Maintenance of Aviation Safety Action Programs Order Instructions: Kindly view attached. Research proposal for Maintenance of Aviation Safety Action Programs Sample Answer
EAU Business School
Dissertation Details
Dissertation Title: Maintenance Aviation Safety Action Programs at Dubai World Central Airport
Maintenance of Aviation Safety Action Programs Proposal Summary
Maintenance as well as aviation safety programs are implemented for the purpose of encouraging maintenance station and air carrier employees to voluntarily forward reports on errors, a practice which is fundamental in making sure there is identification of potential causes of accidents and/or incidents.
Maintenance of Aviation Safety Action Programs
Under aviation safety programs, proactive action is taken to resolve safety issues rather than by disciplining or punishment the concerned individuals. As a result, these programs are aimed at enhancing aviation safety mainly by preventing incidents and accidents both at the airport as well as air carriers by focusing on encouraging compliance to the safety issues’ reporting voluntarily.
For instance, the introduction of Aviation Safety Action Programs (ASAPs) in the flight domain within the aviation industry was encouraged by the hope of motivating pilots towards disclosing their errors, and also of significance reporting the factors that may have contributed to the errors. Thus, keeping a record of these reports may help in the implementation of systemic solutions in order to preclude recurrence. Generally, the air carriers can significantly benefit from their maintenance and/or safety programs, which can be essential in addressing the identified systemic discrepancies that could have otherwise resulted to detrimental effects if left unresolved.
Maintenance and safety play a significant role in maintaining airline fleets throughout the world through appropriate ASAPs. ASAPs provide a blanket term for all the services that relate to assuring the safety and airworthy of aircraft. Ayeni et al (2011) noted that the global market worth of the ASAPs market is $50 billion. ASAPs providers and implementers typically provide four main capabilities: Engine, Airframe, Airport, as well as Component Services. Dubai World Center (DWC) is located at Dubai City. The airport opened first as a cargo operations center but later opened for passengers handling services and flights in 2013. The airport is touted as the next world’s largest global gateway due to its capacity of more than 160 million passengers every year. For this reason, many airlines will operate from the airport and this will necessitate the need for maintenance and repair organization, which must be accompanied by appropriate safety programs. Air transport, cargo operators, and airlines operate schedules that require high utilization and serviceability levels and minimum cost. Since they have high capital and utilization costs, they require a large amount of support by the ASAPs. The airlines operate large fleets of aircraft, and since many of their aircraft are on the lease, they require that they have high maintenance so that they can maximize their value in agreement with the requirements of the lesser. This paper explores the feasibility of ASAPs in DWC.
The United Arab Emirates has four airlines operating from various countries such as the Emirates airline & Fly Dubai operating from Dubai International Airport, Etihad operating from Abu Dhabi International Airport as well as Air Arabia operating from Sharjah International Airport. All of these airlines operate fleets of varied aircrafts ranging from Airbus A330 to heavy duty and new generation Boeings B800; whereby the number of aircrafts owned by Emirates Airline, Fly Dubai, and Etihad are 260, 49 and 122 respectively. The management of ASAPs by these airlines is either in-house or through outsourcing. For example, Emirates and Etihad accomplish maintenance of their fleet and management of ASAPs at their facility; whereas Air Arabia outsources this from Joramco in Jordan, Amman. In addition, Fly Dubai outsources aircraft maintenance and management of ASAPs from ADAT in Abu Dhabi.
Maintenance of Aviation Safety Action Programs Literature Review
Objectives
The primary objectives of this study include:
To investigate the impacts of establishing maintenance aviation safety action programs at Dubai World Central Airport.
To explore the services and functions to be offered by the maintenance aviation safety action programs at Dubai World Central Airport.
To recognize key factors that will encourage global airliners to embrace the appropriate fleet maintenance aviation safety action programs at Dubai World Central Airport.
To establish the internal and external factors that impact maintenance Aviation Safety Action Programs (ASAPs) at Dubai World Central Airport.
To establish appropriate recommendations and conclusions which identify approaches of solving the negative impacts of these factors on maintenance Aviation Safety Action Programs (ASAPs) at Dubai World Central Airport.
It is essential to determine that the maintenance Aviation Safety Action Programs are an imperative approach in the process of making sure that there is seamless running of operations at an airport whether locally, regionally or internationally recognized, which can influence the goals stipulated by the respective airports negatively or positively. In this case, the maintenance Aviation Safety Action Programs can be impacted by a number of components in a work environment due to the vital role they play in ensuring airport operations take place without incidences or accidents that can possibly translate to significant levels of losses. The aim of this study therefore, is to draw a focus on some of the programs established by Dubai World Central Airport with regards to maintenance and aviation safety action. In particular, this study will make sure that some of the variables affecting the maintenance and aviation safety action both internally and externally are succinctly detailed.
As a result, this paper proposes establishing maintenance aviation safety action programs at Dubai Central airport including safety equipment such as escape slide rafts and life jackets, among others. In addition, the study will also consider the safety maintenance operations at the aircraft structural repair workshop, brakes, and wheels overhaul workshop, engine module replacement facility as well as Non-Destructive Test facility. Therefore, considering that Dubai World Central Airport present operations are within a limited number of airlines, the ongoing plans to ensure that it is converted to multi runways operation makes it essential to prioritize maintenance and safety programs. This is attributable to the fact that, the major infrastructural development plans envisaged to take place in the near future will require ambitious as well as comprehensive maintenance aviation safety action programs.
Maintenance of Aviation Safety Action Programs Project Outcomes
Why are you interested in the project?
The reason why am interested in this project is because, it has always been my dream to ensure that air transportation becomes safe by significantly reducing accidents and incidents both at the airports and airplanes through establishment of reliable and effective maintenance and aviation safety action programs. In addition, professional curiosity that is primarily business-oriented has also attracted by attention towards undertaking a study on this crucial topic. For instance, an observation of the huge infrastructural investments made by airports as well as airlines managements, I found it worthy to embark on this study to establish if maintenance and safety action programs put in place are sufficiently enough to ensure safety of commuters, airport infrastructure and the airplanes. The desire to evaluate if the current maintenance and safety programs are economically viable was also another factor that motivated my interest in this project, especially considering that airplanes which have been developed in the recent past are technologically advanced meaning investment in their maintenance and safety resources has also grown significantly higher. Furthermore, my thoughts and interest in this project were substantially influenced by the training from MBA studies, which has pushed my desire to carry out an in-depth analysis of this subject.
What are the key questions the project attempts to answer?
What are the internal factors that affect maintenance Aviation Safety Action Programs (ASAPs) at Dubai World Central Airport?
What are the external factors that maintenance Aviation Safety Action Programs (ASAPs) at Dubai World Central Airport?
What are the approaches that can be employed in solving the internal and external factors that affect the maintenance Aviation Safety Action Programs (ASAPs) at Dubai World Central Airport?
What Research Methods do you intend to use?
This means that the qualitative data required for this study will be gathered primarily from the randomly selected research participants through a survey. As a result, survey will be conducted through self-administered questionnaires to aide gathering information from airlines and airport personnel based at Dubai World Central airport with regards to maintenance and safety action programs currently in use as well as those envisaged to be implemented in future. The responses obtained from randomly selected research participants questionnaires will then be used as the primary data for this project. Alternatively, the secondary data will primarily be collected from online sources and databases (Ghauri and Grønhaug, 2005). For instance, data concerning the present maintenance and safety and the extent of action programs adopted by the airport as well as various airlines will be established by reviewing literature from secondary sources.
What primary and/or secondary data sources do you intend to use for Maintenance of Aviation Safety Action Programs?
In order to ensure that the research is appropriately carried out and the findings or results are credible and reliable, it is important to make sure that valid and unbiased sources of data are used. As a result, in this project I am planning to use both primary and secondary sources of data. Therefore, am planning a direct administration of questionnaires [directly as well as via e-mails] to current administrators of maintenance aviation safety action programs, airlines executives based at the airport, aviation consultants and regulatory body executives, safety personnel as well as representatives of aircraft manufacturers in order to collect qualitative and quantitative data for this study. The questionnaires with a set of questions will be forwarded to the randomly selected participants followed by structured interviews and email follow-ups to allow collection of valid and reliable data. Furthermore, I plan to physically visit the case study airport in order to interact and interview maintenance and safety programs’ administrators or managers through arranged focus group discussions so that I can get first-hand view of the subject. This will be achieved by conducting informal interviews as well as holding discussions with relevant personnel concerning day-to-day maintenance and safety action programs during my visit.
Please provide draft chapter heading for your report on Maintenance of Aviation Safety Action Programs
Abbreviations
Abstract
Introduction
Objectives
Research methodology
Literature review
Data analysis
Conclusions
Recommendations
List of references
Appendix
Plan
Milestone
Description
Due date
Remarks
1
Identification of the research area of interest
September 01, 2016
completed
2
Selection of a specific research topic
September 10, 2016
completed
3
Refining the research topic to develop dissertation proposal
September 10, 2016
completed
4
Writing of the dissertation proposal and submitting for approval
September 15, 2016
In progress
5
Collection of research data and information
November 01, 2016
6
Processing, analysis as well as interpretation of collected information or data
December 20, 2016
7
Writing up the dissertation
February 01, 2017
8
Preparation of the final draft of the dissertation and submission for assessment
March 01, 2017
Maintenance of Aviation Safety Action Programs List of References
Ait-Kadi, D., Duffuaa, S.O., Knezevic, J., & Raouf, A. (2009). Handbook of maintenance management and engineering. London: Springer.
Ayeni, P., Baines, T.S., Lightfoot, H., & Ball, P. (2011). State-of-the-art of ‘Lean’ in the aviation maintenance, repairs, and overhaul industry. Proceedings of the Institution of Mechanical Engineers, Part B: Journal of Engineering Manufacture, p.0954405411407122.
Cameron, S. (2008). The MBA Handbook: skills for mastering management. London: Pearson Education.
Easterby-Smith, M., Thorpe, R., & Jackson, P.R. (2012). Management research. Thousand Oaks, NJ: Sage.
Endsley, M.R. & Robertson, M.M. (2000). Situation awareness in aircraft maintenance teams. International Journal of Industrial Ergonomics, 26(2), 301-325.
Ghauri, P.N. & Grønhaug, K. (2005). Research methods in business studies: A practical guide. New York, NY: Pearson Education.
Goddard, W. & Melville, S. (2004). Research methodology: An introduction. London, UK: Juta and Company Ltd.
Graham, S. & Thrift, N. (2007). Out of order understanding repair and maintenance. Theory, Culture & Society, 24(3), 1-25.
Jankowicz, A D. (2004). Business Research Projects, (4th ed.). New York, NY: Thomson Learning.
Saunders, M., Lewis, P., & Thornhill, A. (2012). Research Methods for Business Students, (6th ed.). New York, NY: FT Prentice.
Peters, M.J., Howard, K., & Sharp, M.J.A. (2012). The management of a student research project. London: Gower Publishing, Ltd.
