideration include transport, communication, logistics, advertising and information among others.

In presenting itself to the market, the airline must recognize its target customers (Shaw 2011, p. 172). In this way, the management will be able to know the customers’ requirements and thus will satisfy customers and make the airline succeed in competition. The recognition of the target market also enables the airline to know how to structure its marketing and advertisements. The recognition of the customers is what has enabled the France-KLM, the largest company in the airline industry.

Technological advancements that have taken place in the recent years also have the capacity to assist the management of airline organizations deal with internal and external issues that affect the airline company. Computer technology/IT can assist in crew and flight scheduling and in general planning for different activities in the operations of the airline and this helps the airline save on time. The improvement in technology that is used in building of aircrafts currently enables airlines to save on fuel costs.

This is so because the current technology in use enables the creation of fuel efficient aircrafts. A good percentage of the ground services are also automated due to technological advancements and this further helps in cost savings. The current technology used in the airline industry also enables airlines increase their revenues. The availability of services such as in-flight access to internet and entertainment among others leads the customers to pay more hence increased revenue for the airline.

The other internal factor that impacts on the management and operation of airlines is the training and skills of the airline staff. This gives the management opportunity to determine the training requirement for the staff of the airline. It is the management of the airline that can effectively determine the set of skills that are needed for efficient operation of the airline (Fojt 2006, p.27). The management must ensure that the training of the staff be an on-going activity and should be incorporated in the culture of the company.

Airlines face various threats and these can greatly impact on the operations, efficiency and profitability of the airline. Cyber crime or attack is one of the threats that airlines face and this greatly affect the security of the airline and the passengers and the baggage.

The security level of airlines and airports have been greatly increased since September 2011 but the threats of cyber attack still exist and are likely to occur if the management does not put in place proper monitoring. This is a critical provision in various contexts. It is crucial to comprehend various operational aspects in the airline industry.

The other threat that is extremely risky for the airlines is the increase in oil prices. The failure of the management to take into consideration price changes in oil when forecasting their profits of the year can be disastrous to the airline. Such changes in the oil prices can be due to policies of oil marketers or the government. The increase in the oil prices may lead to increase in fare which further affects the demand.

The failure of the management to properly make a work plan for the workers is the other risk that may face an airline. The workers of an airline perform different activities and they interact in their duties. However, their duties should never conflict as such can lead to flight delays and cancellations. The delays in flight can greatly affect the way customers view the airline and this will influence the efficiency and performance of the airline.

Conclusion

The airline industry is one of the fastest growing industries worldwide and it contributes immensely to economic growth of various countries. However, the management of airlines has been faced with various internal and external factors that usually affect the operations of the airlines. The internal factors include existence of multiple decisions making levels, the interaction of different groups of workers and the skills and training of the workers.

On the other hand, external factors affecting the management of the airlines include competition, political provisions, economic factors, and policies enacted by governments and fuel suppliers. This is a critical provision when considered in both economic and operational contexts.

The existence of these factors gives the aviation industry numerous opportunities to improve its operations. Airlines may use corporate strategic models and the improvement in technology to tackle issues such as scheduling of workers in a way that there are no conflicts.

The actions such as competition also challenge the management to design proper advertising and marketing plans. Finally, the paper recognized the risks that may occur due to the airlines should the management fail to tackle the internal and external issues that face them. Some of the threats that may occur due to poor handling of the internal and external issues include cyber attack, loss of revenue, and loss of consumer confidence in the airline.

List of References

Albers, S., Auerbach, S., Baum, H & Delfmann, W 2005, Strategic management in the aviation industry, Ashgate, London, UK.

Dobbs, D 2009, Aviation Industry Performance A Review of the Aviation Industry in 2008. Diane Pub Co, Darby, PA.

Fojt, M 2006, The airline industry, Emerald Group Pub, Bradford, UK.

Haberberg, A & Rieple, A 2008, Strategic management: theory and application, Oxford University Press, Oxford, UK.

Shaw, S 2011, Airline marketing and management, Ashgate, Aldershot, UK.

Triant G & Ayse, Y 2011, Risk Management and Corporate Sustainability in Aviation, Ashgate Publishing Group, Aldershot, UK.

Upham, P 2003, Towards sustainable aviation, Earthscan Publ., London, UK.

Uwagwuna, C 2011, How the Macroeconomic Environment of the Airline Industry Affects the Strategic Decision of Boing Vs Airbus A Case Study, GRIN Verlag GmbH, München.

Wald, A 2011, Introduction to aviation management, LIT, Berlin.

Wu, C 2009, Airline operations and delay management: insights from airline economics, networks, and strategic schedule planning, Ashgate, Farnham, Surrey.

