Category: Airlines

Introduction

Rivalry in the airline industry across the globe, and particularly in the Middle East, has resulted in airline companies looking for avenues to boost their competitiveness and stay profitable. One of the strategies that some firms are using is merger and acquisition. It is imperative to acknowledge that not all companies that opt for this approach end up achieving the intended goals (Manuela, Rhoades, & Curtis, 2016). Nonetheless, the cases of failures of mergers and acquisitions do not deter airline organizations from leveraging the same in a bid to improve their performance. XYZ is one of the firms that are experiencing challenges in managing mergers and acquisitions. This company is among the leading airline businesses in the United Arab Emirates, which runs over 1000 flights weekly.

Since its inception, this corporation has remained profitable and witnessed exponential growth. However, competition from companies like Fly Emirates and Qatar Airlines has led to this firm embarking on an ambitious expansion strategy by merging with and acquiring other non-performing airlines. Today, some of the merged and acquired businesses are at the risk of being closed due to poor performance. The company is also contemplating terminating contracts of many employees as a strategy to reduce operations expenses. The primary aim of this report is to analyze the reasons that are contributing to the challenges in managing the underperforming firms at XYZ airline. Many airline companies are contemplating mergers and acquisitions as a tactic to improve their growth and overcome competition. Hence, the rationale for conducting this study is to assist these businesses in making informed decisions.

Literature Review

The issue of mergers and acquisitions in the airline sector dates back to many decades ago. Scholars identify three primary motivations that encourage investors to go for this mode of business operation (Huschelrath & Muller, 2014). They are a speculative, monopoly, and ordinary business intentions. The existing literature is inconclusive, as it does not clearly differentiate between various motivations. Nonetheless, Huschelrath and Muller (2014) argue that these three motives play a critical role in many mergers and acquisitions, particularly in the airline sector. Manuela et al. (2016) state, Despite all the good intentions of mergers, the picture that emerges is a pessimistic one: widespread failure, considerable mediocrity, and occasional successes (p. 142). An analysis of over 6000 mergers and acquisitions across different industries reveals that they do not necessarily improve organizational efficiency and profitability (Prince & Simon, 2017). Some researchers argue that hubris, personal benefits, and synergy are the three vital incentives that contribute to mergers and acquisitions.

The synergy theory maintains that most managers believe that mergers or takeovers help to improve the value of an organization. Proponents of this hypothesis contend that this strategy assists the management in boosting shareholder value, reduce rivalry, and improve efficiency. According to Schosser and Wittmer (2015), the synergistic benefits attributed to mergers and acquisitions emanate from economies of scale, proficient management, enhanced production mechanisms, redeployment of resources, and integration of complementary assets, among other value-generating methods. One of the forces that led to XYZ Airline resorting to mergers and acquisitions was the desire to boost efficiency and expand its market coverage. This companys leadership trusted that it could use this strategy to grow its global reach by curtailing political interference, particularly in hostile markets. Although XYZ Airline has managed to realize these goals in some mergers, others have proved difficult due to external influences.

The hubris theory identifies overconfidence amid the management as one of the conditions that result in firms deciding to acquire or partner with their rivals. Huschelrath and Muller (2014) allege that, at times, bidding teams may have erroneous information regarding the worth of the target company, leading to them making a grievous judgment. In some instances, overconfident executives overestimate the advantages of their targeted takeover. As per Cortes, Garcia, and Agudelo (2015), audaciousness among managers contributed to the failure of the merger between Volvo and Renault. Overconfidence among the leadership of XYZ has led to the company partnering with the wrong airline firms. The management failed to determine the degree of control that it would enjoy after merging with some airline businesses, especially those that were government-owned. Thomas and Kummer (2015) posit that the success of mergers and takeovers depends on the degree of power that the buying firm has over the purchased businesses. Despite this airline changing the management of the purchased firms, it faced challenges from labor regulations. For instance, workers unions made it difficult for this airline to alter its hiring terms to boost profit.

The personal benefit theory asserts that organizational leadership may promote mergers and acquisitions with the objective of enriching itself at the expense of shareholders. As per this hypothesis, private gains motivate some amalgamations where corporate leaders take advantage of their powers to obtain value for themselves (Cortes et al., 2015). For instance, under leadership control, if a firm has a consistent flow of revenue, the management team may use the surplus money to venture into value-destroying or low-profit partnerships instead of issuing bonuses to shareholders. Much of the existing studies have focused on the role of synergies in mergers and acquisitions decisions. Limited literature has analyzed the contribution of hubris and personal benefits to takeover resolutions.

It is imperative to appreciate that the processes of mergers and acquisitions involve multiple players with varied interests, hence the need for due diligence before making the final decision. The executive of a company that is being acquired may use varied strategies to prevent the takeover. At the same time, the acquiring firm may utilize its financial power and foothold shareholding to manipulate the process. Empirical studies such as Managerial Equity Holdings, Target Management Resistance, and Bidders Toe-Hold have tried to explain the conditions that determine the success or failure of takeovers. However, they do not elucidate the factors that encourage organizational leaderships to enter into partnerships or acquire rival companies. Presently, there is no single theory that demonstrates the correlation between hubris, synergy, and personal benefits, which are the three primary forces that cause partnerships and takeovers. Therefore, there is a need for further research to come up with a hypothesis that integrates these three motivations to mergers and acquisitions.

Methodology

Research Design

This study relied on descriptive research design as it is helpful in developing a profile regarding a given phenomenon. Bengtsson (2016) defines this mode of investigation as a systematic, empirical inquiry where a researcher does not have direct control of independent variables, as their manifestation has already occurred or because they inherently cannot be manipulated (p. 9). The pollsters main goal was to determine the factors that contributed to the success and failure of some of XYZs mergers and acquisitions.

The population of the study

This studys target population consisted of managers from XYZ, as well as the partner and acquired firms. Presently, this company has formed alliances with seven airline businesses. Additionally, it has acquired two firms in an attempt to expand its market coverage and overcome competition. The pollster selected 25 managers from these companies. The participants were pooled from different levels of administration, including human resources, cargo handling, air hostess, and pilots. The researcher chose to use managers as they had adequate knowledge of the daily operations of their respective firms and the challenges that they encountered.

Data Collection and Measurement

This study used both primary and secondary data. The researcher utilized a questionnaire to gather primary information from the participants. The survey comprised open-ended questions to allow the respondents to explain their answers. These queries aided in the collection of structured responses that were helpful in making concrete recommendations. The investigator used a few members of the population (5 executives) to evaluate the reliability and validity of the questionnaire. It was assessed to ascertain its consistency in gathering information from the respondents. The questionnaire was later sent to all the selected managers, both as hard and soft copies. The researcher also gathered secondary data from peer-reviewed journals. The publications were selected based on their year of publication (Not older than 5 years) and content. This study used journals that discussed the issues of mergers and acquisitions, specifically in the airline sector.

Data Analysis

This research relied on qualitative data, thus making it difficult for the pollster to use statistical methods of analysis to evaluate the acquired information. Therefore, the pollster applied content analysis techniques to establish the primary themes that were manifested in the responses gotten from the executives and secondary data. According to Bengtsson (2016), content analysis is a research method that provides a systemic and objective means to make valid inferences from verbal, visual, or written information in order to describe and quantify specific phenomena (p. 11). The process of data analysis involved four critical stages, which were decontextualization, recontextualization, classification, and compilation. The researcher repeated the individual phases several times to guarantee the validity and quality of the analysis. The decontextualization process entailed reading and re-reading the information gathered via questionnaires and secondary sources to have clear insight. The investigator used different codes to identify the concepts that were perceptible in both the secondary and primary information. The major themes that were apparent included synergy, external interference, and lack of absolute control of mergers. The recontextualization stage involved ensuring that all the significant meaning units were captured. The researcher re-read the questionnaire and secondary information and crosschecked it against their list of meaning units to ensure that nothing was missing.

Before the classification procedure began, the investigator condensed all extended concepts by minimizing their number of words, making sure that they retained the intended meanings. The categorization phase covered the identification of the main themes that appeared in both the secondary and primary data. The researcher ensured that all the selected concepts were internally homogeneous. After establishing the main categories, the researcher embarked on the analysis and compilation process. They evaluated all facets of experience that the respondents described, including labor relations, managerial challenges, and activities coordination, and established the themes that were common amid the answers given by different managers. It helped in arriving at a conclusion as to why some of the XYZs mergers and acquisitions succeeded while others failed.

Analysis and Findings

The management of XYZ identified three main factors that contributed to either success or failure of its numerous mergers and acquisitions. They included overconfidence amid the leadership, lack of absolute control, and external interference. The move to own stakes in numerous airlines enabled XYZ to expand its global coverage and enter into markets that were initially deemed politically hostile. For instance, the airline managed to target the Indian market, which is potentially profitable due to the countrys high population. Nevertheless, some mergers and takeovers did not attain the expected outcomes. Managers from underperforming alliances and acquisitions (12 out of 25) cited hubris among the management as one of the factors that contributed to XYZ investing in a fruitless business.