Robson, C. (2011). Real World Research: A Resource for Social Scientists and Practitioner Researchers. New York, NY: Blackwell Publishing.
Ross, W.A. (2003). September. The impact of next generation test technology on aviation maintenance. In AUTOTESTCON 2003. IEEE Systems Readiness Technology Conference. Proceedings. IEEE.
Physical Design and Capacity Limitations in Airport Operations Order Instructions: Airport Operations
Assignment
“One city, six airports.
Heathrow, Gatwick, Stansted, Luton, City & Southend.”
Design and Capacity Limitations in Airport Operations
Assessed against the following learning outcomes:
1. Critically assess the consequences of physical design and capacity limitations for an airport. London City.
2. Critically assess the strategy of a city with six airports. London airports: Heathrow, Gatwick, Stansted, Luton, City & Southend.
3. Confirm or propose an alternative strategy London as a city and its airports.
Word Count: – 3000 to 4000 words
Design and Capacity Limitations in Airport Operations Marking criteria
The student must show a good knowledge of the air transport industry from the airports perspective. This exercise will be conducted using one city, London, and its six airports, Heathrow (LHR), Gatwick (LGW), Stansted (STN), Luton (LTN), City (LCY) & Southend (SEN).
The students should deliver their personal analysis supported by data at least about the following aspects:
1. Airport facilities and design of London City airport.
2. Airlines operating from the six airports.
3. Destinations served from the six airports.
4. Access from the catchment area.
5. Connectivity at the airports.
6. Strengths and weaknesses of operating six airports in one city.
7. London as a destination and connecting point in the air transport industry. (In the United Kingdom and from a regional and global perspective).
The following elements will be assessed:
• A clear understanding and complete analysis of the topic (given the length/scope of the assignment).
• The originality of ideas and expression.
• Appropriate evidence of reading and research.
10 Outstanding • Original ideas well developed, relevant, and thoroughly supported
• Analysis complete
• Ideas and expressions original
• Evidence of reading and research apparent (where appropriate)
• Perceptive insights
• Text interesting
9 Excellent • Topic coverage complete
• Appropriate elements achieved to a high degree
• Many ideas and expressions original
• Some evidence of research (where appropriate)
• Text interesting and shows promise
8 Very good • Topic coverage mainly complete
• Most elements completed well
7 Good • Topic coverage nearly complete—minor omissions only
• Analysis weak in places
6 Satisfactory • Topic coverage basic
• Evidence of some analysis
5 Sufficient—improvement needed • Topic coverage just adequate
• Other elements present at a basic level
• Minor omissions in some elements
4 Insufficient—remediation suggested • Topic coverage inadequate
• Analysis lacking
• Text uninteresting
• Omissions in several elements
3
Unsatisfactory—remedial work needed • Intent of the writing difficult to understand
• Omissions in most elements
2 • Text unfocussed and confusing
• Major omissions in all elements
1 • Off-topic
• Complete lack of audience awareness
• Text unfocussed and confusing
The organization of the document should include a clear thesis statement, a variety of effective transitions to make the writing ‘flow’, appropriate and logical structure both within the assignment as a whole and within the paragraph. Good main ideas should be at the paragraph level. An introduction, development and conclusion structure should be used.
The spelling must be correct and consistent in usage. Punctuation, correct, consistent and with the appropriate variety
Design and Capacity Limitations in Airport Operations Sample Answer
The highly competitive market has brought about new thinking in the airport industry. To remain relevant and ensure exponential growth, airports have been compelled to undergo structural transformation through privatization. In the past ten years, for instance, the management of the airport has faced remarkable changes that have affected international financial performance while elevating the economic condition of the sector. This paper presents an analysis of 6 airports in London City. It sets out to evaluate not just the strategic plan implemented by London City’s airports but also the strategic options and techniques. In the end, the paper recommends alternative options for sustainable growth.
Part one
This section looks at the impacts of physical design as well as capacity restrictions of London City Airport. In addition, part one presents a detailed discussion regarding passenger profile, facilities within the airport, and limitations of the airport due to its design and capacity.
The London City airport
This is the city airport located at the Royal Docks. According to London City Airport (2013), the airport is located in London City, the main financial district of Europe and London’s business hub based in the Docklands. It also acts as the niche market. Again, this airport is owned by Global Infrastructure Partners and Highstar Capital that controls 75% and 25% respectively. London City Airport is preferred by many travelers not only due to accessibility but also because of its efficient, easy and fast. Conversely, it plays a major role when it comes to business output and inward investment. For instance, on a yearly basis, it contributes approximately ₤750 million to the economy of UK (Greater London Authority, 2013). Besides, it is the most prompt airport across the UK. Consequently, the airport was recognized the “Airport of the Year” in the category of serving less than ten million clients yearly (BBC, 2013).
Design and Capacity Limitations in Airport Operations and the Passenger profile
Three years ago, the airport served about 3.3 million passengers and handled roughly 74,000 aircraft schedules. In many instances, the airport provides point-to-point services, whereby passengers prefer global flights due to business purposes (London City Airport, 2013). The pie charts below illustrate the distribution of passengers based on gender, age, a goal of traveling and the type of service chosen by travelers.
Figure 1. TraTravelersofile with respect to age at City Airport
Figure 2. Travellers profile with respect to gender at City Airport
Figure 3. Travellers profile with respect to the aim of travelling to City Airport
Figure 4. Passenger traffic based on the type of service
London City Airport facilities
The airport provides a wide range of facilities to increase the travel experience of customers. Furthermore, the airport provides business class facilities to passengers accompanied with free Wi-Fi and internet connectivity (London City Airport, 2014). Again, London City Airport offers other facilities and services including;
Left and lost luggage services
Care hire
Restaurants and bars
Currency points such as ATM services and currency exchange
Parking areas on the eastern part of the airport, which provides short term and long term stay for about nine hundred cars. Passengers also have the opportunity to pre-book parking space.
Physical design and capacity
London City Airport comprises of different structures, for instance;
The airport has one runway covering 1508 meters long and surrounded by King George V Dock and the Royal Albert Dock with the ability to handle majority of business aircrafts.
Terminal and JET Centre, a business aviation situated on western part of the airport.
Fire station and ground handling services
Apron
Maintenance
Other facilities such as operational areas
The terminals consists of travellers self-service centers of Air France, SAS and British Airways, security areas, baggage claim section, custom and business sections. Owing to the fact that London City Airport is compact, it gives room to not just arrivals but also effective and easier departures in comparison to other airports across London. Moreover, the airport has two traveller piers, which connect the terminal to different stands. A scheduled aircraft has approximately 17 stands; the pier on the west accommodates stands 1 to 10 while those on the east handle 21to 24 stands (Full Fact, 2013). Nonetheless, buses serve stands nearer to the terminal. Much as London City Airport has various physical designs, it also has some drawbacks;
The 1508 meter runway is short; therefore, it is not in position to handle huge and wide aircrafts. The biggest jets, London City Airport can accommodate are small and narrow body like airbus A318.
According to New Economic Foundation (2014) there are cases to close the operations of London City Airport, which may negatively influence its expansion and potential growth.
London City Airport is located on a constrained area as well as limited infrastructure that hinder its ability to meet the increasing demand for air travel in turn constrains capacity.
The capacity of any given airport is described based on the restrictions imposed by the size of the runway, airspace and terminal. With respect to the current approximations, London City Airport would be at 100 percent- operating capacity in 2024 (Full Fact, 2013). The airport has anticipated these constraints due to its physical design as well as capacity. To fulfill the increasing capacity while enhancing demand for air travel, the airport has designed a 2030 Master Plan that revolves around planning and also developing its future expansion. Moreover, the airport has developed “The City Airport Development Plan”, a planning submission for new airspace infrastructure and extended traveller facilities. The airport also purposes to enhance its performance without negatively affecting the environment. Thus, the planning submission consists of; comprehensive terminal structure; equivalent to taxi lane; and new airplane stand and pier leeway.
Part 2
This part presents London’s strategy of multi-airport structure. In addition, this part provides a detailed analysis of how traffic is distributed in the six airports, rout networks, connection, surface movement and strategy assessment.
Strategic choices
Competitive assessment of the aviation sector is associated with the degree of influence airport operators have on price and product features. For that reason, it is necessary to evaluate and develop strategic options to gain competitiveness. Consequently, airport operators pursue strategic choices in accordance with Porter’s strategies such as
Cost leadership that focuses on low operation expenses
Differentiation that involves creating unique products or services and also attractive than their rivals
Niche, which entails concentrating on a certain target audience or market
London Heathrow airport
This is UK’s center and the main airport located in the suburbs of western London. Additionally, Heathrow airport is owned by Heathrow Airport Holdings. London Heathrow airport is preferred owing to the myriad international connections it offers. In 2014, Heathrow airport was recognized by Skytrax as the “best airport for shopping”. On the other hand, in 2013 it was recognized through the ACI Europe Awards, as the best airport with respect to terminal 5. Currently, London Heathrow airport has 5 terminals with 2 runways and 3rd busiest globally (LHR Airports, 2014). However, the main challenge the airport is facing is inadequate runway capacity that is adversely affecting its operations because it might lose demand for air movements to other centers across Europe. While this has contributed to suggestions for the expansion of the London Heathrow airport, it has often been halted due to political and environmental constrictions. Subsequently, the airport utilizes differentiation tactic through provision of improved products. The distinctiveness of London Heathrow airport is based on its capability to offer customized services to various types of clients and its 5 terminals, for example;
Terminal 1 focuses on local flights
Terminal 3 concentrates on long-haul flights to United States, Asia and South America
Terminal 4 focuses on flights to Europe and long haul flights. In fact, at the moment it accommodates SkyTeam alliance
Terminal 5 is used by Iberia and British Airways
Some of the strategic priorities of London Heathrow airport include; launch terminal 2 operations; transforming the airport under a strong settlement; and plan and develop the airport for future expansion.
Passenger profile
The airport serves about 72m travellers yearly while remaining the center for long-haul terminus. About three quarters of United Kingdom’s long haul destinations are easily accessible through the London Heathrow airport.
Destinations
Whereas the airport accommodates approximately 180 destinations, New York, Amsterdam, Dublin, and Frankfurt are London Heathrow airport’s major destination. Heathrow airport is mainly controlled by British Airways. Furthermore, London Heathrow airport is the main center for British Airways and Virgin Atlantic’s main operating surface. Besides, major airlines that operate from Heathrow airport include Delta, American and Air Canada.
Access to London Heathrow airport
The airport’s catchment area is based in the central regions of London such as regions in the western as well as north-western London. It is about fifteen miles from central London and easily accessible through coaches, buses and trains.
Gatwick airport
This is the second biggest airport in United Kingdom located in Crawley, western parts of Sussex. In addition, it is controlled by Gatwick Limited. Actually, this airport is more popular in comparison to Heathrow. In 2013 during The National Transport Award, Gatwick airport was recognized as the “Airport of the Year”. In the year, in the British Parking Awards, Gatwick airport was bestowed as the “Exceptional Customer Service” and “Best UK Airport” in the Business Travel Awards (Full Fact, 2013).