Introduction and Summary

This paper is a critical analysis of the article, “Airline Industry at Its Safest since the Dawn of the Jet Age” by Jad Mouawad and Christopher Drew. In the article, Mouawad and Drew (2013) examine the safety concept in the airline industry. The authors state that over the past few decades the U.S aviation industry has embraced advanced technology in its operations, and this has improved safety in air travel. For example, the authors state that a traveler can now fly 123,000 years before getting involved in a fatal crash (Mouawad & Drew, 2013). According to the article, this is due to the availability of reliable engines, planes, and the availability of advanced technology.

The article also reports that statistics collected by an MIT professor have established that the development of warning technology has resulted in a sharp decline in the number of accidents in the airline industry (Mouawad & Drew, 2013). For example, the use of advanced warning technology in the aviation industry has led to a reduction in the number of midair collisions caused by poor visibility. When an airplane crashes, the airline industry is affected greatly and the economy as well. For example, Mouawad and Drew (2013) have stated that the Colgan Air Flight 3407 crash remains memorable because other than affecting the economy through flight cancellations, delays, and lawsuits, the crash was also a wakeup call for the airline industry to strengthen its current rules in a bid to improve safety in the industry. In 2009, the Air France jet crashed killing people and losing the data flight recorder. For this reason, the airliner spent millions of dollars locating the lost flight data recorder. As a result, the airline incurred an economic cost in the form of money and time. However, the use of modern technology has made it easier to come up with better approaches to detect accidents advance especially under tricky wind conditions.

Today, most airlines have installed advanced navigation technology on their airplanes, and this enables pilots to easily detect severe wind shear (Mouawad & Drew, 2013). The design of passengers’ seats has also been improved thereby increasing passenger survival in case of a plane crash. This is unlike the case a few decades ago. Therefore, in the context of “Flying the Friendly Skies” advances in technology, coupled with collaboration between major stakeholders in the aviation industry have enhanced safety.

Analysis

In both the news story article and the public news version, the audiences who include major stakeholders in the airline industry are well informed. For example, the article explores how safety in the airline industry has improved over the past three to four decades. Advances in technology, coupled with the use of modern systems have made airplanes more reliable and safe to use (Mouawad & Drew, 2013). Moreover, collaboration with stakeholders in the airline industry has resulted in a reduced number of accidents. In return, airlines have managed to reduce their operational costs while their safety levels have improved.

On the other hand, Miller, Benjamin, and North (2011) have explored the economics of safety based on the principle of marginal costs. The authors note that “as the degree of safety rises, the total benefits of safety rise, but the marginal (or incremental) benefits of additional safety decline” (Miller et al. 2011, p. 24). What this statement means is that even though improved safety in the airline industry is a positive achievement, such as the decline in the number of accidents, on the other hand, this comes at a cost because the airline has to invest heavily in order to improve safety levels.

The discussion by Miller et al. (2011) is more objective and complete compared with the news article as the article only delves on a single aspect of promoting safety. On the other hand, the discussion by Miller et al. (2011) explores the various aspects related to safety from an economic perspective. For example, the discussion explores issues of technological changes, improved rules in the airline industry, collaboration with different stakeholders, and the effects of these issues on the airline industry. The article mainly revolves around the issue of technological changes and the effect this has on safety in the airline industry.

The public news version discussion is, therefore, more objective although the newspaper article is also purposeful. Both discussions highlight how technological changes have reduced operational costs of airlines incurred through plane crashes and other accidents. In other words, the two articles have addressed the issues of safety in the airline industry in a logical and specific manner. In addition, the articles have also examined the effectiveness of such changes. The two discussions also address the role of key stakeholders in the airline industry in improving safety standards.

I agree with both the article and the textbook discussion on the issue of safety. They both underscore the fact that with advances in technology, the number of accidents in the airline industry decline. This is based on the economic fact that when safety levels increase, there is a subsequent increase in total safety benefits. Both the article and the original source are in agreement that technology has promoted safety in the airline industry.

Technological changes diminish the costs associated with accidents. The two articles also agree that airplanes are equipped with complex systems that are bound to fail and cause accidents, and this in turn increases the marginal cost. However, the combinations of technology, effective training, and effective structures and regulations have reduced the cost associated with airline accidents (Miller et al., 2011). The two discussions also agree on the fact that after a fatal crash, the ratings of an airline decline. As such, the airline suffers considerably financial problems in the form of lawsuits.

Reference List

Miller, R. L., Benjamin, D. K., & North, D.C. (2011). The economics of public issues. New York, NY: Pearson Education.

Mouawad, J., & Drew, C. (2013). Airline industry at its safest since the dawn of the jet age. Web.