The executive failed to conduct due diligence before acquiring some airlines. It assumed that because many takeovers had turned out to be productive, all the others would work the same. In some mergers, XYZ was not given control over the airlines, making it difficult for the company to introduce changes. Therefore, this corporation could not guarantee synergy between it and the partner airlines due to the inability to make autonomous decisions. Other participants (11 out of 25) identified external control as among the factors that inhibited the success of the takeovers. For instance, influential labor unions prevented XYZ from making radical changes that could have enabled the acquired airlines to become profitable. The literature review highlighted the three factors (hubris, synergy, and external influence) as the most predominant forces that contribute to the failure or success of mergers and acquisitions. Thus, to some extent, the findings of this study corresponded to what is already documented regarding the challenges encountered in the management of takeovers.

Discussion and Conclusion

Mergers and acquisitions help organizations minimize competition and grow their global reach without having to establish operations from scratch. Nevertheless, lessons from XYZ indicate that due diligence is paramount before choosing companies to partner with or acquire. Although mergers and acquisitions may result in a corporation benefiting from economies of scale and resource redistribution, it is imperative to determine the degree of power that the acquiring firm will have over its partners. Overconfidence is a great hindrance to the success of mergers and acquisitions, as it may lead to the acquiring firm overrating the performance of the target business. This study highlights hubris, synergy, and external influence as the main factors that determine the success or failure of XYZs mergers and acquisitions. The lack of full control of partner airlines makes it difficult for XYZ to introduce significant transformations that could help to turn around the performance of the struggling firms. The inability to manage some mergers and acquisitions has led to XYZ sacking many employees. As a consultant, one would recommend that this airline terminates unproductive partnerships and closes or sells nonperforming companies to minimize operations costs.

A major impact of this study is that it highlights the importance of ensuring that one does due diligence before deciding to partner or acquire a particular company. Moreover, the findings shed light on some of the factors that determine the performance of mergers and acquisitions. The main limitation of this study is that it used a very small sample population, making it difficult to come up with comprehensive findings. Moreover, the method of data analysis used was subjective, hence prone to bias. Future studies should comprise a big sample size to obtain inclusive and universal results.

References

Bengtsson, M. (2016). How to plan and perform a qualitative study using content analysis. NursingPlus Open, 2(1), 8-14.

Cortes, L. M., Garcia, J. J., & Agudelo, D. (2015). Effects of mergers and acquisitions on shareholder wealth: Even study for Latin American Airlines. Latin America Business Review, 16(3), 205-226.

Huschelrath, K., & Muller, K. (2014). Market power, efficiencies, and entry evidence from an airline merger. Managerial and Decision Economics, 36(4), 239-255.

Manuela, W. S., Rhoades, D. L., & Curtis, T. (2016). The U.S. Airways Group: A post-merger analysis. Journal of Air Transport Management, 56(1), 138-150.

Prince, J. T., & Simon, D. H. (2017). The impact of mergers on quality provision: Evidence from the airline industry. The Journal of Industrial Economics, 65(2), 336-362.

Schosser, M., & Wittmer, A. (2015). Cost and revenue synergy in airline mergers  Examining geographical differences. Journal of Air Transport Management, 47(1), 142-153.

Thomas, M., & Kummer, C. B. (2015). M & As in the airline industry: Emotions flying high. Strategic Direction, 31(8), 17-19.

Having been established on 15th February 2011, XYZ airline has the responsibility of serving its customers well. The mission is quality service with a substantial continuity in its endeavor. As a manager in the HR department, I have the responsibility to prepare a staffing plan. This plan outlines the number of employees to recruit; the skills required, experience, the procedure of interview, and how to continue developing skills on the employees to remain competitive in the ever turbulent market.

To achieve a sound staffing plan, XYZ airline requires skills, which would be described in the job descriptions. In the job description, there are responsibilities, duties, and tasks required for a specified job opening. As this is the case, the company would be bound to its job description. This specifies the legal attribute in the sense that once an employee accepts the criteria (skills, responsibilities, and tasks) then they would apply for the job. If accepted in the company, employees would abide by the rules and policies of the company (Bechet, 2008).

The company is an equal employer. The job would be advertised so that all eligible job seekers are given the chance to apply for the positions. Skills that the job requires would be checked properly before the interview so that a proper match to the job description would be realized. Canvassing is not allowed. If a prospective employee canvas, there would be legal action and automatic disqualification.

In Gerhart, Hollenbeck, Noe, & Wright (2007), for a company to start its operations, there are diverse things to be considered, ranging from skills, responsibilities, and tasks. The XYZ airline company would wish to recruit staff that works in several departments; manufacturing, operations, customer service, distribution, marketing, and accounting. To get qualified candidates, there is an outline of the skills required on every job, the procedure of application, the interview process, and how feedback to the successful candidates would be achieved. The successful employee would sign a K-24 form that stipulates the terms of employment, payment, and task to be performed.

Job Description and Skills Required

The following table outlines the details of a job opening at the XYZ Company, the skills required, the number of employees required, and the date that the job would commence. This is the table that the company would follow in the advertisement of job Opportunities.

Accounting

• Essential or Minimum Requirements: University degree in Commerce  Finance or accounting option & relevant accounting qualifications  CPA finalist or ACCA
• Main Responsibilities: Ensure all the financial transactions and payments are conducted and recorded professionally and ensure that all accounting and financial records are up to date.
• Skills: Planning, Accuracy of data, know computer (SPPS and MS Excel).Work under pressure, and meet deadlines. Fluent in written & spoken English Good interpersonal and communication skills and good writing and presentation skills.

Operations

• Essential or Minimum Requirements:Bachelors Degree in Commerce (Operations Management) or in engineering At least 5 years experience in Leading Operation Practice At least 4 years experience in Accounting &Financial Concepts
• Main Responsibilities:Improve the daily Operations of the airline. Prove effective remote management skills.
• Skills: Good communication and presentation skills are essential. English: Fluent

Customer service

• Essential or Minimum Requirements: Bachelors degree in Customer care
• Main Responsibilities: Respond to clients questions. Have a principled approach to dealing with customers instance by instance.
• Skills: Have strong negotiation and personal skills.

Manufacturing

• Essential or Minimum Requirements:have Bachelors Degree in Business or Technical discipline.
• Main Responsibilities: to organize a well planning of manufacturing processes. Organization of effective operations in the company.
• Skills: Utilize the right management skills to assist in a reduction of manufacturing cost.

Procurement/Distribution

• Essential or Minimum Requirements: Bachelors degree in commerce (Procurement and Supply Chain Management)
• Main Responsibilities:Enhance the Airlines competitiveness through an establishment of an environment that has continued flow of services and goods in the company. The goods should be of good quali.
• Skills:Working in detail to effectively and efficiently identify, select and develop reliable, responsive supplier base, which is competent, has the capacity and committed to fulfilling all the day-to-day need of the user department(s).

Marketing

• Essential or Minimum Requirements: Degree in Marketing.
• Main Responsibilities: Help in the advertising of the airline company and selling the companys products in the market.
• Skills: Ensuring that cost is kept to a minimum by variety reduction, economical lot sizes, providing both internal and external customers with the required service levels in terms of quantity, quality and order fill rate, thus protection against lead time uncertainties.

Interview & Conclusion

After receiving applications, candidates who qualify would be contacted for an interview. The ones who prove their skills in the panel and passes the exams would be considered. They would be contacted and advised to report on specified dates for orientation and training purposes. In the companys continuity process, there would be training on several occasions.

References

Bechet, P. (2008). Strategic Staffing: A Comprehensive System for Effective Workforce Planning. New York: AMACOM Div American Mgmt Assn.

Gerhart, B., Hollenbeck, J., Noe, R. & Wright, P. (2007). Fundamentals of Human Resource Management. New York: The McGraw-Hill Companies, Inc.

Over many years, strikes have been the most common way workers have aired their grievances to their management or union. The Dolven news report hit the news of the airline ramp employees at the Miami International Airport on strike. These employees who serve the American and Delta Airlines strike to propel their employer, Eulen America, to help in improving their working conditions. The workers described their current working conditions as unbearable to all of them.

They had a break-less shift under the scorching sun in Miami on the overheated tarmac. The ramp workers also complained of using broken equipment to ferry the objects unloaded from the airplanes. Eulen America did not also pay the laborers on vacation, thus increasing the economic constraints of those on vacation. The employer did not pay the workers who were also on sick leave.

Some workers complained they had come from countries with hardships, hoping America would solve their problems, only to find extreme conditions. They complained of their difficulties in providing their service to American and Delta Airlines (Dolven). A Democratic presidential aspirant, Cory Booker, accompanied the striking ramp workers and said he was present to support the workers as their rights were essential.

The employees contacted Eulen America to address the complaints of his workers, but the management had not responded to these workers complaints. American and Delta Airlines were also in support of the striking workers to ensure that the employer improved the working conditions of the ramp workers. The Airline companies stressed they required the ramp employer to maintain excellent working conditions for their workers.

If I were the employer, I would have changed several approaches to striking workers to end the strike and fix their problems. I would arrange for negotiation sessions with my employees to listen to their grievances. According to Sudarmo, these negotiation meetings play a huge role in ensuring better human resource management which is crucial for any businesss success (94). Human resource management has a significant part in determining the overall success and performance of a company.