Gatwick airport has 2 terminals and 2 runways while operating as one runway airport. The airport has an operation capacity of 95 percent and the busiest and one runway globally. Nonetheless, insufficient runway capacity is a main problem that can influence Gatwick’s future development. Like Heathrow airport, Gatwick employs differentiation approach to provide unique services for charter as well as scheduled flights. Additionally, Gatwick airport has integrated cost tactic following the development of cheap carriers (Gatwick Airport, 2014). Gatwick has a number of strategic priorities such as;
Improve efficiency and service value by genrating maximum returns at reduced operational expenses.
Gain competitive advantage while substituting Stansted and Heathrow airports’ services to become London’s preferred airport
Expanding its business travel in developing markets
Passenger profile
Gatwick airport provides a scheduled full-service, low-cost and charter services and serves roughly 35 m travellers yearly. In addition, this airport provides point-point services, while about a third of its clients travel to short-haul terminus primarily for leisure activities.
Gatwick airport’s destinations
This airport offers flight services to approximately 240 terminuses in more than 90 nations. In addition, the airport serves more destinations in comparison to Heathrow airport especially in Continental Europe. Gatwick’s main destinations include Dublin, Amsterdam, Geneva and Barcelona. It is also controlled by roughly 60 airlines whereas Easyjet is its biggest carrier and British Airways. Additionally, Gatwick is the main center for low-cost flights such as Flybe (Gatwick Airport, 2013).
Accessibility to Gatwick airport
The catchment regions of Gatwick airport are central and southern parts of London especially, Kent, Surrey and Sussex. It is about 28 miles south of London and it is adequately linked to public transport systems. The airport initiative to attaining sustainbale services, it is enhancing the quality of surface transportation networks. It has also launched 2012-2030 Airport Surface Access strategy to offer suitable transportation systems
London Stansted Airport
This airport is the third biggest airport in London and it is based in Essex. The Stansted airport is owned and controlled by Manchester Airports Group. In 2011 to 2014 in the World Airport Awards, Stansted airport was bestowed as the “Best Airport” in the low-cost category. It has 1 terminal with one runway covering 10,000 feet, which gives it the ability to accommodate large aircrafts. Since it has extra capacity, it has the ability to accommodate approximately 40 m travellers yearly (Stansted Airport, 2013). The airport uses cost strategy, which allows it to offer cost-efficient flight services particularly with low-cost carriers. This contributed to a significant number of low-cost carriers.
Passenger profile
Stansted airport provides not only charter but also scheduled services and serves about 18m travellers yearly. Additionally, the airport primarily focuses on short-haul destination for leisure activities in the low-cost category.
Stansted destinations
The airport caters for more than 150 destinations within United Kingdom and Europe. Some of its main destination includes Malaga, Belfast, Rome and Alicante. In addition, it operates 14 airlines while Ryanair is its primary carrier and EasyJet. Again, it is the operating hub for larger European budget carriers. Other major airlines that operate from this airport include Air Berlin, and German wings. In 2014, Thomas Cook Airline signed an agreement with Stansted to provide eight destinations (Stansted Airport, 2014).
Accessing Stansted airport
Its major catchment region is London and expands to north eastern from central parts. In addition, the catchment area is controlled by East Anglia and Westminster. The airport’s target market extends to several parts of Midlands while low market covers west and southern parts of London. It roughly 30 miles from central London that makes it accessible by rail or road.
London Luton airport
It is the fourth largest airport in London located in Bedfordshire. It is also controlled by London Luton Airport Operations Limited. Moreover, the airport has 1 terminal and 1 runway working at a capacity of 60 percent (London Luton Airport, 2014). Nevertheless, the terminal has been differentiated in to 2 levels, for departures and arrivals. Initially, Luton airport used the strategy of offering various flight services, but it now concentrates on budget carrier services. The airport is mainly controlled by budget airlines, and it is the operational centre for EasyJet.
Passenger profile
Luton airport provides charter as well as scheduled services to about 9.7 m travellers yearly. Furthermore, the airport focuses on budget services for medium as well as short-haul destinations.
Luton airport’s destinations
The airport offers charter and scheduled flight services to more than 100 terminuses in UK, African, Europe and Middle East. Luton airport’s main destinations include Dublin, Amsterdam, Budapest and Warsaw. Subsequently, it operates nine airlines while Easyjet and Wizz Air are its biggest carriers. Other airlines operating from Luton airport include Blue Air, Atlasjet, Thomson airlines and so forth (London Luton Airport, 2012).
Access
Its catchment area is based in the northern part of London and regions in East Midland. The catchment area is dominated by Hertfordshire, Buckinghamshire and Greater London. The airport is about 35 miles from central London therefore; it can be accessed by buses, rail and coaches.
London City Airport
This is the United Kingdom’s main business airport. It offers flight services to short-haul destinations especially, the Europe. City airport’s tactic is meeting the requirements of business clients; this is because it is close to London’s financial centre, city and Canary Wharf.
Destinations
The airport serves roughly 50 destinations within UK, United Sates and Europe. Some of the airlines that operate from this airport include CityFlyers, British Airways, City Jet, Blue Islands and Aer Arann. Consequently, Flybe signed an agreement with City airport to provide flight services to Dublin, Belfast and Edinburg (BBC, 2014).
Access to City Airport
The city airport catchment region is in central parts of London. A number of air movements are concentrated in south east England such as Tower Hamlet, London City, and Docklands. The airport is located in the centre of the city, thus, well linked by underground buses, coaches and railway.
London Southend airport
This is not only a new entity but also cost-effective airport that is located in Essex. In addition, Southend is controlled and managed by Stobart Group. In 2013, Southend airport was recognized the “Best Airport across UK and also received the European Regions Airline Association. Southend airport underwent an expansion phase with additional terminal, train station, runway and control tower (London Southend Airport, 2014). The airport has the ability to accommodate big airliners with additional capacity to serve about five million travellers yearly. Its main carrier is EasyJet, a low budget airline. The introduction of budget carriers contributed to significant growth in air movement at the airport. This airport uses cost strategy whereby it offers services at competitive charges, which has in turn contributed to future expansion.
Passenger profile
The airport provides charter, scheduled and corporate flight services. On the contrary, it serves approximately 1 million travellers yearly.
Destinations
The Southend airport is dominated by EasyJet and Aer Lingus Regional. In addition, this airport serves fifteen destinations in Europe and United Kingdom. Its main carrier is EasyJet, which serves fourteen destinations including Barcelona, Berlin, Alicante while Aer Lingus Regional serves Dublin. In 2014, Sourthend and Flybe airlines signed an agreement to provide flight services to 6 additional destinations (London Southend Airport, 2014).
Accessibility
The catchment area for Southend is based in Central London and Essex, and regions in the southern part of London. A number of travellers access the airport by road and railway. In addition, it has direct rail connecting Liverpool and Stratford (London Southend Airport, 2013).
Part 3
This part presents an analysis of for strategy for the six airports in London put into account the future growth of air movement.
Multi-airport Structure
This form of system is common in metropolitan setting because it is associated with a significant degree of traveller traffic and airlines. In some cases, it is related to overlapping catchment regions. London’s multi-airport structure caters for airline traffic and the people of London. Again, in Europe, London has a high number of airports to meet the needs of different customers. Moreover, his structure is effective for London since the airports’ strategic plan to cater for a certain metropolitan region increases not only revenue but also efficiency. Other benefits of multi-airport structure include;
Reducing traffic in major airports, especially Gatwick and Heathrow
Offer extra capacity to secondary airports such as City, Luton, Southend and Stansted
Helps in effective management of air movement and navigation
Increases efficiency , operation while maximizing operational strength
Generate revenue while providing social growth of a particular region
However, London multi-airport system contributes to congestion, thus in scenarios where traffic converges it becomes intricate to manage traffic. It also leads to market segregation that in turn leads to increased operational expenses per client. For that reason, there is a need to plan and develop London multi-airport structure for the future growth of the aviation sector. In effect, this will be import in addressing capacity limitations.
Passenger profile
In the past 4 years London airports served about 135 million travellers, many flew to different destinations. In addition, these airports are sufficiently linked to Central London, however, there is less interaction among airports due to inadequate access. In the year 2012, London airports served approximately 135 million people, traveling to various destinations (Full Fact, 2013).. As of now, Heathrow and Gatwick airport are the busiest not just in UK but also across the world. Moreover, these airports are operating at capacity level. The recent appraisals indicate that by 2030, these airports should be able to operate at 100 percent -capacity (Greater London Authority, 2013).
London Airports Plan Approval
Airports in London have been able to manage and create an all-inclusive prospective growth of London aviation business. Nonetheless, the core issue is about realizing significant operation capacity for its airports. This is because several propositions were presented to the Airports Commission, like;
Building a third runway at Heathrow airport
Creating the second runway at Gatwick airport
Constructing an extra airport to the Eastern part of London, referred to as Boris Island and Thames Hub
However, development projects of Heathrow and Gatwick airports do not look viable as a result of environmental effect resulting from noise and air quality. Moreover, propositions to construct an extra airport to operate as a centre come with a litany of challenges; again, this doesn’t look achievable because of the high cost involved and the protracted timeline for constructing the project. Again, the entire shift of the airport may easily disrupt the current fiscal balance and may be too involving (Greater London Authority, 2011).
Based on this backdrop, I recommend a strategy to: Enlarge London’s secondary airports by augmenting as well as advancing infrastructure and services. To be successful with this strategy, few requirements should be put in place:
Diffuse the traffic from the main airports to auxiliary airports. The secondary airports will be appealing to the airlines and commuters coupled with an appropriate labeling and also marketing approach.
Heathrow airport for instance, can redirect short-distance flights to other airports as it concentrates on long-distance flights
Augment the transport right of entry with road and rail linkages
Enhance airport connectivity.
For the future of UK’s aviation industry, the following proposal may be strategic. The UK aviation industry ought to expand the road networks, enhance connectivity with upcoming aviation markets namely Brazil, West Africa, Turkey, Russia, India and China. Meet the demands of local traffic in terms of geographical locations, passenger profiles and accessibility.
Design and Capacity Limitations in Airport Operations Conclusion
In part one; the paper presented the effects of physical design and capacity restrictions on London city airports. It was clear that inadequate infrastructure and location are major reasons for capacity constraints. It also discussed services offered by London city airport and passenger traffic. The strategic priority of City airport is catering for the needs of business passengers. In the second part, the paper presented a discussion of the London airports’ competitive strategies. These airports cater for various markets and different strategies that fall in niche or differentiation groups. Strategic choices and techniques were categorical following a comprehensive assessment of passenger traffic, king of service and destinations. In part three, the paper assessed strategies and techniques for an effective control of the multi-airport structure. This section also recommended some strategies with the goal of future expansion of London’s aviation sector.