Over recent decades, the demographics of air travel have changed dramatically. It became accessible to much larger numbers of people, expanding geographically and becoming more affordable. As a result, passenger numbers grew dramatically, a trend that is likely still ongoing, and their demographics changed substantially. These developments necessitated changes in the highly competitive airline environment, which depends on recognizing and serving customer needs. The emergences of low-cost carriers and global airline alliances are among the phenomena that can be linked to changing customer demands. This essay aims to show that the increasing demand for convenient, inexpensive travel has led most airlines to either cut costs dramatically to provide affordable flight options or move to less competitive environments. To prove this point, it will review the recent changes in the characteristics and behaviours of airline passengers and the measures that airlines have taken in response.

Passenger Changes

Passenger Influence

A passenger airline typically relies on its customers as its principal, and likely only significant, source of revenue. Hence, it is essential to its success that it recognises the needs of its passenger base and serves them accordingly. If it fails to do so, a competitor will likely become a more compelling option to the underserved customers, leading to substantial revenue reductions and negative consequences up to and including insolvency. As Taneja (2017) confirms, most airlines are aware of this danger and collect extensive data on their passengers, which they use to formulate their branding and marketing strategies. However, if they recognise a substantial shift in the customers’ needs and preferences, they may engage in larger structural changes to retain passenger loyalty. Alternatively, new companies can emerge that aim to serve these new customer segments and formulate their entire structure around this proposition.

Air Travel Demand

The first significant change in passenger statistics that has taken place recently is the growth in demand for air travel. As Graham and Dobruszkes (2019) highlight, Airbus predicts 4.4% annual passenger-kilometre growth until 2036, while the United Nations projects an annual 3.3% increase in traveller numbers through 2030. However, Graham and Dobruszkes (2017) identify a potential limit to this growth, with people of low socioeconomic status or with personal circumstances unlikely to become frequent flyers regardless of industry changes. Development has been taking place for a considerable time in the past, as well, leading airline companies to consider ways to satisfy this rising interest. They have expanded their routes and introduced new ones, with the locations where unsatisfied demand was the highest taking a priority. These differences in demographic distribution warrant consideration, as they have changed the primary regions on which airlines focus.

Regional Developments

Due to the high costs of air travel in the past, airlines were most successful in wealthy developed nations, where there would be many people who could afford the services. Goetz and Budd (2016) identify the North American and European markets as critical to the early development of the aviation industry. However, with the recent reductions in air travel costs, it has become accessible to more people. Therefore, more regions became potentially attractive for airlines, leading to growth in new locations. Raghavan et al. (2018) cite Airbus and Boeing’s forecasts, which expect Asian demand for new aircraft between 2016 and 2035 to be between $2271 billion and $2500 billion, more than North America and Europe combined. Regions such as Africa do not demonstrate the same tendency, however, likely due to their low spending power at this time.

Demographics

Initially, only wealthy people could afford air travel due to its limited availability and prohibitive price. However, as it became accessible to increasing numbers of people, their overall characteristics have changed substantially. Doganis (2019) claims that, as international trade developed, younger junior staff and skilled workers have begun travelling more, while senior executive and high-paid professional traffic has remained stable. Additionally, Doganis (2019) finds gender disparities in travel, with women contributing to 25% of business air travel in Europe and 45% in the United States, though men and women are equally represented on leisure flights. Overall, the average passenger appears to be becoming younger, less wealthy, and more likely to be female.

Travelling Behaviours

Air travel can be separated into two distinct types based on their length, which are typically known as long- and short-haul flights. Long-haul travel typically takes a substantial amount of time and preparation to obtain the necessary permissions and settle affairs before departing (Camilleri, 2017). Hence, the passengers will typically purchase their tickets ahead of time, and the demand can be managed without substantial effort. However, the short-haul market presents a different situation, which has to be taken into consideration. Shaw (2016) claims that short flights are often spontaneous and require a return trip the same day, which puts pressure on airlines to provide frequent flights, especially in the morning and evening. The increasing proportion of short-haul routes pressures carriers to adapt to the new model if they intend to satisfy this category of traveller.

Qualities Expected and Loyalty

When choosing a flight to take, travellers are likely to consider two principal items: service quality and price. The former is particularly relevant in long-haul flights, where the passenger will likely have to spend an extended period without moving from their seat. However, Budd and Ison (2017) state that less than a quarter of passengers considers business-class arrangements, which offer increased comfort at a higher price, good value for the cost. At the same time, over half of all air travellers are either price-conscious or value-seeking. Loyalty is also not a relevant concern for most passengers, as Sierpiński (2016) states. They will choose the most attractive offer without considering their relationship with the brand that provides it.