These meetings help to build a solid relationship between the workers and the employer. Under these sessions, the employer and his employees can reach a consensus to solve the strike crisis even in the long term. The workers appreciate that their employer readily listens to their demands and thus can perform better at work to ensure the prosperity of the airline companies they serve. It encourages even more workers to work for the employer because of an excellent reputation among many people.

The second approach I would change is ensuring that I meet the demands of the laborers. The workers complained of poor working conditions and equipment and were not paid for sick leaves or vacations. According to Ornek and Esin, good working conditions have a high correlation to the psychological status of the workers (102). The health considerations and leaves also play a role in determining the mental health of the workers. I would secure that I provide the above demands for my laborers to ensure their maximal and better work performance.

Employees having the right resources and improved working conditions enhances their satisfaction in the working environment. Such workers will hardly strike again or quit their job as all the essential resources are available. They do not suffer the stress of being employed and strive toward the success of the company.

Works Cited

Dolven, Taylor. Ramp and Cargo Workers at Miami Airport on Strike to Protest Unsafe Working Conditions. Miami Herald, 2021. Web.

Ornek, Ozlem Koseoglu, and Melek Nihal Esin. Psychological Health Problems Among Adolescent Workers and Associated Factors in Istanbul, Turkey. Safety and Health at Work, vol. 9, no. 1, Mar. 2018, pp. 1018.

Sudarmo, Sudarmo. Excellent Human Resource Management in Business Practices: Achieving Sustainable. International Journal of Humanities, Literature & Arts, vol. 3, no. 1, pp. 93-98.

The case discusses two American airlines, Spirit and Northwest Commercial carriers, that engaged in a fierce price war in the late 1990s. The former was a regional airline, while the latter provided international flight services. The rift between the two was due to a disagreement over price charges on two local routes that each served, namely, Boston-Detroit and Detroit-Philadelphia. Spirit argued that Northwest dramatically lowered their prices, which they perceived as predatory and a violation of the Sherman Act. On the other hand, Northwest firm defended its position, stating that its actions were permissible and did not violate the antitrust laws. The case elucidates the legal and economic aspects of predatory pricing. It also illuminates the economical disposition of price competition between Northwest and Spirit commercial airlines.

Predatory pricing is a trading strategy designed by an incumbent firm to create dominance or monopoly over a small rival or entry company. It is achieved through cutting prices and creating doubts on prospects of success for other competitors. This case explains that vigorous pricing is only beneficial to customers during the price war but detrimental in the long run due to monopolistic charges. As for the predator company, recoupment for losses during the price war only happens if the target firm exits the market or the incumbent firm ascends to a position of dominance.

The article also elaborates on the difficulty encountered in distinguishing predatory pricing from legitimate competition. Multiple theories to solve this dilemma have been discussed; however, commentators dispute these proposals, claiming that none provide an accurate framework for distinguishing between predatory and authentic pricing. The case also discusses the three-step approach crucial in proving a companys engagement in predatory pricing. It includes analysis of the relevant market to determine if its structure favors one company to excise market power over the other, economic assessment to evaluate if predatory prices are below appropriate, and evaluation of the likelihood of a predatory company to recoup losses after the exit of a target rival.

The case provides a brief chronology of events from the establishment of Spirit and Northwest Airlines to the predation period. Northwest Airlines was founded in 1926 as a local mail carrier before it proceeded to provide passenger services. In 1986 it merged with other Republic Airlines and commenced its international flights. At the time, Spirit Air Company was a low-fare local carrier with a low economic profile compared to Northwest Airlines. Both commercial Airlines served the Detroit-Philadelphia and Detroit-Boston route, but Spirits average fares were consistently lower. In 1995, Spirit Airlines introduced a single nonstop flight in the DTW-PHL route, and Northwest did not respond to this change.

However, when Spirit introduced a second nonstop flight, the rival company dramatically lowered their fares and increased their capacity. A similar incident happened in the DTW-BOS route in 1996, whereby Spirit Airlines introduced a single nonstop flight, and Northwest Flight company responded by ridiculously lowering their prices to match that of their rival. The power move by Northwest carrier in both incidents led to Spirit Company withdrawing their flights on both routes. After Spirit Airlines canceled its flights, Northwest company raised its prices sharply on the routes.

An economic analysis of Northwest Airlines conduct was essential to determine if the companys actions were predatory and in violation of the Sherman Act. The three-pronged method of assessment was employed in this investigation. Market definition required the involved parties to agree on the geographical extent and market products. Both Airlines agreed the geographical routes were the city pairs DWT-BOS and DWT-PHL.

However, there was a dispute concerning clients to be considered in the assessment as Spirit Airlines excluded connecting passengers, a concept the Northwest company did not support Similarly, Northwest carrier included non-price-sensitive passengers in their evaluation, which contradicted Spirit Airlines standpoint. The latter argued that dramatic price changes by their counterparts influenced decisions made by price-sensitive passengers, which ultimately led to a reduction in load factors. On the other hand, their rivals provided compelling evidence demonstrating that regardless of whether a passenger is price sensitive or not, they would still pay higher fares if the Spirit Airline were not an option.

An assessment of market power revealed that Northwests conduct was not predatory. Though they imposed losses on rivals by lowering their fares, their operations were sustainable and remained profitable throughout the predatory period. Evidence showing that Northwest Airlines did not incur losses by lowering their fares proved that the companys response to the entry of their counterparts was non-predatory.

The final step in assessment is a recoupment test to evaluate whether losses incurred by the predatory company are remunerative upon withdrawal of the target firm. In this case, the recoupment test showed that the Northwest carrier was not predatory since there were no losses in the predatory period. Additionally, their economic estimates did not reveal an anticipated loss that would be recovered by Northwest carrier through monopolistic charges. The Spirit vs. Northwest lawsuit ended with a whimper, with the latter company filing for bankruptcy within the same year. Spirit changed ownership and gradually established itself as a prosperous local airline. It is recognized as the successful plaintiff that won the fierce predatory pricing lawsuit.

In this assignment, I would like to discuss the logos of Canadian airlines and their loyalty programs, and ways to increase customer confidence. The first logo I would like to discuss is that of Air Canada. The main symbol of Air Canada at the moment is the maple leaf in a red circle. The company used this logo for almost 30 years, from 1964 to 1992 (Logos World, 2021). Then the logo was changed several times but eventually decided to return to its roots. Air Canada explained this decision as the desire to restore trust in the brand and show its heritage (Logos World, 2021). The key color was black in addition to white and red, which form the flag of Canada. Its inclusion in Air Canadas style was inspired by the gray and black cliffs of the Canadian Shield. The company is targeting the profile of a patriotic customer who trusts domestic quality.

To increase customer loyalty, the airline is taking some steps. The branding strategy is to present the company to customers as a carrier with the most customer-oriented conditions. For example, the company is constantly reviewing and improving flight conditions, thus making it easier for its customers to be on board. For me, the most striking feature of the companys branding strategy is that by appealing to customer expectations of domestic quality, the brand makes up for them on all levels. In this way, customers see that behind the beautiful brand, there is absolute quality service.

The second company I would like to discuss is WestJet. Although the WestJet Airlines logo has undergone at least three changes since 1996, when the company was founded, the palette and overall dynamic design style have remained the same (WestJet, n.d.). The logo currently portrays the company name in italics, with an abstract plane to the right representing a mountain. The mountain, in turn, is incorporated into a maple leaf. This is a tribute to the airlines roots in the Canadian Rocky Mountains. WestJet is a low-cost carrier. Consequently, the companys branding aims to attract customers for whom speed and low cost are essential.

The design is dynamic and simple at the same time, which correlates well with the airlines target audience. To increase customer loyalty, the company regularly conducts various discounts and promotions. For example, one can find a dozen great-priced vacation or business deals on the companys website at any time. I think the most distinguishing feature of a companys branding is its dynamism. It completely fulfills its purpose of attracting customers focused on fast service at an affordable price.

The final company I would like to discuss is Air Transat. The companys logo is distinguished by spelling the name in two rows and the blue star to the left of the lettering. Since the company mainly works with travel, the logo conveys the vivid emotion and joy of vacationing (Air Transat, n.d.).

The main clients of the company are tourists. The airlines attract them with appropriate branding, alluding to rest and new experiences. To maintain customer loyalty, the company offers all kinds of discounts for tourist flights. In addition, tourists can also book a flight in advance at a lower price than those who book it closer to the departure date. I think company branding is very appropriate. For me, the most striking feature of it is appealing to customers positive emotions during their vacation. I believe this strategy is correct because clients will unconsciously want to return to the company to feel these emotions again.

References

Air Transat. (n.d.). Air Transat unveils its new fleet livery. Air Transat. Web.

Logos World. (2021). Air Canada Logo: History and meaning. Logos World. Web.

WestJet. (n.d.). History. WestJet. Web.

Objective of Airline in Australia

The objective of the airlines would be providing better services and products to new destinations. There are untapped markets in the business field that are a lucrative form of investment. If the investors keenly assert their objectives and service provision, there is possibility of having a niche market that will accrue success.