Design and Capacity Limitations in Airport Operations References
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Air Asia which operates globally entered the aviation industry as a low cost airline and it is headquartered in Kuala Lumpur, Malaysia. Its operations are through scheduled international and domestic flights and it is without any doubts the largest low fare airline in Asia and operates without frills which distinguish it as the pioneer of low cost flights in Asia (AirAsia, 2016a). According to AirAsia (2016b) AirAsia’s operations are mainly based at Kuala Lumpur International Airport (KLIA) within the Low Cost Carrier Terminal (LCCT) and it has other affiliate airlines either as subsidiaries or joint ventures such as Thai Air Asia, AirAsia X, Philippines’ AirAsia Inc., AirAsia Japan, Indonesia Air Asia and AirAsia India. The later airline i.e. AirAsia India, which is a subsidiary of AirAsia is the subject of discussion in this report.
The original founder of AirAsia was the Malaysian government, which established the airline in 1993 and it was later bought by Tony Fernandes and partners Pahamin Rejab (former AirAsia’s chairman), Aziz Bakar and Kamarudin Meranun on 2nd of December 2001 (AirAsia, 2016a). AirAsia has aggressively continued to spread out low cost travel through the management’s efficient, passionate and innovative approach to its current status whereby it has a route a network extending through more than 20 countries (AirAsia, 2016c).
Nowadays, AirAsia now is undoubtedly one of the largest low-cost and award winning airlines in the ASEAN and its growth and operations are expanding rapidly in the region. It airline started with a primary goal of ensuring that it frees air travel as well as making it so affordable to travel through the air in order to ultimately make sure that “now everyone can fly”. Currently, the airline as a whole operates a fleet consisting of 90 short-haul, medium-haul and long-haul aircrafts flying to over 60 destinations mainly from hubs in Malaysia, Indonesia, Thailand and India (AirAsia, 2016c). As a result, the airline operates over 3,500 flights on a weekly basis, thus coloring the Asian blue skies bright red alongside their livery striking. The airline also employs about 7,500 staff and within its short period of existence, AirAsia has managed to ferry approximately 90 million passengers to various destinations not only in Asia but also across the world (AirAsia, 2016a).
Objectives
AirAsia objectives are targeted at making sure that that airline’s rapid growth and expansion as well as operational efficiencies are maintained. The objectives are:
To achieve higher cost advantages by continuously reducing cost along its value chain through the analysis of the value chain to create cost benefits.
To establish itself as the leading low-fares and no frills airline in the ASEAN region in order to increase its passenger traffic.
To ensure that it maintains continuous improvements in service delivery as well as expansion of its operations in ASEAN region and globally.
3.0. Strategy and Answering the Key Questions
Business strategy of AirAsia put in place the foundations of the business, and the airline strives to deliver low-cost, no frill, reliable and hassle-free services and flights to its passengers. AirAsia’s low fare model is made possible for creation of values by implementing the key strategies highlighted below:
Strategic Analysis
According to Homburg, Kuester & Krohmer (2014) strategic analysis involves careful assessment of the prevailing conditions that directly or indirectly influence the business in order to identify the imminent challenges or unfavorable factors as well as critical success or favorable factors. As a result, the strategic analysis will involve the PESTLE analysis, Porter’s five forces, value chain analysis and the SWOT analysis (Porter, 2012). The strategic analysis is imperative for a business since it is vital in the identification of critical success factors which AirAsia should leverage on to achieve competitive advantage in the aviation market (Kotler & Armstrong, 2012; Porter, 2013).
PESTLE Analysis
PESTLE analysis is essential in ensuring that there is assessment of the company’s situation in terms of politics, economics, socio-cultural factors, technology, as well as legal and environmental factors aimed at determining a company’s long-term plans (Barney, 2011; Baker, 2013). Thus, the discussion will consider political, economic, social, technology, legal as well as environmental factors as discussed in the section that follows below.
Political
Politically, it was without any doubts difficult to fly within the ASEAN region making the airline to undertake a process of addressing the main barriers towards low cost travel through the double-sided agreement. According to Saha & Theingi (2013) in terms of politics, the landing charges are also envisaged to be a significant factor that will influence low fare airlines charges. There are also other political factors that influence AirAsia operations in India including: government support for the national airline carriers within the region, increased charges in the routes by the government; severe security restrictions and measures in the region; threat of terrorism attacks in the region; increased tensions between various countries in the country including Indonesia and Malaysia as well as the newly established “climate protection charge” for the compensation of carbon emission taxes by the aviation industry.
Economic
AirAsia airline plays an imperative role in ASEAN aviation market by offering low-cost flights through provision of inexpensive tickets as well as significant reduction in flight services. Through the cheap fares, the airline is likely to achieve competitive advantage in the market over its competitors irrespective of the economic situation (Kotler & Armstrong, 2012). Other economic situations that characterize the Indian aviation market include fluctuations in the currency, high prices of the petroleum fuels and/or products, economic recessions or sluggish GDP growth rates, the low cost airline industry in India is within the growth rate life cycle and finally the changes in the economy are attributed to variations in lifestyles including increased frequency in flying for vacations.
Social
Socially, the willingness of passengers in the region to take the long-haul flights which are significantly expensive is very minimal. There is also an increase in the global population as well as the middle class both of which have increased demand for air travel in the ASEAN region including for AirAsia (AirAsia, 2016b). Operations within the ASEAN region are also characterized by a variety of languages and cultures, whereby the grey market associated to this phenomenon is attributed to the rapid growth in the company’s operations (Kotler & Armstrong, 2012).
Technology
The availability of advanced technologies for AirAsia have been critical in ensuring that the airline provides online services that are essential at combining air ticketing, travel insurance, hotel bookings as well as car hire. According to Armstrong & Greene (2013) the airline has significantly pushed on the internet booking services in its attempts towards keeping operational costs in check.
Legal
Considering that long haul flights shall be offered by AirAsia Indian through its strategic alliances with a variety of airlines, the potential for expansion of its operations is likely to take place through further partnerships aimed at more liberalization of the services (Reicheld, 2012). Due to the fact that, commercial aircrafts have to fly a variety of countries this means that the greatest legal hurdle is to obtain clearance by the respective territories and/or countries to allow the company aircrafts fly over their skies. Thus, the AirAsia’s external environment is relatively stable as long as there is steady maintenance of the legal environment which is also critical in determining the consumer behavior (Schiffman et al., 2009).
Environmental
The ASEAN region, rapid population and economic growth have been attributed to creation of serious social consequences that have negative influence of the environment including air pollution and global warming. There is a constant increase in the rate of air travel within the ASEAN region as better technologies motivates more customers to travel; and this has been attributed to an increase in the number of issues related to green house gas and global warming effects (Saha & Theingi, 2013).
Porter’s Five Forces
Porter’s five forces is a model used by many companies particularly in their marketing strategy in order to conduct industry analysis as well as corporate strategy development. The model includes five key factors such as competition, supplier strength, customer power, and the potential for new entrants into the market as well as threat of substitute products (Armstrong & Greene, 2013).
Figure 1: Porter 5 Forces diagram
Bargaining power of customers
Buyers’ bargaining power has definite ability to put a company under pressure from its own customers (Saha & Theingi, 2013). There are 2 types of buyer power which are customer’s price sensitivity and negotiating power and price sensitivity by customers are the two main types of buyer power; hence the Revenue Management System was immensely utilized by AirAsia in almost all its operations thereby helping it to react to customer behavior to maximize on income. The availability of seats is availed at various prices in varied points of time and the charging for reservations is done upon the changing of the previous booking time by the customer to later or earlier day (Lamb, 2014; Porters, 2013).
Bargaining power of suppliers
Bargaining power of suppliers is imperative in describing the market input thereby acting for the benefit or detriment of the company (Mulcaster, 2013). To overcome the challenges posed by the high suppliers’ bargaining power, AirAsia adopted a full fledged ERP system to ensure reductions in the financial month-end times for closing processing, retaining process incorruptness, as well as speeding up data restoration and reporting process (Saha & Theingi, 2013)
Threat of new entrants
Threat of new entrants in the market is critical in determining the market profitability subsequently giving high return as well as attracting the new firms (Saha & Theingi, 2013). However, the barrier to entering the airline industry is significantly high due to the high capital required to rent or purchase the aircrafts, hire employees, set up an office etc (Lamb, 2014).
Threat of substitutes
Threat of substitute is attributed to the availability of products that increase the propensity of customers to switch or shift to alternatives and/or options (Saha & Theingi, 2013). The threat of substitutes for AirAsia in the ASEAN region is minimal, including busses, train and cruise due to the geographical factor.
Rivalry among existing competitors
For the aviation industry, the intensity of competitive rivalry is without any doubts the main determinant of the industry’s competitiveness (Kotler & Armstrong, G. (2012). The main competitors of AirAsia Indian in the Indian aviation market are Nacil, Jetlite, Air Sahara, Air Deccan, Jet Airways, Kingfisher, Spice Jet, Go Air, Indigo, Paramount and Jet Konnect. However, through its unique services AirAsia has managed to overcome its competitors to emerge as the leader in low-cost travel airline in the ASEAN region.
Value Chain
Value chain is a critical part of a company’s operations which is involved in converting inputs into outputs in the process of adding to the bottom line and also helping in the creation of competitive advantage in the market (Mintzberg, Ahlstrand & Lampel, 2014). The value chain of a company involves a wide range of activities and AirAsia’s value chain can be mainly divided into two main activities such as primary and supportive activities. The primary activities in AirAsia’s value chain are mainly concerned with logistical issues and usually involve the inbound logistics, outbound logistics, sales and marketing as well as services. On the other hand, the supportive activities in AirAsia’s value chain are usually concerned with the firm infrastructure, human resource management as well as technology. According to Kotler & Armstrong (2012) a balanced combination of these two operational activities which are critical for day to day operations of the company is essential in ensuring that optimal returns are achieved.
Barney (2011) notes that primary activities are without any doubt the most vital in making sure that the operations of a company take place in the respective markets effectively. In particular, the inbound logistics of AirAsia include activities such as appropriate management or progress of flights, keeping an eye on the competitors in the market as well as consistently assessing the ways through which low cost prices can be maintained through fuel efficiency control especially by advance purchase of fuel when the prices are low alongside effective planning of routes (AirAsia, 2016c). Alternatively, the outbound logistics of AirAsia are often carried out through an online platform which is used to enable customers to access online booking in order to get their air tickets. This is highly important because it helps customer to book their air tickets conveniently or print them prior to arriving at the airport (Gregson, 2014; Gronroos, 2014). Additionally, general electric engines are the ones used by AirAsia due to their reliability in order to ensure customer safety mainly because the company prioritizes their customers. AirAsia also has an edge due to its strong brand name which plays a critical role in its marketing strategy because it is attributable to a significant extent of the company success in the Indian aviation market through significant market collision as well as increased sales (Cameron, 2014; Deming, 2012). As a result, due to AirAsia’s marketing it has been sponsoring the mu football club as well as the amazing race tournament. In addition, some of the company’s aircrafts are usually painted with sports stars and club color, while a significant amount of merchandise related to AirAsia including T-shirts and caps are produced every year (AirAsia, 2016c). Services are the other form of outbound activities, and AirAsia is undisputedly involved in the delivery of a wide range of services to its customers such as pre-booking checked baggage at lower rates and offering e-gifts on flights that are delayed more than three hours as well as online medical services, renting a car and booking of hotels (AirAsia, 2016a).