Airline Effects and Adaptations

Costs and Profitability

As a result of competition for the influx of new passengers, airlines have had to lower their prices to attract customers. Scotti and Volta (2017) analyse 53 airlines and discover that the increases in variable costs and decreases in prices have been associated with small and inconsistent changes in profitability, which tend to be negative but range between -6% and 5%. At the same time, carriers have become much more productive and efficient, indicating that this change was the result of a widespread effort to cut unnecessary costs to stay profitable while presenting attractive offers. Low-cost carriers, which focus their entire business model on trying to find and use cost-cutting opportunities (Gross & Lück, 2016), have likely also contributed to this change. They can be considered some of the most significant outcomes of the evolution of passenger needs and warrant a separate discussion.

Business Model Evolution

Two significant developments can be identified as the result of increasingly fierce competition between airlines: low-cost carriers and airline alliances. The former are founded on principles such as point-to-point travel as opposed to the hub-and-spoke system as well as a comprehensive cost-saving system. As Forsyth (2018) finds, despite heavy resistance from incumbent airlines, carriers such as Southwest were able to prosper and expand their market share dramatically, lowering prices and increasing traffic as a result. With that said, low-cost carriers are typically limited by their model, which is suited to short-haul travel more than long-haul. Global airline alliances formed to take advantage of deregulation and secure the international travel market through superior services such as seamless travel and cost-cutting via shared facilities, coming to control 73% of the traffic at world’s ten busiest airports in 2016 (Fleming et al., 2018). Overall, the short-haul market is currently dominated by LCCs, while alliances hold a massively powerful position in international travel.

Fleet Strategy

To satisfy the growing demand for air travel, carriers have had to purchase additional aircraft, as their capacity at the time was inadequate. This purchasing practice had the side effect of phasing out older, smaller, less efficient aeroplanes in favour of larger new models (Vasigh & Gorjidooz, 2016). Low-cost carriers such as Southwest also chose to maintain fleets of a single aircraft model because it would enable their pilots and technicians to be able to work with each vehicle competently and efficiently. However, this tendency has recently been changing because, as Clark (2016) points out, airlines prefer to continue benefiting from the competition between Boeing and Airbus. Regardless, the overall approach stands, with low-cost carriers operating highly uniform fleets that consist of a small number of different models.

Markets Served

There have been both a local and a global response to the increased attractiveness of various aviation markets worldwide. Numerous new carriers have emerged throughout Asia in the 21st century in both legacy and LCC variations, and their formations have coincided with growth in air travel to different local destinations of between 7% and 46% over five years (Duval, 2016). Global airlines have also become interested in this growth, forming alliances and using code-share flights to enable themselves to reach destinations in otherwise inaccessible markets without excessive investment (Lawton, 2017). With that said, Seredyński et al. (2017) note that 25% of potential alliance connections remain unused, particularly in emerging regions such as Asia. As such, it would appear that local airlines are responsible for satisfying most of the growing demand in these markets.

Services Offered

Previously, the prohibitively high costs of air travel necessitated excellent service to justify it, and many legacy carriers specialised in it. However, the emergence of low-cost airlines and intensification of competition have led to cost-cutting efforts that have in part affected in-flight service. Koklic et al. (2017) state that, while quality expectations for LCCs are lower than those for full-service airlines, the differentiation between the two is decreasing. Nevertheless, customer satisfaction and factors such as intent to repurchase depend on factors such as personnel quality more than tangibles. With that said, airline alliances have found alternate ways of providing superior service that would be unavailable to individual airlines, such as airport lounges (Bruce et al., 2017). Overall, amenities appear to have become secondary to the price in most cases, with only premium and low-cost options surviving.

Advertising and Marketing

Due to the low overall differentiation between airlines’ services and the focus of competition on price, their marketing and advertising are also focused on it. Customers expect the best value, which mostly consists of the price combined with the service quality. However, it is challenging for them to evaluate the service quality of an airline unless they have flown with it before. Hence, marketing will typically focus on spreading brand awareness and attempting to associate it with low prices. Jeng and Lo (2019) highlight lowest price guarantees as a significant predictor of customer purchasing intention, especially when they are combined with strict refund conditions that improve the believability of the offer. Customers will often be satisfied with a low price, and airlines are focusing on ensuring that their flights are seen as superior to the competition in that regard.

Conclusion

With the increases in passenger traffic following events such as deregulation and the development of new aircraft models, both passenger traits and airline strategies have changed substantially. Passengers have become younger, less wealthy and more price-conscious, spontaneous and spread throughout the world. They have started demanding frequent, inexpensive flights and have the influence necessary to make carriers try to satisfy their needs. In response, aggressive competition has taken place in aviation, which has led to the emergence of LCCs in local markets throughout the world and the consolidation of long-haul carriers into alliances with global coverage. Prices are now essential determinants of airline offers, and they recognise this fact and integrate it into their marketing and cost-cutting initiatives, sometimes at the expense of service. Overall, aviation has become more democratic and available to everyone regardless of their economic status or location, though the process that has led to this result is still ongoing.