Again, there is the aspect of providing a range of new services to the field. There are some services that are lacking in the market due to lack of suppliers. Starting a new range of services will be greatly appreciated. Similarly, the business is to bridge the existing gap in the market. The airline will make it easier for people to connect to some terminals that have not been existent. For instance, there are many places within the country that do not have a linkage that uses airlines.

Location and Destination

The head quarter of the airline will be at Canberra which is the capital city of Australia. This is the best location for the airline industry as it is a busy city that has a large population density. This will provide the avenues of having a deeper niche market that will accrue large business transactions. To add on, the city is a busy one that has many people travelling in and out. This is the targeted market for the airline industry (Juttner, 2005, pp. 4-9).

Moreover, it will be easier for the legal processions to be done in Canberra than in any other location. The airline will operate in a number of destinations within the country. These are the initial stages before the upgrading into other destinations that are international. For instance, the airline will operate in Sydney, Alice Springs, Port Hedland, Darwin, Perth and Townsville. These are the basic destinations that will form a possible business niche for the airline.

Type of Business Ownership

The business will be a shareholding airline that has a number of investors that are interested in making lucrative profits. The business will rely on the contributions by the investors for capital formation. The investors will have the free will of deciding the amount of cash they can inject into the project.

Similarly, the interested parties will have a pool of ideas that could be used in the business for effective running. The sharing of ideas will help the business in attaining its success in a number of ways. Since the stakeholders have vested interests in the capital formation and the business, they will only give successive ideas. Retrogressive ideas will not be accepted as the number of people involved will notice it (Juttner, 2005, pp. 7-15).

Day Operations in the Instrument Landing System

The airline will effectively adhere to the instrument landing system in all its landing in relation to aircrafts. There are a number of factors that the aircraft management will use in effecting the landing and off take of the aircrafts. By using combinations of radio signals, the aircraft management will decide on the landing procedures from the information received. For instance, there will be keen observation on the intensity of lighting and visibility (Happy, 2010, pp. 45-50). These are factors that are considered since they could affect the airline due to change in fog, rain or snow.

For better management of the airline there are some points that will be regarded. Reliability and maintenance of employees in regard to training will be vital. This will include the schedules of customers and customer database. Secondly, there is the aspect of test on equipment. The equipment will be given tests to determine their accuracy. Thirdly, the inclusion of the supply support supply plan will be effective in making the availability of the products and services efficient. Fourthly, personnel training will be an effective way to give better results in the airline. The training is an excellent factor in providing better services to customers. Apparently, there is the use of technical data in management. Technical data will affect a number of decisions in the airline industry.

Similarly, there is the Facility plan that will increase the utility of the resources. Secondly, transportation and handling of equipment will affect the performance of the airline. Therefore the management will have to design effective ways of handling these factors. Thirdly, inclusion of computers and information technology will be a success for the industry. Fourthly, there will be a system retirement and disposal plan. This will include development of better systems in the airline to relieve the old systems.

There are a number of perspectives that will be used to conclude the landing of airplanes (Happy, 2010, pp. 23-25). For instance, there will be close monitoring and identification of the best strategies that could be used in the landing and off take of the air planes in the airlines. Similarly, there will be marker beacons that include outer marking, middle marking and inner marking. Again, there will be a satisfactory approach in lighting and localizing back course.

Instrument Landing Plan and Logistic Support Analysis

The aircraft management will use a number of strategies in arranging for the daily flights that the airline will affect. This will solely depend on the activities, the number of airplanes and the expected niche market. For instance, there will be constant flights on Monday and Friday.

Additionally, the management will focus on cities and towns that have a larger market share for frequent flights. This will be a business priority that could accrue larger profit shares in the industry. Thirdly, the airline industry will incept en-route flights. These are flights that are destined for a particular city but through another terminus. This will be a positive business as it will increase the seat capacity and occupancy.

List of References

1. Happy, R., 2010. Project 2010 Project Management: Real World Skills for Certification and Beyond. New York: John Wiley and Sons. Print.
2. Juttner, U., 2005. Supply chain risk management: understanding the business requirements from a practitioner perspective. Cranfield: Cranfield School of management.

In order to formulate novel and effective marketing strategies for certain firms, it is essential to first analyze their current approaches to advertising and factors that are and are not efficient. Turkish Airlines is a successful air travel company that had continued to thrive even after the introduction of deregulation in Turkey when international firms were able to offer domestic flights where only one company provided them prior. Turkish Airlines are able to maintain a profitable state due to high ticket sales, international presence, low prices, and prevalent marketing (Aydoan, 2017). Turkish Airlines currently utilizes several mediums for advertising, including printed media, television, sales of branded products, and more.

The strategy employed by Turkish Airlines can be summarized as being geographically localized and standardized, which offers both strengths and weaknesses. While this method of marketing is well-researched and reliable, it is not inherently adaptable to changes in technology and culture. For instance, with the rise of social media, the entire landscape of marketing has shifted, with engagement with advertisements being much higher through networking platforms. A recent public relations campaign included the potential to win tickets when posting a selfie (Ott, 2018). While the advertisement was a success, the company has not used its online presence to its full potential.

As such, the recommended additions to the current marketing strategies of Turkish Airlines include increasing their prevalence and engagement on social media. This can be done through a number of methods. First, competitions for free winnings, tickets, or other products are always effective in gathering exposure. The recurring provision of discount codes or notifications of sales is also a productive strategy. Turkish Airlines may also employ its platform to address and impact causes or matters that its customers care about. While these are the primary and most effective approaches, expansion on their social media platforms is likely to garner better exposure than more traditional marketing.

References

Aydoan, H. (2017). The International Advertising Strategies of Turkish Airlines In The Context Of Globalisation. Journal of Social Science Research, 7(3), 539-559. Web.

Ott, G. (2018). Turkish Airlines Is Giving Away Free Flights For Taking Selfies In London. God Save The Points. Web.

A Study of the Dimensions of Organization Structure  Emirates Airline

To avoid managerial issues, mismanagement provisions, and other contentious issues, Emirates Airline has divided its sectors into several divisions. This include airport services, engineering, tour businesses, hospitality sector, and catering provisions among others. Each sector is headed by an executive manager who reports to an overall company management.

There is an overall CEO who oversees the entire activities of the company. An approach in management has helped in the delegation and execution of duties in a hierarchal manner. Every employee is answerable to his or her immediate manager in the entire organization. The challenges of job satisfaction and responsibility that might distract the companys operations are being handled by this trend.

The organization has stringent management style to ensure it approaches its managerial challenges with professionalism and appropriateness. Precisely, the management has enacted stringent approaches to curb all the emerging managerial challenges that might affect the company (Collins 56).

Emirates Airline is a globalized organization with agents and offices in numerous countries. Its organizational structure, allocation of resources, and division of responsibilities has favoured the companys operational mechanisms to avoid management mishaps, which might affect the organization.

As an organization, which has developed and continues to expand internationally, the company has approached its managerial challenges with appropriate mechanisms and protocols meant to prevent any loopholes that might arise in the execution of duties and international relationships.

Evidently, the issues of poor management have forced numerous organizations to wreck their objectives. This is an internal challenge that can cause both short-term and long-term problems within the company. To manage this issue with appropriateness, the Emirates management has ratified appropriate work protocols and performance assessment criteria for the management crew and all staff to keep the records of each individuals viability, competency, and work potency (Graham 91).

Performance appraisal occurs periodically and consistently as a culture of the organization. Notably, tracking the performances, responsibilities, and appropriateness of employees is a viable approach within a company. It helps in keeping the records straight and suitable. This move has helped Emirates Airline to stay competitive in its workforce, appropriate management, proactive managerial reactions, and ratification of new business trends.

A Study of Organization Culture

Culturally, the aspects of leadership have helped Emirates to curb numerous business challenges as indicated before. Emirates Airline embraces viable leadership cultures to manage both the internal and external business challenges within the company. It is from the management that the company can attain its viability, prosperity, and global presence.

As denoted before, Emirates Airline has emulated a hierarchal leadership styles (as a culture) to ensure that duties and responsibilities are allocated appropriately to various positions within the organization. This relates to the aspects of responsibility management, which renders every employee responsible for their own deeds.

Every management faction must account for everything in his or her docket (Graham, 2010). This helps in scheming the business strategies, expansion desires, and accountability issues within the company. Precisely, the issue of poor management is a rampant phenomenon in this company. Emirates Airline has approached this culture with novelty, appropriateness, and credibility to ensure that the company stays competitive in the realms of management.

A recognizable external issue in this context is globalization, which has engulfed the entire world and demands every business to acquire new operational trends, transactional mechanisms, and marketing approaches in order to remain afloat in the market and in the global limelight. Emirates Airline has managed to approach globalization with criticality, novelty, and appropriateness demanded within the airline industry.

Its ability to embrace modern technologies, customer focus, and worldwide business trends is enough to signify this claim (Leary 99). Its management and leadership have approached globalization challenges with positivity to ensure that the business remains relevant and competitive in the global market.

Additionally, employee motivation is a critical phenomenon and a massive internal challenge for the workforce of any organization. Through its strategic business cultures, Emirates Airline leadership has approached the issue through creation of appropriate employment provisions that help in motivating employees.

The aspects of good pay, flexible work schedules, diversity tolerance, incentives, performance recognition, and periodic appraisal are some of the measures embraced by the management to ensure that their employees are motivated, remain competent, uphold relevancy, and be able to work in any environment (Shaw 86).