Furthermore, AirAsia’s value chain provides supportive activities for the purpose of making sure that the business remains operational. The airline is not only concerned with offering classic low-cost flights due to its low-cost carrier (LCC) status but also it is advancing into ensuring that it becomes an integrated airline service provider. Thus, AirAsia is usually focused in making sure that it provides cheap fare travel as well as exploring new markets (AirAsia, 2016a). According to Shaw (2012) human resources management is an imperative function in ensuring company activities are supported. According to Nagle & Holden (2012) managing operational costs is essential in ensuring that the performance of employees is compensated. Finally, technology has been a critical component of AirAsia’s operations and a variety of technologies have been adopted by the airline in order to make operations efficient and easier and also minimize the cost (Lamb, 2014; Porters, 2013). For instance, AirAsia particularly uses the YMS, CRS and ERP technologies whereby they are used for accounting for the operational costs and expected revenues, to aid direct sales through web-based inventory and reservation system, as well as helping to save time and speeding up data restoration and reporting process respectively (AirAsia, 2016c).
SWOT Analysis
SWOT analysis is without any doubts the most significant business strategy tool used for the analysis of the internal environment of the business or company (Besanko et al., 2014). The SWOT Analysis is majorly concerned with the identification of the business’s strengths, weaknesses, opportunities as well as threats both at organizational and operational/managerial level. As a result, the SWOT Analysis covers both the external and internal factors that are likely to influence its success (Mulcaster, 2013). Thus, in this section the strengths, weaknesses, opportunities as well as threats of AirAsia shall be discussed in details to ensure that the specific position of the company is determined (Kevint, 2013; Monroe, 2013).
Strengths
With regards to the strengths of the airline, AirAsia has ensured that it maintains low costs in its operations and maintenance mainly through the change of the aircrafts from Boeing 737 to A 320 particularly in Indonesia and Thailand. Besides, AirAsia India maintaining low operational cost as a result of the existing online reservation system, other strengths include no frills, quick checked in etc. considering the Indian aviation market there is a significantly untapped market which gives AirAsia an upper hand to penetrate and subsequently stimulating to potential markets. The other strengths of the airline company include adoption of a flat organizational structure in order to ensure aggressive, effective and focused management; efficient and/or multi skilled staff; strong brand recognition; leader in IT by being a frontrunner in implementing IT solutions within the aviation industry making the airline to be an ICT Award winning airline company; and also maintaining a single model of aircrafts is very critical in ensuring significant reductions in maintenance fees are achieved.
In addition, the AirAsia’s website attracts above 20 million viewers on a monthly basis due to its multilingual status meaning that the translation of its messages whether in the airline’s original website, Facebook account, or Twitter handle are powerful marketing tools (Monroe, 2013). Moreover, strategic alliance partnership as well as joint ventures with varied airline companies is the other strength of AirAsia mainly due to the fact that that it allows acquisition of more market share by the company subsequent to the attainment of more brand recognition (AirAsia, 2016c). The no frills strategy is difficult to achieve for long-haul flights despite the fact that the flight time for passengers is either less or more than two and a half hours (AirAsia, 2016a).
Weaknesses
The weaknesses of AirAsia are minimal; however, due to significantly huge investments in the acquisition or aircrafts as well as implementation of modern technologies mainly through outsourcing, there is a considerable increase in the airline’s operating costs. In addition, the AirAsia usually offer not more than 15 kilograms of luggage allowance making it less competitive compared to other airlines in the same market that offer a higher but luggage allowance (AirAsia, 2016c). Furthermore, the services of the company are not optimal hence they pose other several weaknesses including limitation of service resources by lower costs; lack of centrality in the secondary airports’ location; lack of repair or maintenance facility for the AirAsia’s fleet, new market entrants are envisaged to provide services that are sensitive to prices; government interference on passenger compensations and regulation on airport deals; and finally the large number of complaints raised by customers, especially among the passengers with disabilities since limited services are offered to this group of customers (Laermer & Simmons, 2013).
Opportunities
For the opportunities of AirAsia, the airline should capitalize on offering low fares which are critical in encouraging people drawn from diverse walks of life to travel through the air. In addition, by embracing A320 which is more efficient to operate is essential in the stimulation of superior numbers as well as services to the passengers (AirAsia, 2016a). As a result, of the airline’s adoption of technology there is a possible opportunity in introducing booking of the flights through SMS thereby allowing anytime and every time booking of the seats in the aircraft prior to security scrutiny which has been critical in making sure that AirAsia flights are successful.
Threats
Finally, the threats of AirAsia are numerous but if they are effectively managed the company has the potential to continue making profits. The specific threats associated with the operations of AirAsia India include: the full service airlines not only in India but the ASEAN region as a whole have began lowering their prices in their attempts towards competing with low-cost carriers (LLCs) meaning that the entrance of other low-cost carriers (LLCs) is a threat to AirAsia India. Moreover, high fuel prices as well as the government policy and aviation regulation tend to vary across countries and regions (Mintzberg, Ahlstrand & Lampel, 2014). Additionally, there are also other factors which pose threats to the operations of AirAsia Indian including legal constraints that specifically affects strategic alliance across various countries; negative influence of customer confidence due to probable terrorist attack, accident as well as natural disasters; and finally the increased cost of operational costs in the production of value added aviation services (AirAsia, 2016c).
Strategic Choices
According to Hill, Gareth & Jones (2012) strategy formulation which is concerned with strategy choices involves the process of the selection of the most appropriate combination of actions aimed at ensuring that the goals and objectives of the organization are achieved. The process of choosing the appropriate strategic choice for AirAsia India follows the Porter’s generic model which involves 6 steps which such as setting organization’s objectives, evaluation of the environment of the business and/or organization, setting quantitative targets, aiming with divisional plans, analysis of the performance and ultimately selecting the choice of strategy (Homburg, Kuester & Krohmer, 2014). However, the Porter’s generic model is customized for the AirAsia into three key strategies such as the cost leadership, differentiation and focus.
The strategic choices are informed by the increasing middle class, GDP as well as population in India according to World Bank and Euromonitor International forecasts. As a result, the available actions include more expansion into the Indian and Chinese aviation market as well as developing cargo services. Each of these strategic choices poses a variety of benefits as well as detriments customers (Laermer & Simmons, 2013).
Recommended Plan of Action
Considering the prevailing conditions the Indian aviation market more expansion in the Indian market is the most appropriate since it will help the company to gain competitive advantage with its competitors such as IndiGo, GoAir, SpiceJet in that region and gain more economic of scale. This will include increasing the company revenues by a 20 per cent, number of passenger by 30 per cent as well as fleet number and length by 10 per cent.
Conclusions
After looking at above analysis the recommended strategy for AirAsia in the Indian aviation market is the expansion of its low-cost long haul flights further in China and the far regions of India. However, the company should consider aggressive expansion to the country. This is attributable to the rising middle class and population in the two countries as well as tourist attraction and being the biggest contributor to the world GPD growth by 2017 offers huge opportunities for AirAsia.
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Improving performance management; Performance management system at National Business Aviation Association
Improving performance management
Your first Individual Assignment in this module is an evaluation of the performance management system in an organization with which you are familiar. In Week 1, you prepared for this Assignment by choosing an organization that has a performance management system in place.
This week you will conduct an analysis of the performance management system in the organization you selected.
To prepare for this Individual Assignment:
•Review case 1.1 in your textbook (Aguinis, 2012), which presents a set of ‘ideal’ characteristics for a performance management system.
To complete this Individual Assignment:
•In 1,650 words, use the ‘ideal’ characteristics checklist (Aguinis, 2012) to evaluate the performance management system of the organization you chose in Week 1.
•In your evaluation, identify the strengths and weaknesses of the performance management system and make recommendations for improving the system. Be sure to use ideas and concepts from your readings and other research.
•As part of your evaluation, formulate a ‘test case’ describing an individual with a performance problem and discuss how the performance management system as it exists would or would not support this individual. Include an assessment of how the person responsible for conducting the individual’s performance evaluation would obtain performance information, determine whether/how to use formal performance management approaches to address the problem, what process would be followed and which stakeholders would be involved.
National Business Aviation Association Sample Answer
Performance management system at National Business Aviation Association
The success of any organization is based on the proper implementation of the performance management system for employees at National Business Aviation Association (NBAA) that creates an environment where the employees perform to the best of their ability with the aim of meeting the goals of the company (Yoon-Ho, Dong-One, & Ali, 2015). The management of NBAA believes that one crucial role of an aviation manager is to carry out truthful, sincere and meaningful performance reviews (National Business Aviation Association, 2015). This paper seeks to analyze the performance management systems at NBAA.
Strengths of NBAA’s performance management system
Objectives are clear and the system has specificity: at the National Business Aviation Association, the objectives and goals of the evaluation system are specific and clear. In general, a performance management system which is effective would always have specific evaluation attributes to correspond and fit with the job description of the employee (Ubidin et al., 2015). By having specificity, comprehensive guidance is offered to workers regarding what is expected of them and how they could satisfy these expectations. Identification of ineffective and effective performance: the performance management system at NBAA clearly differentiates between ineffective and effective behaviours and results, hence also identifying the workers who display different levels of performance effectiveness (National Business Aviation Association, 2015).
It is fair and thorough: for any performance management system to work properly, the people who are evaluated and managed should believe that the system is fair (Koss, 2011). The performance management system at NBAA is fair since the aviation managers who are evaluated believe that the system is fair and they clearly support the stated objectives and goals which were agreed upon when the performance term started. All expectations are communicated to the employees. At NBAA, everybody, including top executives and frontline workers, is appraised on a level playing field. If a score of 4 is considered satisfactory at one level, it retains that meaning at other levels. In addition, everybody at NBAA is subject to the process of evaluation in spite of how high he or she has climbed on the corporate ladder (National Business Aviation Association, 2015). Moreover, evaluations at NBAA are based largely upon factors that are objective. Performance criteria are well defined: at NBAA, the performance criteria are clear, understandable and properly defined. In essence, effective performance evaluation at this organization has standard evaluation rules, forms, and evaluation procedures. On the whole, it has performance criteria and standards which are well defined.