References

Bruce, P. J., Gao, Y., & King, J. M. C. (Eds.). (2017). Airline operations: A practical guide. Taylor & Francis.

Budd, L., & Ison, S. (Eds.). (2017). Low cost carriers: Emergence, expansion and evolution. Taylor & Francis.

Camilleri, M. A. (2017). Travel marketing, tourism economics and the airline product: An introduction to theory and practice. Springer International Publishing.

Clark, P. (2016). Buying the big jets: Fleet planning for airlines (2^nd ed.). Taylor & Francis.

Doganis, R. (2019). Flying off course: Airline economics and marketing (5^th ed.). Taylor & Francis.

Duval, D. T. (Ed.). (2016). Air transport in the Asia Pacific. Taylor & Francis.

Fleming, K., Vasigh, B., & Tacker, T. (2018). Introduction to air transport economics: From theory to applications. Taylor & Francis.

Forsyth, P. (2018). Competition versus predation in aviation markets: A survey of experience in North America, Europe and Australia. Taylor & Francis.

Goetz, A. R., & Budd, L. (Eds.). (2016). The geographies of air transport. Taylor & Francis.

Graham, A., & Dobruszkes, F. (Eds.). (2019). Air transport – a tourism perspective. Elsevier Science.

Graham, A., & Metz, D. (2017). Limits to air travel growth: The case of infrequent flyers.Journal of Air Transport Management, 62, 109-120. Web.

Gross, M., & Lück, M. (Eds.). (2016). The low cost carrier worldwide. Taylor & Francis.

Jeng, S. P., & Lo, M. F. (2019). Lowest price guarantees on airline websites: Perceived believability, perceived value, and purchase intentions.Journal of Air Transport Management, 75, 85-91. Web.

Koklic, M. K., Kukar-Kinney, M., & Vegelj, S. (2017). An investigation of customer satisfaction with low-cost and full-service airline companies.Journal of Business Research, 80, 188-196. Web.

Lawton, T. C. (Ed.). (2017). Strategic management in aviation. Taylor & Francis.

Raghavan, S., D’Agostino, D. J., & Guzhva, V. S. (2018). Aircraft leasing and financing: Tools for success in international aircraft acquisition and management. Elsevier Science.

Scotti, D., & Volta, N. (2017). Profitability change in the global airline industry.Transportation Research Part E: Logistics and Transportation Review, 102, 1-12. Web.

Seredyński, A., Steitz, W., & Rothlauf, F. (2017). Code-share connectivity within global airline alliances – How much potential is utilised?Journal of Air Transport Management, 65, 43-53. Web.

Shaw, S. (2016). Airline marketing and management (7^th ed.). Taylor & Francis.

Sierpiński, G. (Ed.). (2016). Intelligent transport systems and travel behaviour. Springer International Publishing.

Taneja, N. K. (2017). Driving airline business strategies through emerging technology. Taylor & Francis.

Vasigh, B., & Gorjidooz, J. (2016). Engineering economics for aviation and aerospace. Taylor & Francis.

Williams, G. (2017). Airline competition: Deregulation’s mixed legacy. Taylor & Francis.

Although Classic Airlines is one of the market leaders in the provision of airline services to more than 240 destinations, there are myriads of marketing and management challenges that the company is still grappling with in its daily operations.

In other words, the company ought to carry out a forensic audit of its current operations so that it can be in a position to positively transform its profitability alongside meeting the needs and demands of clients.

To begin with, the management at Classic Airlines should strive in developing a viable brand loyalty so that they can attract additional clients who are not current customers. According to Kotler and Keller (2006), brand loyalty entails the tastes and preferences of clients on specific products that are being offered by an organization.

It is quite cumbersome for the products and services of a company to obtain a niche in the market without a well recognized brand. Therefore, it is necessary for the management at Classic Airlines to increase the level of loyalty for the services that they are presently being offered to clients.

In addition, the shareholders should be part and parcel of the brand loyalty program. Both the external and internal stakeholders should be involved in building the brand image and loyalty of the airline’s services.

It is also prudent to note that Classic Airlines is still struggling with the threat of being bankrupt. It appears that the cost of overheads is not commensurate with revenue generation at the company. It is therefore the responsibility of the airline’s marketing department to devise rigorous marketing strategies that will lead into improved generation of revenue.

The marketing campaign to be adopted by the airline should largely focus on boosting the image of the company in addition to offering wide array of products and services that will meet the diverse needs of both the active and passive clients.