Additionally, creation of appropriate organizational cultures has helped in curbing numerous internal and external business challenges within the company. The management has scrutinized and enacted appropriate organizational culture to help in attaining desired objectives within the organization.

Innovation and Change Management

Emirates leadership has adopted viable innovation and change management strategies in order to realize remarkable results. Change ratification is a critical challenge to numerous organizations. Evidently, the company has realized this stipulation. Thus, its management commits to making appropriate change management procedures to ensure the materialization of the desired changes.

An approach provided by management observes the John Kotters change management principles from inception to completion. Kotter advocates for an urgent creation of the need for the desired changes. This must trigger the entire company stakeholders to understand the essence and significance of the mentioned change.

He concludes by integrating the change management provisions into the culture of the organization. Emirates management and leadership have accepted the aspects of change as a routine within the company. Precisely, to approach the challenges of change embracement with appropriateness, Emirates management has adopted change ratification tolerance and culture within its operations. This has ensured the dynamism, relevancy, and appropriateness of the business with the current business trends.

Mechanism of Communication, Coordination, and Control

The mechanism of communication, coordination, and control of Emirates Airline is critical. Evidently, the company is a globalized organization in the airline industry. It has its headquarters in Dubai, which is one of the seven emirates forming the EAU.

The company coordinates, communicates, and controls its activities from this place. Its management and leadership have established, ratified, and embraced various approaches in response to key internal and external business challenges. In this context, there are numerous issues that frequently emerge within the business and industry at large. These require appropriate responses from the management.

The issues of competition, diversity, globalization, technology, political matters, economic crisis, and territorial legislations among others have contributed to the witnessed approaches taken by the organization to remain competitive, relevant, and buoyant within the industry (Gudmundsson 65). Additionally, leadership styles, motivation issues, viable organizational cultures, and change management skills are some of the lucrative approaches enacted by the Emirate Airlines management to curb the witnessed challenges.

SWOT Analysis

When subjected to SWOT analysis, Emirate Airline has numerous strengths in its business endeavours. The company has several competitive advantages compared to its rivals in the aviation industry. Additionally, it has established right products for its clients. This is evident in the travel arrangements, reliability, and variability in the destinations it covers (Graham 199).

Additionally, it embraces technology and innovation to ensure that it remains competitive. Concurrently, the company has trained competent human capitals hence capable of achieving customer satisfaction. Emirate Airline has equally enhanced its customer services and changed business processes in order to attain the desired competitiveness.

Conversely, the company possesses some weaknesses when analyzed critically (Shaw 234). Some of its customer services still need to meet international standards. The aspects of technology have not been fully enacted in the company despite the stringent competitions experienced. Additionally, it has limited international flights compared to other prominent competitors in the very industry.

Emirate Airline has numerous opportunities it can cease in order to enhance its competitiveness, revenues, and customer value when scrutinized critically.

The demand for aviation services is rapidly growing despite the recent economic challenges. This indicates that the company might perform well in future due to increased flight demands. Another opportunity is the merger it makes with other international airline to enhance its business provisions (Collins 56). Additionally, the fact that it has a competent, innovative, and creative workforce is crucial.

This provides another considerable opportunity in the entire scenario. There are various opportunities in the aviation industry, which the company can harness in order to remain competitive in the market. Conversely, there are business threats that might hinder the wellbeing of Emirate Airline. The fluctuating fuel prices, global fiscal crisis, stringent competition, security threats, high operational costs, and adverse international regulations form critical threats to the company.

Corporate Level Strategies

Emirate Airline has strived to succeed in the aviation industry despite the challenges. The economic challenges, insecurity threats, and market dynamics have affected the company tremendously. This led to the enhancement of its corporate level business strategies. In fact, most organisations in the aviation industry have made considerable losses in the business realms.

This is a considerable provision in the context of customer service and organisations survival in the market. Emirate Airline enjoys considerable strengths in the business arenas. The company has conducted credible business research on its business operation so as to remain relevant on the market. It has also established, ratified, and embraced distinctive competitive advantages meant to outdo other contenders within the industry.

The company has enough strategic resources to counteract its business dynamics despite the challenges. Also, it has a competent human capital with credible knowhow on how to tackle the market challenges. The company enjoys a strong brand having name operated in the industry with excellence since its inception.

Accordingly, the company exhibits some weaknesses in the market spheres (Leary134). It strategically launched international flights to enhance its global presence. Additionally, its approaches to the market dynamics have been strategic enough to counter market challenges with equal measure. The company has also established some business tactics to favour it in the competition quarters.

Divisional Level Strategies

On the companys divisional level strategies, it has numerous departments and business tactics to enhance its market penetration and service provision. Evidently, the company has been resorting to alternative solutions when fronted by business challenges at divisional levels.

For instance, terrorism crisis in 2001 destabilised the aviation industry; however, the company established fresh strategies to ensure that it remained buoyant in the global market (Shaw 54). Additionally, it has been improving its financial and business strategies to conform to the current globalisation demands. The company strived to establish its market foundation since its inception in the global market.

Precisely, despite the internal and external business challenges, Emirate Airline has always had alternative solutions to its operational hiccups. In order to operate globally and exhaust the local markets, novel business strategies and models (at divisional levels) have been integrated to guarantee success. For instance, the aviation industry registered considerable losses in the recent past due to market instability, high operational costs, and revenue plunge; nonetheless, its divisional level strategies allowed it to enhance its market stability.

Application Michael Porters 5 Fs Model

Porters Five Forces are useful in grasping the position of a business venture. This is important since the concerned organization will be able to know its competitive strengths. Knowing business strengths is important in formulating viable strategies meant to enhance competitiveness. Besides, one can easily plan business strategies in a manner that evades losses.

In the Emirate Airlines context, this tool is beneficial in making out whether the new products and services could result into more gains to the business. In using the Five Forces Tool analysis, it is assumed that there are five major factors governing the power of competition of a business within its industry. These factors include; supplier power, buyer power, competitive rivalry, threat of substitution and threat of making a new entry (Collins 56). In analyzing Emirates Airline using porters five forces, these forces are taken into consideration.

Porters 5 forces are applicable in the airline industry with respects in regard to Emirates Airline. This is an important observation following its relevancy in the entire context. For example, threat from new entrants into the industry is applicable in this quarter. Emirate Airline and other existing airline firms are threatened by the entrance of other competitive rivals.

However, since the industry is costly to establish and operate, such chances are limited. Additionally, there is a considerable rivalry from the existing firms within the American market and beyond. Other international airline like Southwest Airline and Qatar Airline among others have fronted stringent competition to Emirate Airline with regard to its international markets.

Additionally, the bargaining power of buyers is evident in the industry due to competition (Graham 99). Customers go for cheap and reliable airline companies. This has forced other industry players to strategize properly and cut prices. Additionally, suppliers operating in the industry have equally fronted their bargaining power.

The jet fuel suppliers usually change the cost of fuels to suit their business interests. This is a massive challenge to the industry and beyond. Another apparent force evident in the case is the availability of substitute products/services. Airline customers can seek the services of other companies if such needs arise. This factor forces numerous businesses to establish their competitive advantages and other relevant business strategies.

Conflict Resolution Mechanism

Viable conflict resolution mechanisms are critical within an organization. Emirates Airline has structured a credible conflict resolution protocol within the organization to ensure harmonious coexistence.

This applies to both the administration and the staff. The airline management has to make a proper and implementable conflict management plan for workers so as to ensure efficiency. For instance, the current work plan of the company must ensure that there are no conflicts between the different groups. These different groups interact at different levels.

Another strategy is that no employee or department should interfere with the other. For instance, 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 (Collins 56).

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 conflict.

Any other topic related to Organization Theory and Design  Diversity management

Another related issue in the context of organizational theory is diversity aspects. The Emirates Airline management has been dealing with is diversity within its workforce. The companys management and leadership have set stringent measures and approaches to handle the issues relating to diversity.

Evidently, Emirates Airline operates globally and has employees of various cultural orientation, sex, race, religion, and beliefs. These are internal factors within the organization and they have long-term impacts on the fates, businesses, and operational capabilities of the company. One of the approaches taken by the managements to handle this challenge is the creation of a viable working environment that would favour all genres of employees.

This move has always promoted productivity, distinctiveness, creativity, novelty, and dynamism among employees. Various employees of Emirates Airline are able to work anywhere in the world following the culture of diversity that the company embraces. Crucially, recognizing the importance of diversity enables organizations to scrutinize their moves and gain the acquired business norms and operational growth.

The emergence and use of new technologies within the airline industry and beyond has been critical to the Emirates group. The organization uses novel technologies to enhance its operations, promote transactions, and stay competitive among other rivals. The efforts to enact technological issues and prospects in Emirates Airline are evident and considerable within the company (Graham 99). The management and leadership have approached these issues with positivity and enthusiasm.

The company has embraced numerous novel technologies within the industry and beyond to enhance customer services, meet the global market demands, and stay dynamic with their services. Technology has been applied in the booking processes, production of airplanes, communication aspects, flight coordination, and other provisions relevant to the industry. The fact that the company has established strong customer service provisions is crucial in this context.