Process is less time consuming and data gathered is reliable and valid: NBAA’s performance management system takes less than 50 minutes to carry out, which is a relatively short time period. It also gathers data that is consistent and trustworthy. An effective performance evaluation system should be designed to be less time consuming and be economical in order to bring maximum benefits (Aguinis, 2012). Moreover, an effective performance management system needs to supply valid, reliable and consistent data. Being valid means that the measures of performance management system at NBAA include all crucial performance aspects, importance aspects are not left out, and measures beyond the employee’s control are not included. Having reliability implies that the measures of performance are consistent and free from error (Aguinis, 2012). Practicality: the system is easy to utilize, it is readily available for usage, and is satisfactory to the people who utilize it for decisions. Moreover, only the functions which are within the employee’s control are measured and the benefits of using this system outweigh the costs (National Business Aviation Association, 2015).
Weaknesses of NBAA’s performance management system
The evaluation is not ongoing and lacks meaningfulness: at NBAA, the evaluation process comprises nothing more than a 40-minute meeting each December. The performance is not very effective since it does not include ongoing, regular communication between the employees and their supervisors. Employees at NBAA are often astonished by the introduction of a new performance issue at the yearly review. This means that supervisors at this organization are not very good in their responsibilities. The evaluations do not take place regularly. System lacks context and strategic congruence: by lacking strategic congruence, the goals of individual employees at the organization are not aligned with organizational and unit goals. By lacking context congruence, the performance management system is not congruent with norms based on the culture of the organization and norms based on the culture of the nation and region wherein the organization is situated.
Performance is narrow-viewed: the performance management system at NBAA can be seen as somewhat ineffective since it tends to focus largely on what the member of staff has done and what the member of staff should do so as to improve her/his performance. This is consistent with some values which suggest that a person is a master of his/her fate and everyone controls their behaviour and the outcomes of that behaviour (Buckingham & Goodall, 2015). The problem is that these values are incomplete. An employee’s behaviours, results and contributions are all affected by a number of factors, most of which are beyond the control of the staff member.
Recommendations to improve the system
To improve NBAA’s performance management system, the first recommendation is that this system should be ongoing and the evaluation be carried out regularly. The process should not just comprise a 30-minute-meeting once a year. An effective performance management must include the ongoing and regular communication between the staffs and the supervisor. It should also leave room for input as well as feedback from the individual being managed. In addition, the people being managed should be given an honest and open feedback as regards any issues all through the process. A staff member must not be astonished by the introduction of a new performance issue at the yearly evaluation (Buckingham & Goodall, 2015).
Secondly, it is recommended that the National Business Aviation Association adopt more broad views of performance rather than narrow views. If the goal of the organization is to improve employee performance, then it should look at a broader spread of causes rather than looking only at the member of staff (Yeoh, Richards & Shan, 2014). Even workers who are extremely talented would have trouble performing well if they are hindered by poor business and production planning, if they do not have the necessary tools to effectively carry out their work tasks, if they are negatively affected by the work environment, and if they are not provided with adequate resources. As such, it is of great importance, especially when trying to find out what went wrong and how to put it right, to look broadly for causes as well as solutions (Ento, Bento & Ferreira, 2014).
Thirdly, is recommended that the performance management system at NBAA should have context and strategic congruence. To strategic congruence, the goals of individual employees at the organization should be aligned with organizational as well as unit goals. To have context congruence, the performance management system should be congruent with norms based on the culture of the organization and norms based on the culture of the country and region in which the organization is situated (Aguinis, 2012).
Test-case: in case an employee at NBAA has a performance problem, for instance underperformance due to slowness or lack of productivity, the HR manager identifies the problem and the main drivers of underperformance. The HR manager then assesses and analyzes the problem to determine its seriousness, how long it is has existed, and determines how big the gap is between what is delivered and what is expected. The HR manager then meets with the staff member to talk about the problem, and then they jointly devise a solution. The HR manager then monitors the performance of the employee and provides feedback and encouragement. If the performance of the employee does not improve, formal warnings are issued and in the end the employee’s job is terminated if the issue cannot be resolved.
The evaluator obtains performance information from supervisors, customers, and colleagues/co-workers. Statistical measures of employee’s quality of work and productivity also provide a wonderful source of information for establishing the employee’s performance levels (Ubidin et al., 2015). Formal performance management approach can be used and this includes the following process: inviting the staff member in writing to be present at a formal performance management meeting, and meeting is carried out by a suitable manager who would serve as the Chair. The line manager of the employee would also be present at the meeting to articulate the performance concerns to the worker. The employee will have an opportunity to ask questions and defend himself/herself (Yeoh, Richards & Shan, 2014). Before a decision is reached, the meeting is adjourned to consider all the pertinent information.
At the end of the performance management meeting, the Chair would decide whether a formal action is warranted or not. If no formal action is taken because employee’s performance is satisfactory or the employee’s performance has improved sufficiently, the worker would be informed about this and he or she would be encouraged to keep up with the satisfactory level of performance. The outcome of this meeting might be a written warning. The employee’s performance will continue to be monitored closely. If employee’s performance drops below the expected standard, a final warning would be issued. A final meeting may then be held, and a possible outcome would be employment termination (Ento, Bento & Ferreira, 2014). The stakeholders involved include the employee, the employee’s line manager or supervisor, and another appropriate manager.
National Business Aviation Association Conclusion
To sum up, the selected organization is the National Business Aviation Association. The strengths of this organization’s performance management system are that it is reliable and valid, it is fair and thorough, the process is less time consuming, the system has specificity and the objectives are clear. However, the weak points are that the performance system is narrow-viewed, lacks context and strategic congruence, and the evaluation lacks meaningfulness and is not regular. It is recommended that the organization take on more broad views of performance instead of narrow views and the system should have context and strategic congruence.
National Business Aviation Association References
Aguinis, H. (2012). Performance Management. New York City, NY: Prentice Hall.
Buckingham, M., & Goodall, A. (2015). Reinventing Performance Management. (cover story). Harvard Business Review, 93(4), 40-50.
Ento, A., Bento, R., & Ferreira, L. (2014). Strategic Performance Management Systems: Impact on Business Results. Journal of Computer Information Systems, 54(3), 25-33.
Koss, S. K. (2011). Solving the compensation puzzle: Putting together a complete pay and performance system. New York City, NY: Prentice Hall.
Ubidin, S. N., Aziz, N. F., Ahmad, A., & Sorooshian, S. (2015). Performance Measurement Systems. International Journal Of Management, Accounting & Economics, 2(2), 153-155.
National Business Aviation Association. (2015). NBAA2015. Retrieved from https://www.nbaa.org/
Yeoh, W., Richards, G., & Shan, W. (2014). Benefits And Barriers To Corporate Performance Management Systems. Journal of Computer Information Systems, 55(1), 105-116.
Yoon-Ho, K., Dong-One, K., & Ali, M. A. (2015). The Effects of Mutual Trustworthiness between Labor and Management in Adopting High-Performance Work Systems. Relations Industrials / Industrial Relations, 70(1), 36-61.
Why European and American airlines try to operationalize their governments to protect their markets against Middle East carriers
Over the last fifteen years, the big three carriers from the Middle East comprising Qatar Airways, Etihad and Emirates have expanded to become 3 of the most highly regarded global carriers in the world. Over the recent past, carriers in Europe and the United States have raised complains that the Middle Eastern airlines get unfair subsidies from their respective governments (Noakes, 2015). This paper seeks to evaluate the reasons why airlines in the United States and Europe are trying to operationalize their governments to protect their markets against carriers from the Middle East.
Through various agreements between the American government and governments of Qatar and the United Arab Emirates, the Middle Eastern trio commonly referred to as ME3 have increased their presence considerably within the American market. Even so, Delta, United and American Air Lines which are the 3 largest carriers in America and commonly referred to as the US3 assert that the Middle Eastern trio’s lavish spending and explosive expansion are due to billions of dollars on unfair subsidies from their governments. At the moment, Delta, United and American Airlines want the federal government to cancel those agreements which allow the Middle Eastern trio to encroach on their territory (Unnikrishnan & Flottau, 2015). In the year 2014, Etihad Airways expanded to nearly 15 million travellers, with Emirates carrying 3 times more travellers and US3 carried 34 times more travellers (Ball, 2015).
While labour unions and carriers based in the United States initiate a campaign in opposition to alleged subsidies for the Middle Eastern trio, the debate is already in progress in the European Union. The major players in the transport policy are seeking a new agreement with Middle Eastern countries aimed at regulating government subsidies, but Qatar and the United Arab Emirates along with their airlines are strongly against this effort (Dunbar, 2015). For many years, airlines based in Europe have lobbied against the ME3. These Gulf carriers affect a considerable part of the European airlines networks. As Etihad’s investment into Italy’s flag carrier Alitalia demonstrate, European airlines face the Gulf carriers not just on long-range services, but also inside Europe. As such, the ME3 are facing more pressure and scrutiny.
The European Commission (EC) seeks an authorization from EU countries to negotiate with the Middle Eastern countries regarding the issue of unequal competition. This process was instigated by Lufthansa Group and Air France KLM in 2014 in a letter in which, along with their subsidiaries, they demanded that competition with the Middle Eastern trio has to be more equitable and fair. The transport ministers of Germany and France made a joint proposition that until fair competition is ensured, ME3 airlines must not be given more traffic rights into the EU (Flottau & Unnikrishnan, 2015). The two transport ministers also stated that European airlines, in spite of significant adaptations which they have made, have continued to lose their share of the market to the Middle Eastern carriers on numerous destinations including Eastern Africa, Oceania, Southeast Asia and the Indian subcontinent (Flottau & Unnikrishnan, 2015). They noted that there is an urgent need to act and pointed out that the current situation decreases the attractiveness of EU hubs, harms the European airlines very much, and significantly threatens EU’s connectivity with the rest of the world.
The German and French transport ministers suggested that a response may be a wide-ranging air transport agreement with the Qatar and the United Arab Emirates if some specific conditions are satisfied fully. The conditions to be met are as follows: a guarantee of fiscal transparency, competition that is fair, exhaustive and full provisions on subsidies, unfair competition and practices, over and above giving the European Commission and EU countries proper means of action besides the standard dispute-settlement methods in case of nonconformity to or disobedience of these stipulations (Walker, 2015). They added that the opening of EU Markets would be slow and restricted. In an exhaustive air service agreement, only 3rd and 4th freedom rights should be covered and additional traffic rights to the Middle Eastern trio would be associated with a positive progression or development of the competitive environment. The 3rd and 4thfreedom of the air dictum cover the rights of to move traffic from and to the home nation of the carrier. However, the business model of the Middle Eastern trio is developed largely on connecting traffic and beyond – 6th freedom – and therefore the condition is very likely to be unacceptable to the Gulf countries and their carriers (Flottau, 2015). A proposition such as this one has been suggested by Richard Anderson, who is the Chief Executive at Delta Air Lines. He stated that new agreements between the Gulf countries and the United States have to prevent the Middle Eastern trio from offering flights which do not end in the United States or their home countries (Flottau & Unnikrishnan, 2015). This suggestion is equal to a prohibition on connections, which is in fact the exact business model under which airlines in Europe and the United States are operating.