The airline has been embracing unique concepts of marketing so that it can improve its level of profitability. The concepts have not been very productive largely due to the stiff competition from other market rivals. Therefore, it is necessary for the management at Classic Airlines to initiate new marketing strategies by re-examining the internal and external marketing environments.

One of the most common and viable models that Classic Airlines can use to assess the nature of its current market is the Porter’s Fives Forces. When this model is aptly applied, the corporate strategy can be used to evaluate whether the corporate structure in place is effective.

As it stands now, the profitability of this organization has been destabilized by the market competition in spite of the fact that the company is facing myriads of barriers to market entry compared to other market rivals.

Although the airline has been in operation for over 25 years, the trends show that its profitability has been going down for sometimes now (University of Phoenix, 2011). One of the factors that has significantly contributed in the declining profitability is the high cost of air tickets. This has compelled customers to take minimal number of flights in order to cut down costs.

As such, the airline uses a reward program to attract customers. This is one of the company’s marketing concepts. Determining and meeting the needs of customers is also another marketing ideal used by the airline in order to improve profitability. The ability to offer the most appropriate services to customers is also a vital ingredient for profitability in this airline company (University of Phoenix, 2011).

Conclusion

To recap it all, the paper has discussed various marketing strategies that Classic Airlines can adopt in order to revive itself back to profitability. For instance, there is need to restore the image of the company.

Therefore, the airline should conduct thorough research on how brand loyalty can be boosted. Moreover, customers’ tastes and preferences can be met by taking care of controllable elements such as pricing and the nature of services offered. The current reward program is also highly recommended.

References

Kotler, P. & Keller, K.L. (2006). Marketing Management (12^th ed.). New York: Pearson Hall.

University of Phoenix (2011). Scenario: Classic Airlines. Retrieved from University of Phoenix.

Introduction

Overview of the Company

Singapore Airline (SIA) is a widely recognized and celebrated brand name in the air transport industry for over 50 years. This is attributable to its route network that covers over 90 cities in more than forty countries and up to date air transport system.

In addition, SIA is a member of the Star Alliance which has increased its global presence to roughly 140 countries. All in all, the company’s strong brand name is mainly attributed to its excellent customer service (Singaporeair.com, 2013).

For nearly four decades since SIA was detached from Malaysian Airway Limited it has continued to grow rapidly to become a world class airline. Experts attribute this to the company’s values and culture. Singapore Airline has impressed many people due to its creativity, diversity and constant growth.

In addition, the company has been able to meet customers demand as well as gaining competitive advantage in both local and international market (Singaporeair.com, 2013; Ayob, 2004, P. 2).

However, the journey has never been smooth throughout. The company has experienced numerous challenges both internal and external. The most notable predicament was the Asian economic crisis created by the outbreak of the SARS virus in 2003.

The crisis forced the company to cut down wages and lay-off nearly 500 workers. As a matter of fact, this was considered as the largest number of employees to be ever laid-off in the company’s history. As a result, the relationship between the top management and the labor union started to worsen (UK Essays.com, 2012).

So as to attain a world class status SIA went through the following chronology: SIA was established in 1947 under the name Malayan Airways; in 1963, SIA was rebranded to Malaysian Airways owing to the formation of the Malaysian Federation.

The name was later changed to Malaysian-Singapore Airline when Singapore became independent; in 1972, the company acquired the current name when it splits up from Malaysian Airways. In 1986, the girl wearing sarong kebaya (the company’s famous logo) was born.

The young elegant, friendly and kindhearted girl on the SIA’s famous logo represents the culture that the company forever wants to devote to its customers (Singaporeair.com, 2013).

From 1990 to 2001, the company purchased 178 aircrafts and expanded its route networks extensively. In 2004, Singapore Airline broke a world record by launching the longest ever commercial flight from Singapore to Los Angeles and New York. In 2007, SIA broke another world record by purchasing the largest passenger plane-A380.

At the moment, SIA’s route networks spans more than 90 destinations and nearly forty countries. In addition, the company has the most modern fleet in the industry and dominates the South East Asian market (UK Essays.com, 2012).

SWOT Analysis of the SIA

SWOT analysis is an instrument that is often used to assess an organization and the environment. SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is commonly used in business studies to explore the existing conditions in order to come up with possible solutions or strategies of addressing both internal and external challenges (OCBC Investment Research, 2011, p. 11).

In this case, SWOT analysis will focus on Singapore Airline. The main objective of the analysis is to have firsthand experience of the problems facing the company and gain knowledge concerning probable developments and potentials.

Strength and Weakness

The main foundation of any company is their staff (Kotler, 2001, p. 6). SAI boasts of highly trained and disciplined personnel whose main focus is passengers comfort and satisfaction. Service quality and customer satisfaction have always been the core of SAI as enshrined in its vision and mission statement. The company has managed to achieve all these because of its highly competent staff, which includes the pilots and mechanics.