Works Cited

Collins, Verite
R. Careers in Airline and Airports. London: Kogan Page, 2002. Print.

Graham, Anne, Andreas Papatheodorou, and P Forsyth. Aviation and Tourism: Implications for Leisure Travel. Farnham, England: Ashgate, 2010. Print.

Gudmundsson, Sveinn V. Strategic Airline Alliances. Aldershot, UK: Ashgate, 2002. Print.

Leary, William M. The Airline Industry. New York: Facts on File, 1992. Print.

Shaw, Stephen. Airline Marketing and Management. Aldershot: Ashgate, 2007. Print.

Introduction

One of the key pillars of any company or business organization is the human resource department. This is the department that is tasked with managing human capital, the most important asset that a business organization has. For a business organization to be successful, it must have a functional and highly efficient human resource management team.

The core functions of the human resource department are generally the same for any company or business regardless of the size or line of business (Porter, 1985). In a business organization setting like that of an airline company, the human resource department serves as a link between the employees and the top management.

The department is supposed to ensure that it gets the right people and make them help the company achieve its goals and objectives. Workers in the aviation industry, just like any other sector of the economy, need to be motivated for them to contribute maximally to the company they are serving, and the human resource department of that company has a leading role to play to ensure that this is the case.

Roles and functions of the human resource department

The aviation industry is an extremely sensitive and highly volatile industry that has a lot of competition. The industry is heavily influenced by outside forces that constantly cause a lot of changes to the way the business is run. The nature of the business means that airline companies regularly are swallowed by larger companies or merge in order to stay afloat.

Most of them declare bankruptcies on a regular basis. The industry is heavily influenced by uncontrollable factors like the geopolitical and economic situations in the countries in which they operate. The human resource managers in this industry have to provide the human capital for this ever-changing environment.

Since the needs of the airline company will keep changing constantly, the first task of the human resource department is to come up with a system that evaluates the needs of the company on a regular basis, and then to base their recruitment drive on this. The airline industry has many different levels of positions like executives, pilots, stewards and the maintenance crew. The human resource department must know how to recruit competent staff to fill these positions.

To help achieve this, clear lines of communication must be established with each department in order to learn of their specific needs and use that as the basis for recruiting new staff. Once the new employees have been recruited, it is the work of the human resource department to train them appropriately and give them the necessary skills and knowledge they will require to serve the company in various departments.

The human resource department should also come up with a functional strategic plan that can be employed in case of an actual work stoppage, which can arise from employee strike or a drastic event like a crash or hijacking. There is new human resource technology that is being introduced in the industry to help standardize operations, and the use of such technology may lead to cutting back on some positions in the human resource department.

Due to the volatile nature of the airline industry, most employees at any level are usually concerned about job security. The human resource department must form a working relationship with the unions and open up clear communication channels so that most employee issues are dealt with accordingly before they get out of hand.

There is now human resource software that can handle the various functions of the department in an automated and standardized way. These functions include recruitment and staffing, training, technology and call center support.

The biggest human relations issue faced by the human resource department is the threat, or the carrying through, of an employees strike by any section of the companys workers due to dissatisfaction with the current terms of employment or the uncertainty of their job positions. This is usually a very sensitive area that can cause a lot of interference with their airline companys operations if the parties cannot come to an agreement quickly.

It is therefore imperative that the human resource department puts in place a plan to handle such a scenario and come up with a quick solution without causing considerable harm to the companys operations. Outsourcing is becoming quite common in the airline industry, and the human resource department now has the additional task of dealing with private independent contractors.

This includes reviewing bids, setting up contract agreements with the help of the legal department, and working closely with the human resource department of the private contractor to ensure that they are meeting the needs of the airline for which they have been hired.

Motivation by the Human Resource Department

In order to ensure that the airline staff members keep on delivering excellent service, the human resource department must find ways of motivating the employees so that they give their best to the company (Shostack, 1984). The company, through the human resource department, should come up with reward systems that have been shown to be good motivators for employees.

By properly motivating and rewarding highly productive employees, the company will be able to, not only get the best out of them, but to retain them as well. The human resource department must put in place systems for recognizing excellence and general positive performance. These systems must be in line with the companys desired performance outcomes.

The best incentive for getting great performance from employees is to reward those who achieve this. The rewards can be in the form of salary increments, end of year bonuses, equities, holiday offers, awards, flexible working hours, promotions and career development (Singh, 1984). These incentives will bring a sense of satisfaction from the employees if they are implemented professionally in a fair and balanced manner.

Motivation also comes from company awards for excellence and using newsletter designed to motivate the employees. If the companys employees are properly motivated, it will be easier for the company to retain them, and this is good for the stability of the company. It also inspires loyalty from the employees and a sense of identity with the airline company.

The working environment also plays a big role in the motivation of employees. This is evident in the management style adopted by the company (Chan, 2000a). Organizations that use the old hierarchical command and control structure create environments that discourage employees from taking initiative and thus end up performing below par.

This leads to lower customer satisfaction with the airlines services. Companies need to come up with ways of gaining commitment from employees, and they can shape up their culture through better treatment of employees are paying attention to their needs and opinions. These measures can translate into improved productivity among employees and will make them gain a sense of empowerment.

Successful airline companies put a lot of emphasis on clear communication channels between the employees and the top management. Lack of communication is one the major causes of low morale and low job satisfaction. Other causes include lack of respect, pay discrepancies and distrust of management (Chong & Chian, 2007).

The airline company, through its human resource department, should monitor and get feedback on the opinions of their employees and their unions so that they know what is going on and how to solve it before it gets out of hand. Some of the top airline companies regularly survey their employees and unions to get their perceptions and invite ideas on how the company should be run.

Southwest Airlines is known to employ an internal marketing strategy that uses employee focus groups to generate new ideas. The unions are usually encouraged to look into problems and propose solutions to the top management. The company is also known for promoting employee-centered values though a strong emphasis on teamwork, community and serving others.

The employees are made to feel that they are part of a cause, and they feel empowered to really make positive changes at work and to their customers. By making the employees part of the solution, they will feel that their issues and concerns are being addressed appropriately.

If the employees of an airline company are treated well and properly motivated, they will in turn treat the customers better (Chang, Yeong & Loh, 1997). It has been established that they way that employees are treated will determine the quality of service they deliver to customers.

Successful airlines usually pay attention to detail, include their employees in collective decision-making and are open to new ideas. Creating such a working environment for employees will be a big motivational factor that will significantly enhance their productivity and service delivery.

Singapore Airlines

The airline industry has been going through tough times of late. Apart from the industry factors like overcapacity and intense rivalries, airline companies have had to contend with a myriad of socio-economic factors like terrorism concerns, escalating oil prices, the European ash cloud, the Asian tsunami amongst others. All these factors have had a negative impact on profitability, and many airline companies have been posting losses on a regular basis.

The outlook remains bleak, and the industry is usually considered one of the worst performing by many expert analysts (Doganis, 2006). In this environment, Singapore Airlines has stood out as one of the few companies that have continued to perform well by industry standards.

Singapore Airlines has never posted an annual loss, which is very impressive in this volatile industry (Heracleous, Wirtz & Johnston, 2004). This impressive performance is based on excellent service delivery and innovation. The company has positioned itself as a premium carrier and in doing so, puts more emphasis on profitability rather than size.

The use of information technology is one of the main features of the companys plans for increasing efficiency and improving service delivery to customers. The IT functions have been outsourced to IBM and this has brought in the much-needed efficiency.

Singapore Airlines put a lot of emphasis on rigorous service design and development. The company has a service development department that is tasked with designing and testing any changes before they are introduced (Chan, 2000b). The department has to ensure that any service innovation being introduced is fully supported by the relevant procedures. The company values innovation and has integrated it into all its programs.

This innovation takes the form of small but constant increments rather than a radical approach. This way, the company is able to deliver to the customers satisfaction while still remaining cost effective (Clemons, Gu & Spitler, 2002). The Product Innovation Department constantly studies the trends in customer lifestyles and preferences, and gives 3-5 year predictions on what is expected to happen so that the company can tailor its service delivery along those lines.

Singapore Airlines strives to be the leader in coming up with innovations especially those that touch on customer service, and is quick to catch up on any areas that other airline companies have led in like revenue management systems. Any new proposal is put through a thorough cost-benefit analysis before being implemented (Heracleous & Wirtz, 2008).

The company has a reward system for paying bonuses based on how profitable the company has been for that year. The airlines team concept involves the formation of small groups of 13 crewmembers who will work together for at least two years. This enables them to bond and develop a sense of togetherness in their endeavors for excellent service delivery.

The fact that Singapore is located strategically in the middle of Southeast Asia contributed a lot to the success of the airline in terms of operation routes Wirtz & Johnston, 2001). It came up with innovative products and services that quickly put it ahead of the competition in the region and helped in carve a significant market niche.

The company encourages personal initiative and creativity from its employees, with special emphasis on satisfying the needs of the customer. The company values customer feedback and use it to form the basis for customer service delivery and innovations.