Unbalanced and unfair competition with airlines from the Middle East
An important reason that makes US-based and EU airlines to operationalize their governments to protect their markets against carriers from the Middle East is the unfair competition from heavily-subsidised ME3 carriers. The United States, European and international carriers operate internationally under various Open Skies treaties which are aimed at lessening protectionism and freeing up competition. The intention is essentially to expand global cargo and passenger air travels through the elimination of government interference in commercial airline decisions with regard to pricing, capacity and routes (Aguinaldo, 2015). For nearly fifteen years, the Gulf airlines have been party to Open Skies treaties and the ME3 have aggressively expanded into the American market over the last 10 years, all set to compete with award-winning service and large fleets of new airplanes. With their international business threatened, airlines based in the United States argue that competition with the Gulf airlines has now turned out to be inherently unbalanced and unequal.
The US3 want their government to freeze the growth of the Middle Eastern trio into the American market and to negotiate once more the Open Skies treaties with United Arab Emirates (UAE) and Qatar. The Partnership for Fair and Open Skies, the lobby group which represents the US3, stated that the Middle Eastern trio have been given an estimated $42 billion over the last 10 years in subsidies from the Qatar and United Arab Emirates governments (Open Skies Partnership, 2015). The Middle Eastern trio are wholly dependent on taking traffic from other carriers through subsidizing for instance subsidized marketing, product levels or pricing (Open Skies Partnership, 2015). In essence, airlines in the United States are not concerned about Middle Eastern airlines flying domestic routes around America. Actually, the ME3 are only configured for long-haul international flying. What the US3 are looking to protect are their important international air travels out of and into the United States. Therefore, the US3 are seeking a new agreement. It is worth mentioning that any re-negotiation of Open Skies treaties may have sweeping business as well as diplomatic ramifications (Francis, 2015).
As said by the Partnership for Fair and Open Skies, ME3 airlines have been given $12 billion in shareholder advances and interest-free loans, in addition to $8.79 billion in loans from their governments in the past few years. Additionally, they have been given slightly over $11 billion grants and inequity infusions, plus an extra $9.5 billion in wage savings from labour costs that are below the market as well as other subsidies (Open Skies Partnership, 2015). Every time that a carrier based in the United States loses an international route to ME3, there would be a loss of 800 jobs in America (Dunbar, 2015). European and U.S-based carriers assert that subsidies for instance cheaper access to airports, interest-free loans from their governments, and cheaper access to services like ground handling and fuel make it not possible to compete for profitable international travellers. The Chief Executive Officer of American Airlines stated that there is adequate evidence which suggests that the governments of the United Arab Emirates and Qatar are going against the aviation trade treaties between the United States and these two Middle Eastern nations by giving huge subsidies to Emirates Airlines, Qatar Airways and Etihad: these subsidies are in amounts so high that are in fact record in the history of global trade (Dunn et al., 2015). Airlines in Europe are also disturbed. Transport ministers of Germany and France arranged for the European Union (EU) executive commission to espouse a strategy aimed at ending subsidies to the Middle Eastern trio. The initiative was backed by officials in Austria, Sweden, Belgium and the Netherlands.
There are quite a few things which make which the Middle Eastern airlines particularly unique. Firstly, of all the government-owned carriers in the world, Qatar, Etihad and Emirates are expanding in a disproportionate manner in comparison to their respective growth in Gross Domestic Product and populations. Not so many years from today, these three airlines would have more widebody jets than all carriers in the United States put together, in spite of the fact that Qatar and the United Arab Emirates have a population which is less than four percent of the United States (Baker, 2015). Secondly, these three carriers are not playing fair and their behaviour is actually destructive to other airlines. In essence, the long-term business model of the Middle Eastern trio is to run rival carriers out of markets as much as possible, and to do so at whichever cost, even if it means losing billions of money in the process (Flottau & Unnikrishnan, 2015).
U.S and European carriers seek to protect the profitable transatlantic routes
Another major reason as to why airlines in the United States and Europe are trying to operationalize their governments to protect their markets against carriers from the Middle East is that they are seeking to protect the highly lucrative transatlantic routes from new competitors. The US3 want restrictions on the destinations and routes which foreign airlines may fly into America. Over the past few years, carriers from the Gulf region have expanded into cities across America with direct air travels from their respective nations of origin. This growth has largely been met with slight resistance. In 2013, nonetheless, Emirates Airlines started to operate air travels between Milan, Italy and New York City: air travels that come from outside the domestic market of the airline. This a major source of the conflict (Bart, 2015).
Any air travels from the Gulf region with a stop in Europe allow the airline to sell flight tickets on the portion of the trip between America and Europe. In essence, this is a game-changing development given that transatlantic flights are highly lucrative and competitive and increased competition on the transatlantic routes would certainly be troublesome and worrying. The entrance of the Middle Eastern trio – which are very deep-pocketed and accomplished carriers – could actually be catastrophic and disastrous not just for U.S-based airlines, but also for their European alliance partners (Dunbar, 2015). Most of the transatlantic air travels are controlled by U.S-based airlines along with their Skyteam, Star Alliance, and Oneworld partner carriers based in Europe. Increased competition from the Gulf carriers on the transatlantic routes would surely lead to a decline in profits for US3 and the European airlines flying these routes such as Lufthansa, British Airways, and Air France.
Unlike U.S and European carriers, Middle Eastern trio not motivated by profits
The other reason is that airlines in the United States and Europe are trying to operationalize their governments to protect their markets against carriers from the Middle East because the big carriers from the Middle East are actually not financially motivated. They seek to increase their market share but not to make a profit. Etihad Airways, Emirates Airlines and Qatar Airways are not really motivated by profits and to increase shareholder value like other airlines. Every aspect of the operations of these three Persian Gulf carriers is run so as to create a loss and increase share of the market in order to develop the country and not the carrier (Francis, 2015). There is one particular thing which makes the ME3 unfair: it is not that these airlines have lower costs of staffing owing to where they are situated. It is also not because they have lower costs due to their location. Rather, these three airlines employ dirty tricks and have unfair advantage since they have almost unlimited access to interest-free capital and all aspects of their supply chain and operations are interlinked. The conspiracy between these airlines and their governments does not allow for transparency, which has the intention or result of giving these 3 carriers an unfair advantage in the marketplace (Baker, 2015). For instance, the President of Emirates Airlines, Sheikh Al Maktoum, is also the Chairman of Dubai Airports, he is Dubai Civil Aviation Authority’s President, over and above being dnata President. This is something that really presents a conflict of interest, particularly considering that the business organization is not motivated by money.
Furthermore, the landing fees at Dubai Airports are actually lower than the costs incurred in providing them. In other words, Dubai Airports lose money with each aircraft that lands there (Dunn et al., 2015). This is something a typical airport in Europe or America cannot justify. In Dubai however, Dubai Airports understands that Emirates Airlines benefits the most when landing fees are subsidized. Moreover, when a single person is in charge of the airport, the carrier, as well as the civil aviation authority, he can do virtually anything. Furthermore, when a passenger flies via an airport facility, there is usually a passenger facility surcharge. In essence, some constituent of the plane ticket cost will go to the airport facility for having utilized their terminal. Almost every airport in the world charges this passenger facility surcharge to both travellers who connect at or originate from an airport. Even though this fee could be different depending on whether the traveller is connecting or originating, each traveller is charged at least some amount. Nonetheless, at the Dubai, Doha and Abu Dhabi airport facilities, this does not happen. Facility fee is charged only to travellers who terminate at or originate from these cities (Noakes, 2015). The reason for this is that most travellers who travel on Qatar, Etihad and Emirates airline carriers are connecting, whereas most of the travellers on other carriers who fly to the airports in these cities are terminating at or originating from there. For instance, between Boston and Tokyo via Dubai, a passenger does not pay any kind of Dubai passenger service fees. However, if a passenger is terminating in or originating from Dubai, then he or she will be required to pay about $20.40 in passenger service fees.
Although ME3 do not care about profit making, they are essentially having foreign airlines subsidize operations at their hubs. There is also the fact that Emirates Airlines faced a $2.4 billion fuel hedge loss which the government of the UAE took care of. The fact is that under this system, other carriers just cannot compete with the Middle Eastern trio. This is not particularly about the fact that Qatar, Emirates and Etihad are fully owned by their governments. This is also not about routes, aircrafts, or service. It is about the fact that these 3 carriers are not financially motivated at all: making a profit does not motivate them (Ball, 2015). For this reason, European and US-based airlines cannot just compete with these ME3 carriers which are losing billions of dollars annually. European and US-based airlines cannot compete with the service without regard for their shareholders.
As per the Financial Times, the accusations against Emirates airlines comprise $1.9 billion of savings from the carrier’s non-unionized employees, $2.3 billion of savings from very low airport fees, and a $2.4 billion of fuel hedging loss. The boss of Emirates denies the accusations stating that cheap ground-handling and labour costs are not government subsidy but rather, they are a reflection of the Dubai government’s commercial savviness (Aguinaldo, 2015). Etihad is accused to have been given capital injections amounting to $6.3 billion, interest-free loans of $4.6 billion without obligation of repayment, in addition to extra committed subsidies of $4.2 billion from the government of Abu Dhabi. It is claimed that Qatar Airways was given interest-free loans by the government of Qatar amounting to $7.7 billion in addition to reduced debt-interest charges amounting to $6.8 billion because of sovereign guarantees (Bart, 2015). As a result, the Middle Eastern trio enjoy obvious fiscal advantages over their European and American rivals, which provides them with a safety net that allows them to operate unprofitable services for the purpose of gaining market share.
Long-range jets would bring much more capacity than needed by the demand
There is also the assertion by European Union and American carriers that very big jets for instance the long-range Airbus A380s would bring a lot more capacity into the United States and the European Union than is in fact warranted by destination and origin demand. The U.S.-based carriers claim that the Middle Eastern trio are adding capacity to the United States which outstrips the demand by far, since there is very little destination and origin traffic between the United States and United Arab Emirates and Qatar (Flottau, 2015). This denotes that the Middle Eastern trio are siphoning traffic from EU and US airlines to Asia and beyond at a scale with which the American and European carriers are not able to compete because of unfair subsidies from Qatar and UAE governments.
In the United States, James Hogan and Tim Clark, who are the CEO and President of Etihad and Emirates respectively, strongly defended their points of view in various meetings where US-based carriers and their unions pushed to reduce the access of ME3 to the United States. These 3 Gulf airlines are calling for the government of the United States to start consultations with the United Arab Emirates and Qatar governments. Until a resolution is reached, airlines based in the United States assert that no new ME3 airline capacity to America should be permitted. Even so, critics argue that this condition abrogates the open-skies agreement (Noakes, 2015). On the whole, airlines in Europe and America cannot effectively compete with carriers which benefit from significant subsidies from their governments. Nonetheless, the boss of Emirates Airlines stated that the airline only ever got $10 million from the UAE government as seed capital in the year 1985 and that its explosive growth on the international arena is as a result of a combination of the Gulf region’s geographical good luck at the midpoint of West and East as well as the pro-aviation policies of the government of Dubai (Dunn et al., 2015).