This has benefited both the company and the customers. For instance, SIA’s service quality has attracted other users like institutions, tourism sector, VIPs among others. In addition, the company also has state of the art training facility for its human resource (OCBC Investment Research, 2011, p. 11).

SIA is a well established airline with a very sound background. The company has always remained profitable despite of numerous challenges both internally and externally. Most of the company’s profits have always been invested back to expand the business. In addition to the strong financial base, SIA also has numerous other resources that have given it an edge over its rivals.

For example, SIA has one of the leading freight handling facilities in the region. The company also has over 95 aircrafts and communication systems which are replaced after every five years.

In addition, SIA’s flight kitchen based in Changi is one of the largest in the world. Last but not least, the company’s brand quality is in all probability the most potent resource. The brand has been nurtured for over three decades to be the most acknowledged and distinguished in the aviation industry (Ayob, 2004, p. 3).

Singapore airline is devoted to the idea of open skies where consumer demand determines the flight destination. However, the company has been unable to access certain countries and airports due to their protectionist policies.

For instance, it took the company a lot of years to access Heathrow and Manchester airports. At the moment, it is still struggling to access transatlantic routes from the United Kingdom. Other weaknesses include lack of growth opportunities for the Flagship Singapore Airline and agility to deal with global crisis (OCBC Investment Research, 2011, p. 11).

Threats and opportunities

The main opportunity for Singapore Airline is the growth of passenger and cargo transport in South-East Asia and the world at large. At the moment, much smaller and remote places are becoming open to the globe. This provides an opportunity for SIA to expand its services. The introduction of lost-cost carrier (LCC) is aimed at capturing this new market segment (UK Essays.com, 2012).

The major threat facing SIA is the increased competition from the Middle East airlines, for example, Tiger Airways and Jestar Airlines. The airline also faces restrictive regulations in certain countries, for instance, the United Kingdom. Another threat is the probable economic depression and pressure on fuel prices (OCBC Investment Research, 2011, p. 11).

Porter’s five forces analysis of the SIA

This model is based on the comprehensive outlook on the company’s strategies that meets the opportunities and threats within and without the industry.

The five forces as identified by porters include: threats of new entrants, bargaining power of suppliers and customers, threat of substitutes, and the rivalry within the industry. Porter’s five forces analysis not only offers a significant foundation for strategic analysis but also examines the viability of the industry to come up possible course of actions (Porter 1980, p. 3).

Singapore Airline is regarded as a distinct industry in Singapore market. As a result, the Porter’s five forces and other externalities have considerable impact on the airline. Regionally, the airline is regarded as the market leader because of its outstanding service delivery and distinguished brand.

However, over the recent past, Singapore Airline has been faced with stiff competition from the Middle East airlines and other news entrants. For that reason, industry analysis is very crucial for the company in order to cope with the current and prospective challenges (Singaporeair.com, 2013).

The ease of entry into a market dictates the level of competition. The threat of entry significantly depends on the barriers put in place to ward off the new entrants (Kotler, 2001, p. 33). SIA controls the largest share of the South East Asian market to a near monopoly.

Despite of the fact that Singapore has not restricted access to its route networks, smaller airlines have always found it very difficult to access this market. Nevertheless, the rapid development of the region’s economy and the tourism sector has attracted global airlines into the market (UK Essays.com, 2012).

Customer’s bargaining power in the airline industry are very high. This is due to the fact that buyers have numerous options to choose from. Therefore, Singapore Airline needs to focus most of its attention on consumer satisfaction and provision of exceptional services.

The power of the supplier in the airline industry is also important and has significant impact on the company’s competitive capacity. For this reason, Singapore Airline has established strong ties with its suppliers and other airline companies (UK Essays.com, 2012).

The airline industry has highest threat of substitutes, particularly Singapore where the sole means of international movement is air transport. The threat increased with the introduction of the low-cost carriers. Therefore, SIA must take notice of the threats in different market segments (UK Essays.com, 2012).

Lately the company has been experiencing stiff competition not only from the Middle East airlines but also from major global players, for instance, Cathay Pacific Airways, British Airways and Fly Emirates among others.

However, Singapore Airline has been able to maintain a competitive edge over its rivals by improving its apparatus, increasing fleet network, offering exceptional services and promoting its brand (Singaporeair.com, 2013).

Conclusion

Industrial analysis of the Singapore Aviation industry provides an empirical overview of how external factor impacts the operations of the Singapore Airline. The main purpose of this analysis is to explain the external business environment, its dynamics and forces that propel the changes.

The fundamental idea behind the two tools of analysis is that businesses have to adjust to the externalities. This reflects the idea that business strategies and goals have to fit in between the capabilities and externalities and therefore it is necessary for an industry/ entity to adjust to the changes.