Human Resource Management Strategy for 2012-15

For a company that has enjoyed considerable success in the industry, there are several human resource management strategies that can be implemented to ensure that it maintains its excellent reputation and consolidates its position as the best airline in its business niche. The first step should be a thorough analysis of the current business environment for the airline industry and identifying major points like expected challenges, changing trends, competitors strategies and the companys goals and aspirations (Holtbrugge, 2004).

The success of the company means that the strategies put in place are working and should therefore be strengthened and improved. The human resource department should play a significant role in this. First, the company should aim to retain the employees who have been instrumental in bringing its current success. This can be achieved through salary increments, promotions and bonuses at the end of the year.

The employees also need to be more involved in decision-making process and policy formulation so that they feel truly part of the airline family (Ruan, 2006). This being primarily a service industry, the role played by the employees is directly crucial to the success of the company, and if the employees are happy then the customers will get excellent service and the company will perform well.

The recruitment exercise for new employees should be tailored to meet the needs of the company as it prepares to face the next four years or so. This will be based on the strategic plan that has been laid out that aims at consolidating the companys position and image and expanding into new growth areas. The new recruits must be thoroughly trained on the core values that have enabled the company to enjoy such admirable success so far.

For example, the company has done well in cultivating the image of the Singapore girl that is associated with the stewards of the airline. Currently, everyone in the company, including senior management, has a training and development plan with clear goals.

The training should not only focus on functional skills for the industry but also on positive personal and interpersonal skills. Refresher courses are also necessary for the employees to be up to date with the latest innovations in the industry and any new concepts that are aimed at helping the airline perform better.

The human resource department should integrate newer and more efficient technologies into their operations for better service delivery (Costa, Harned & Lundquist, 2002). This also includes training all current and new personnel on how to use the new technologies to enhance service delivery.

The company should also think about diversifying into related areas to help it ensure high quality service delivery on all fronts. Some of these related operations include aircraft maintenance, airport management and catering. By imparting the same business values and strategies on its subsidiaries, Singapore Airlines is able to benefit from the synergy while getting high quality and reliable supportive services.

Despite the success of Singapore Airlines, the company happens to have some strong critics. Most of the critics and competitors point out that much of the success has been realized based on the support of the Singapore government and favorable environmental factors.

The industrial climate in Singapore is considered friendlier than anywhere else in the world, and this has helped the company to implement some policies that would have caused friction for other airlines (Heracleous, Wirtz & Pangarkar, 2008). There have been some less than impressive acquisitions by the company. This is one area that the top management will have to address to minimize on operational costs.

Conclusion

The aviation industry is faced with so many problems, most of which are beyond its control. Some of these problems include the threat of terrorism, rising fuel costs and natural disasters like tsunamis and ash clouds. For an airline company to succeed in such an environment, it must have strong foundations. The human resource department of any airline company is expected to play a significant role in bringing this success.

This involves hiring and training highly competent individuals and imparting in them core success values of the company. The employees also have to be motivated enough so that they serve the company to their best and keep the customers happy. Successful airline companies like Singapore Airlines have strong policies as regards human resource management.

They have various ways of keeping their employees and customers happy. They have also set up strong business structures that guide the success of the company. As they approach the near future in this uncertain industry, Singapore Airlines should concentrate on consolidating its position as market leader in its category by having a highly innovative and efficient human resource department.

References

Chan, D 2000, Air wars in Asia: Competitive and collaborative strategies, Republic of Singapore Air Force, Singapore.

Chan, D 2000, The story of Singapore Airlines and the Singapore Girl, MCB UP Ltd, Singapore.

Chang, ZY, Yeong, WY, & Loh, 1997, Critical success factors for Inflight Catering services: Singapore Airport Terminal Services practices as management benchmarks. The TQM Magazine, Vol 44, pg 32-37.

Chong, M & Chian, L K, 2007,The Role of Internal Communication and Training in Infusing Corporate Values and Delivering Brand Promise: Singapore AirlinesExperience Palgrave Macmillan Ltd, London.

Clemons, E K, Gu, B & Spitler, R 2002, Hyper-Differentiation Strategies: delivering value, retaining profits. Routledge, New York.

Costa, P, Harned, D, Lundquist, J 2002, Rethinking the aviation industry, McKinsey Quarterly, 89100.

Doganis, R 2006, The Airline Business, 2nd edn, Routledge, Abingdon.

Heracleous, L, Wirtz, J & Johnston, R 2004, Cost-effective service excellence: Lessons from Singapore airlines, Business Strategy Review.

Heracleous, L, Wirtz, J & Pangarkar, N 2008, Managing human resources for service excellence and cost effectiveness at Singapore Airlines, Emerald Group Publishing Ltd, Singapore.

Heracleous, L, & Wirtz, J 2008, Strategy and organization at Singapore Airlines:Achieving sustainable advantage through dual strategy, Elsevier Ltd, Singapore.

Holtbrugge, D 2004, Management of International Strategic Business Cooperation:Situational Conditions, Performance Criteria, and Success Factors, Wiley Periodicals Inc, Chicago.

Porter, ME 1985, Competitive Advantage: Creating and sustaining superior Performance, Free Press, New York.

Ruan, B 2006, Singapore Airlines Ltd, Glass Lewis & Co, London.

Singh, K1984, Successful strategies-the story of Singapore airlines(SIA), Pergamon Press Ltd, New Jersey.

Shostack, GL, 1984, Designing services that deliver, Harvard Business Review Vol 62 (1), 133139.

Wirtz, J, & Johnston, R 2001, Singapore airlines: What it takes to sustain service excellence  A senior management perspective, NUS Business School, Singapore.

Executive Summary

Porter Airlines is a new entrant in the Canadian airline industry. The airline uses Toronto City Center Airport (TCCA) as the hub of its operations. During the early years of its existence, Air Canada was Porters major competitor. Porter is the first airline to push Air Canada out of the market. Air Canada currently operates from Lester B.

Pearson International Airport. In the absence of Air Canada, Porter has improved the quality of its services, which has increased the competitiveness of the airline in the market. Porter differentiates its services on the basis of their quality and convenience of the flights. Porter is both the tenant and landlord of terminal and hangar buildings. This enables the company to maximize the efficiency of its operations.

Despite the current success of the airline, it is evident that the future may bring several problems. Future entry of Air Canada can increase competition. In addition, continued development of TCCA lacks political support. Porter relies on the continued development of TCCA for its growth. Therefore, lack of development of the airport hinders the growth of the airline. This necessitates the airline to devise strategies that would enable it to venture into other markets to reduce its overreliance on TCCA.

Venturing into other markets requires the airline to have enough funds to counter competition from airlines that are dominant in the markets. Therefore, the company should launch its IPO, before venturing into other markets. The IPO will provide it with additional capital, which will enable the airline to venture into the markets successfully.

In addition, the airline should use quality and convenience of its flight schedule to differentiate its services. This will make the company able to attract customers in the frequent business traveler segment in the new markets.

Problem Statement

Porter Airlines is a relatively young company. The airline has enjoyed considerable success since its inception. Strategic planning by the companys founder, Robert Deluce, has enabled the company to become successful in areas where other airlines have failed. Porter operates the bulk of its flights from Toronto City Center Airport (TCCA).

Prior to the entry of Porter Airlines into the market, Air Canada was the dominant player in the Canadian market. Air Canada used predatory practices to push out competitors on several occasions. Air Canada had funds to sustain stiff competition from other smaller airlines. The company did not find TCCA as an attractive market. This is the major reason that made Air Canada lose its stranglehold on the airport.

This facilitated Porters entry into the market. However, Air Canada would like to return to the market through its major subsidiary, Air Canada Jazz. This necessitates Porter to brace itself for stiff competition. It is a fact that the competition will reduce Porters profitability. Air Canada will use all its resources to push Porter out of the market.

However, Porter has a competitive advantage that other airlines pushed out of the market by Air Canada did not have. The company has controlling rights on hangar and airport buildings. Porter may use this to improve its competitiveness or restrict the competition from Air Canada. In addition, Porter has funds to enable it to overcome stiff competition from Air Canada.

The size of TCCA restricts Porters expansion. Porter can only fly to locations that are within 500 nautical miles (NM) from TCCA. This restricts the growth of the airline. Therefore, it is critical for the company to start operating flights from other airports. However, achieving such goals, the company will ventur into the market dominated by other airlines.

Porter will face stiff competition from these airlines as they will strive to maintain their market share. This necessitates Porter to use an effective strategy to enter into the markets. In addition, there is a lack of political will for the continued development of the airport. The current mayor runs a successful campaign using cancellation of the proposed bridge as one of his policies. Lack of development of TCCA would restrict the growth of Porter Airlines during a critical stage of its existence.

Situational Analysis

SWOT Analysis

Strengths

Porter Airlines is the first airline which treatens to push Air Canada out of the market. The company has enough resources to survive stiff competition from other airlines that may venture into its domestic market. Availability of funds guarantees the future growth and profitability of the company.

In any industry, it is vital for a company to make drastic decisions to enable it to cope with the changes in the market. Large organizations require board members or shareholders to endorse the decisions of the company. This usually prolongs the decision making period. Porter is a privately owned airline. Therefore, the company can make decisions faster than publicly owned airlines do, as they require the endorsement of the shareholders. This gives the company a competitive edge over publicly owned airlines.

Regco, a company owned by Porters founder, owns the terminal and hangar buildings. This enables Porter to give priority to its customers, control end-to-end experience, and maximize the efficiency of its operations. This provides Porter with a competitive edge over other airlines that may operate in the airport in the future.

Porters employees are not unionized. This implies that the airline pays its employees lower wages, since unionized employees generally demand higher pay. In addition, Porter has lower pilot training and aircraft maintenance than Air Canada does. This is because Porter uses a single aircraft fleet, the Bombardier Q400 turboprop.

Porter has a cost structure that is significantly lower than that of Air Canada and other major airlines. The airline uses secondary airports that have significantly low landing fees. In addition, the airlines planes have quick turnaround times. This ensures that aircraft spend as much time in the air as possible.

In addition, Porter relies heavily on the sale of its tickets via the Internet. This eliminates the costs associated with issuing paper tickets. Reduced operational expenses enable the company to charge low airfares to its employees and remain profitable.

Porter Airlines is a relatively young airline. This enables the airline to buy aircraft using highly advanced technology. However, old airlines usually have old aircraft. Replacing old aircraft with new one is usually very expensive. Porter uses the Bombardier Q400 as the only type of aircraft in its fleet.

Use of the Bombardier Q400 turboprop as its only aircraft gives it a competitive edge over other airlines. This is because the Q400 has low maintenance costs and landing fees. In addition, the Q400 uses highly advanced technology that improves comfort and fuel efficiency. The Q400 has an Active Noise and Vibration Suppression (ANVS) system that reduces the noise in the aircraft. This improves the comfort of the passengers.

In addition, use of advanced technology makes the Q400 have a fuel consumption rate that is 30 to 40% lower fuel that other aircraft of comparable size. These features of the Q400 give Porter Airlines a competitive edge over other airlines that use other types of aircraft. In addition, Porter has an agreement with Bombardier Q400 which enables it to acquire 10 more Q400s at a fixed price.

Porters founder, Robert Deluce, is a veteran in the aviation industry. Therefore, he has a clear understanding of the activities in the airline industry. Deluce may use his experience in the aviation industry to improve the competitiveness of the company. In addition, the airline has an experienced management team. This gives Porter a competitive edge over other airlines in the industry.

Weaknesses

Porter uses only the Bombardier Q400 turboprop. Using only the Q400 makes the airline fail to benefit from advanced technology in other types of aircraft. In addition, using only the Q400 exposes the company to high risks where competitors should use seat capacity in creating a competitive edge.

This is because the Q400 is a relatively small aircraft with a capacity of only 70 passengers. Air Canada has used flooding the market with excess seat capacity to push competitors out of the market in the past. Therefore, Air Canada may use the same strategy to push Porter Airlines out of the market since it has different types and sizes of aircraft. This necessitates the airline to have a graet variety in its fleet of aircraft.

Porter is a relatively young airline. Therefore, it is does not have enough resources to compete with other companies that have been in the industry for a long time. Therefore, airlines, such as Air Canada, may use predatory prices to push Porter out of the market.

Opportunities

Porter currently operates only from TCCA. The airline has enough resources to enable it to venture into other markets. The airline may start operating some flights based out of Toronto. This would lead to significant growth of the airline.

US market is one of the most lucrative airline markets in the world. The company may venture into various US cities that are 500 NM from its hub in TCCA. Porter intends to add US customs pre-clearance during the next phase of TCCA expansion. This would provide Porter access to various secondary domestic airports in the US. These airports include LaGuardia and Reagan. This would improve profitability of the airline significantly.

Porter has a fleet of 17 Bombardier Q400 turboprop planes. This is a small number of aircraft for an airline that already commands a sizeable percentage of the market share. Therefore, the airline has a high potential for growth in the future. Steady growth in the company can lead to a significant increase in the number of aircraft that the company operates. This will increase the number of passengers, flights, and profitability of the company.

Porter Airlines is still a privately owned airline. This provides the airline with a huge potential form of capital if it launches an Initial Public Offer (IPO) in the future. The IPO will provide the airline with more capital for expansion into other cities.

Future expansion of TCCA will provide the airport with an opportunity to grow. This is because Toronto is more easily accessible than Lester B. Pearson International Airport. This would greatly benefit Porter as it is the major airline in TCCA.

Threats

Porters main business hub is TCCA. However, the airport faces several problems. Politicians are against the continued development of the airport. The mayor of the city of Toronto has claimed that continued development of the airport would lead to disruption of the peaceful life of the residents of Toronto. In fact, the mayor has used cancelation of construction of the bridge connecting the Toronto Island with the mainland to run a successful election campaign.

The success of the mayors campaign shows that people object to the continued development of the airport. Lack of political will might hinder the development of the airport. Porter depends on the development of TCCA for its growth. Therefore, lack of development of the airport will hinder the development of the airline.

The airport has faced the risk of going bankrupt in the past. Bankruptcy of the airport can be detrimental to Porter. This is because the airline has interests in the airports terminal and hangar buildings. Bankruptcy of TCCA may lead to the ultimate collapse of Porter Airlines.

Competition Analysis

The airline industry is a capital-intensive industry. Availability of capital enables airlines to effectively compete. An airline may compete on several aspects. An airline may use price, quality of its services, and convenient flight times to benefit in the industry. Air Canada is the dominant airline in the industry.

The airline has a market share of 55%. The airline uses its huge market share and availability of resources to compete with other airlines. These factors enable the airline to engage in lengthy price wars with other airlines in the industry. The airline floods the market with excess seat capacity to push its competitors out of the market.

The company has successfully used this strategy to counter stiff competitions from other airlines in the past. In addition, the company uses its huge resources to buy out its competitors. This has made the airline maintain a monopolistic stranglehold on the market, as well as this fact necessitates Porter to take strategic steps to prevent it from being pushed out of the market by Air Canada.

There are several types of customers in the market. The frequent business traveler is one of the most profitable market segments. This is because frequent business travelers are time sensitive and often book at the last instances. Porter has high frequency flights, which are attractive to a frequent business traveler.

However, operating frequency flights may reduce the passenger load capacity of Porter Airlines. Having a high load capacity is one of the major factors that increase the profitability of te company. However, it is extremely difficult to achieve a load capacity of 100% because travelers may cancel their flights. In addition, tendency to book at the last minute reduces the probability of the airlines to have full capacity.

In this market segment, reduction in the frequency of flights may reduce the competitiveness of an airline. Quality of services is one of the major factors that companies use to attract more customers in this market segment. Porter has successfully been able to play in this market. The size and comfort of its aircraft give the company a competitive edge to win over customers in this market segment.

Strategy Formulation

It is evident that the entry of other airlines into TCCA will greatly increase competition facing Porter. This necessitates Porter to formulate a strategy that will enable it to counter the stiff competition. Entry of other airlines into TCCA, which is the main hub of Porters operations, will lead to a significant reduction in Porters profitability. Air Canada may flood the market with excess seat capacity to push Porter out of the market.

Therefore, Porter should ensure that it improves the quality of its services. Improvement in the quality of services would enable the company to retain its existing customers. Air Canada may not be able to compete with Porter on the basis quality of services. There is a high probability that Air Canada will use predatory prices to enhance its competitiveness.

This strategy will not be effective since Porter mainly targets the frequent business traveler segment. In this market segment, quality and convenience of the flights are the major factors that influence the competitiveness of an airline. Therefore, Porter should ensure that it improves the quality of its services. However, focus on this market segment will make the airlines lose their customers in other market segments.

It is vital for Porter Airline to venture into other markets. Operating from only TCCA poses great risks to the company if Air Canada uses its power to push Porter out of the market. The airline should start operating flights from other airports. However, Porter will face stiff competition from other airlines that are dominant in the markets. The quality of the services has enabled Porter to conquer the market.

Therefore, Porter should use quality and convenience of its flight schedule to differentiate itself from its competitors. Successful entry into other markets will improve the image of the company. Porter should launch its IPO, before venturing into other markets. This will provide the airline with funds for continued expansion.

Implementation

Porter should take strategic steps to ensure that the entry of Air Canada into the market does not threaten its market position. The company should run extensive advertising campaigns aimed at making the customer view Air Canada as a monopoly that is not sensitive to the needs of its customers. In addition, Porter should run advertising campaigns that portray the airline as a local company. These advertising campaigns are an extra expense to the company. However, Porter has enough funds to enable it to run those campaigns.

Porter should put emphasis on the quality of its services. Therefore, the airline should undertake a survey to determine areas that need improvement. The company may use feedback from customers to determine areas that need improvement. These measures will enhance the image of the airline. They would enable the company to counter competition from Air Canada or other airlines that may be willing to venture into Porters domestic market.

Successful venture into other markets requires Air Canada to have enough funds. However, Porter poses enough funds to enter into other markets. The airline should use quality and convenience of its flights schedule to differentiate its services. The company should launch its IPO before venturing into other markets.

The airline should use the publicity generated from the IPO to launch venture into other markets. Therefore, the IPO is a critical factor that will determine the future growth of the airline. The IPO will provide Porter with funds and publicity that will enable it to successfully operate in other markets. In addition, the IPO will provide it with funds to buy additional aircraft.