References

Aaker, D.A. (2005). Strategic Market Management. Hobeken, New Jersey: John Wiley and Sons.

Ayob, A.M. (2004). Singapore Airlines Limited: Building a Culture of Service Excellence. Web.

Kotler, P. (2001). Kotler on Marketing: How to Create, Win and Dominate Markets. New York: Free Press.

OCBC Investment Research. (2011). Singapore Airlines Limited. Company Report (MITA No. 022). Singapore: OCBC.

Porter, M.E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.

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The crash of Colgan Air Flight 3407 prompted governmental officials to set higher safety standards that should be met by American airlines. Admittedly, this incident can be partly explained by the errors made by the pilots. In particular, they did not adequately respond to the activation of the stick shaker (The National Transportation Safety Board 4).

This mistake resulted in the aerodynamic stall, and for some time, they could not control the aircraft that began to lose height. At the time, when the crew managed to pull the plane out of the dive, the collision was already unavoidable. Nevertheless, more attention should be paid to the root causes of this event. At first, one should keep in mind that the pilots of this company were often overworked. In many cases, they did not have much time to rest.

Therefore, the fatigue of the crew was a widespread phenomenon, and it undermined their ability to react to the critical situations. The management laid stress on the need to minimize the operational costs, and they did not want to hire a greater number of pilots. Finally, training programs were rather minimalistic. They did not help crew members become more confident and prepared for possible challenges (The National Transportation Safety Board 10).

Much attention should also be paid to the culture of Colgan Air Inc. In particular, it can be called reactive. In other words, the management only responded to some problems that often manifested themselves. However, they did not emphasize the importance of continuous quality improvement.

Furthermore, they did not try to anticipate potential risks. Moreover, in many cases, the senior executives attached importance only to superficial improvements and policies. For instance, when the safety procedures of this airline were criticized by the Federal Aviation Administration, the management only made a Power Point presentation for the employees.

This presentation was supposed to identify the key responsibilities of workers. Nevertheless, they did not ensure that workers could comply with these requirements. As a result, quality and safety were not regarded as the essential values of workers. It is one of the flaws that should be identified.

One can argue that this incident could be preventable if the pilots had been sufficiently trained in such aspects as stall monitoring and the recovery of the plane. Very often, such failures can be explained by panic, but not some insurmountable difficulties. Additionally, the actions of pilots might have been different if they had not been by fatigue. Therefore, it is critical to introduce safeguards that can prevent such disasters.

The recommendations offered by the National Transportation Safety Board are appropriate, and they can minimize the risk of such catastrophes. In particular, this organization states that airlines should develop more sophisticated training programs. They must enable pilots to anticipate dangerous situations that can threaten the lives of patients.

For instance, one can mention aerodynamic stalls or severe icing conditions (The National Transportation Safety Board 38). Additionally, this agency says that it is necessary to focus on the needs of commuting pilots (The National Transportation Safety Board 38). These professionals have to spend much time on travel after the end of the flight. In turn, they are more vulnerable to the effects of fatigue. Therefore, they need more time for rest; otherwise, they may not work efficiently.

The main lesson of this case is that the attempts to reduce operational costs at the expense of safety and quality can result in significant losses. At first, one should consider the threats to the lives of people who put their trust in the efficiency of airlines. Additionally, much attention should be paid to the effects of such events on the reputation of companies.

In particular, customers may not want to use the services of airlines that do not reach the highest quality standards. Finally, these businesses may sustain considerable financial losses that can eventually undermine their sustainability. Thus, business administrators should be aware of these dangers.

In turn, the new legislation includes several provisions that can avert the catastrophes such as the crash of Colgan Air Flight 3407. According to these regulations, airlines should offer the ground training for every pilot. These professionals should know how to cope with such situations as aerodynamic stalls.

This requirement is consistent with the suggestions made by the National Transportation Safety Board. The legislators also set requirements for the scheduling of pilots’ work. The employees, who work in different time zones, should have more time for rest (The U.S. Congress 16). For a long time, this issue was overlooked by managers, especially when they tried to reduce operational costs. So, these standards can increase the safety of passengers.

These examples indicate that in many cases, aviation incidents take their origins in the inefficiencies of the procedures adopted by companies. Furthermore, cost-containment initiatives must not impair the quality and safety policies. The changes that are required by governmental and non-governmental agencies can eliminate many of the flaws that led to the crash of Colgan Air Flight 3407.

Works Cited

The National Transportation Safety Board. Aircraft accident report, Washington: NTSB, 2009. Print.

The U. S. Congress. Airline Safety and Federal Aviation Administration Extension Act of 2010, Washington: U. S. Government Printing Office, 2010. Print.