Conclusion
In conclusion, airlines in the United States and Europe are operationalizing their governments to protect their markets against Persian Gulf carriers due to unfair competition from these carriers which are very much subsidized by their respective governments. The Middle Eastern trio have been given over $41 billion in the last 10 years in subsidies which gives them unfair advantage over US and EU carriers. Moreover, the Middle Eastern carriers are actually not motivated by making profits. They are operated so as to create a loss and increase share of the market in order to develop the country and not the carrier.
References
Aguinaldo, J. (2015). Disputing the Open Skies. MEED: Middle East Economic Digest, 59(36/37), 32-33.
Baker, M. B. (2015). U.S., Persian Gulf Carriers In Open Skies Spat Over Funding Allegations. Business Travel News, 32(5), 12.
Ball, L. (2015). Outlook stormy as U.S. open skies debate rages. Air Cargo World, 105(3), 20-21.
Bart, J. (2015). Emirates CEO goes on offensive. USA Today.
Carey, S. (2015, February 24). U.S. Airlines Clash Over Rivals From Persian Gulf. Wall Street Journal – Eastern Edition. pp. B1-B5.
Dunbar, M. (2015). Big 3 carriers aim to rollback US Open Skies. (Cover story). Canadian Travel Press, 47(26), 1-14.
Dunn, G., Yeo, G., Russell, E., & Pilling, M. (2015). US big three accusations spark open-skies debate. Airline Business, 31(2), 14.
Flottau, J. (2014). Defining Fairness. Aviation Week & Space Technology, 176(41), 35.
Flottau, J., & Unnikrishnan, M. (2015). France, Germany Protest Gulf Carrier Encroachment. Aviation Week & Space Technology, 177(11), 1.
Francis, R. (2015). North Texas officials, airlines seeking new talks. Fort Worth Business Press, 27(22), 7.
Noakes, G. (2015). Sky strategies. Buying Business Travel, (75), 56-59.
Open Skies Partnership. (2015). U.S. airlines, unions reveal evidence of $42 billion in subsidies and benefits by Qatar and the UAE to their state-owned carriers. PR Newswire US.
Unnikrishnan, M., & Flottau, J. (2015). Lobbying Against Gulf Carriers May Be To No Effect. Aviation Week & Space Technology, 177(17), 1.
Walker, K. (2015). A Dangerous Debate. Air Transport World, 52(4), 5.
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Competency Frameworks in the Arabian aviation industry
Competency Frameworks in the Arabian aviation industry
Order Instructions:
What do you see as a major problem in constructing a competency framework? Do you find these frameworks used regularly in your industry or culture?
Note: My industry is aviation.
Note: My culture is Arab culture.
SAMPLE ANSWER
Competency Frameworks in the Arabian aviation industry
Introduction
A competency framework is a structure that entails setting and defining each competency required by individuals executing their responsibilities while working in a firm. These competencies range from problem-solving capabilities as well people management skills. Most industries in the Arab culture have distinct competency frameworks to enable them place themselves at a significant point in the realization of the set objectives. Alzeban (2015, p.58) argues that a competency framework is indispensable in assisting an organization to have effective management and efficient decision -making process in respect to promotions, hiring, and selection (Elragig & Townley 2012, p.132). The aviation industry in the Arabian countries, to be exact, has a distinct competency framework towards its employees. However, the process of formulating a competency framework in those states becomes a problem to the formulators. Therefore, the following discussion indulges in discussing major problem addressing the major problem experienced when producing competency framework in the Arab culture. In addition, the paper looks into whether the formulated structures are regularly used in the aviation industry in the Arabian countries.
Discussion
The Arabian aviation industry faces problems when formulating competency frameworks. The competency model in the Arabian aviation industry comprises of management skills, occupation-particular prerequisites, industry-wide technical competencies, and industry-sector technical requirements. In addition, the Arabian aviation industry also demands competencies that comprise of workplace competencies such as teamwork, planning and organizing, business fundamentals, and working with tools and technology (Elragig & Townley 2012, p.134). Furthermore, the industry requires academic qualifications ranging from science, engineering, basic computer skills, mathematics, reading, and writing. The above competencies are not limited to personal effectiveness competencies comprising reliability, initiative, professionalism, and interpersonal skills. However, formulating a competency framework with the stated competencies above is addressed with issues. One of the critical problems in constructing competency framework in the Arabian aviation industry is to illustrate a perfect set of behaviors and traits for any particular role. Li, Weiss, Mueller, Townley & Belmont (2012, p. 394) argues that one of the distinctive values of the Arabian culture is teamwork. Therefore, the individual role is not emphasized in this particular society than group work. This situation poses a problem when formulating a competency framework since the Arabian aviation industry uses a pre-list of common standard competencies. This condition makes it hard for the industry to customize the competencies to individual roles in the place work.
The unclear customization of group roles to individual functions makes the Arabian aviation industry static. This obscures the respective industry towards future expectations. This major problem also causes an obstructed identification of a range of competencies (Li, Weiss, Mueller, Townley & Belmont 2012, p.398). Furthermore, the Arabian industry being static implies that it provides greater insight into current behaviors that are rewarded by the management rather than focusing on what effective performance should look like in the future. The social context of the Arab culture incomprehensibly influences the construction of competency framework. Individual performance in the Arabian aviation industry is gauged against social context (Townley & Ezard 2013, p. 1237). For instance, teamwork association defines an individual productivity. The more the group performs, the more individual is said to become more productive. Thus, it can be said that constructing a competency framework in the Arabian aviation industry will continue experiencing problems because of its overreliance on the societal factors (Alzeban 2015, p. 59). The competency framework in the Arabian aviation industry can only improve if the industry stops over relying on societal factors when formulating competencies frameworks. Once the industry deviates from over relying on social contexts, it will be able to focus on the workforce’s qualities.
The competency frameworks are regularly used in the aviation industry and Arab culture. When the focus is placed on the airline sector, the competency framework is used mostly during selection, hiring, and promotion (Elragig & Townley 2012, p. 138). When the industry is interviewing applicants to fill positions in the Aviation industry, most of the competencies tested are mostly social ones. Once a candidate demonstrates the tested societal competencies, the candidates are hired and assigned the respective job that meets his or her specifications. The industry’s environment approves teamwork than individual work (Rebarber, Tenhumberg & Townley 2012, p. 82). Thus, even after employment, an employee’s performance is measured against how the respective employee relates with his or her colleagues. For instance, the industry gives members of a group mandate to investigate the competencies of one of them about executing roles. Hence, competence framework is used in the Arabian aviation industry to evaluate how the staff is situating their skills towards the development of the industry (Li, Weiss, Mueller, Townley & Belmont 2012, p. 401). In the Arabian culture, competence framework emphasizes the importance of work experience towards industry’s progression. In this culture, the age of person does not matter: what matters are the competencies of the individual employee and his or her competence experience.
Conclusion
Constructing competency framework entails addressing many challenging issues. In the Arabian aviation industry, the cultural society is pertinent in formulating competency frameworks. The issue of age does not make sense in the Arabian industry than in the American aviation industry where competencies are attributed to advanced years.
Reference list
Alzeban, A 2015, ‘The Impact of Culture on the Quality of Internal Audit: An Empirical Study,’ Journal of Accounting, 30, 1, pp57-77, retrieved on 26 August 2015 from Database: Business Source Complete
Elragig A, & Townley S 2012, ‘A new necessary condition for Turing instabilities,’ Math Biosci, 239, 1, pages 131-138, retrieved on 26 August 2015 from Database: Business Source Complete
Li, G, Weiss, G, Mueller, M, Townley, S, & Belmont, M 2012, ‘Wave energy converter control by wave prediction and dynamic programming,’Renewable Energy, 48, pages 392-403, retrieved on 26 August 2015 from Database: Business Source Complete
Rebarber, R, Tenhumberg B, & Townley, S 2012, ‘Global asymptotic stability of density dependent integral population projection models,’ Theor Popul Biol, 81, 1, pages. 81-87, retrieved on 26 August 2015 from Database: Business Source Complete
Townley, S,& Ezard, T 2013, ‘A G matrix analogue to capture the cumulative effects of nongenetic inheritance,’ J Evol Biol, 26, no. 6, pp.1234-1243, retrieved on 26 August 2015 from Database: Business Source Complete.
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Fleet Planning
Project description
when considering an order for new aircraft” fleet commonality” is an element that planners consider. What are the main benefits of commonality between a new aircraft and the existing fleet? How significant are each of these? How long lasting?
some airlines seems to value these benefits highly and order aircraft from the same manufacturer as their existing fleet , with much commonality .Give at least two recent examples of this and give the likely rationale for their decisions, with references.
on the other hand some airlines seem to find on offer sufficient attractive to persuade them to forego the benefit of commonality with their existing fleet fleet. why might this be? Give at least two examples of this with likely rationale for their decisions, with references. How might the benefits be mitigated?
why might an airline order two different aircraft types from two different manufacturers with similar specifications, foregoing commonality benefits within the new fleets? with references.( HINT: Think of a Boeing and an Airbis with similar specs then Google each type- BXXX aircraft orders and Axxx aircraft orders . Having found an example , Google that airlines aircraft orders. This normally takes you to news items which may include the rationale.
what opportunities and issues do full or partial mergers between airlines raise in fleet decisions in terms of commonality? give at least one example with references.
Does joining an alliance offer similar benefits in terms of fleet acquisitions? Give your reasons.
SAMPLE ANSWER
Fleet Planning
Introduction
Fleet commonality is a factor that most airline companies are focusing on. Airlines have the opportunity to choose from different products when a new aircraft is being purchased. However, planners tend to opt for the aircraft that has commonality to the already existing products. This is because there are many benefits associated with this trend. On the contrary, research also shows that going for a new type of aircraft may be the best way to boost sales to a much higher level.
Benefits of Commonality between a New Aircraft and the Existing Fleet
This strategy has benefits in the operational perspective in that one pilot will still be able to operate the new aircraft. This is significant since in case of an emergency, one pilot can easily step in for the other. Therefore, the airline will not have to suffer losses from delayed or cancelled flights. Such occurrences result to loss of loyal customers as they can start to question the reliability of the airline. This benefit is long lasting because the pilots will always be able to step in for each other. Thus, when one pilot cannot be available for the flight, the other pilot or an assistant will still be qualified to handle the plan. When planes are delayed or cancelled, the airline usually suffers a great loss even in the long term because the customers lose trust in the company.
Second, the airline company will also be able to reduce costs associated with training new pilots, or transitioning a pilot to the new aircraft. When a new type of aircraft is purchased, these costs will be inevitable since the current pilots will not be equipped with the necessary skills to handle such a product. This benefit is short lasting because the costs will only be saved whenever a new aircraft is purchased.
Third, the staffing level, which may also change as a result of a new aircraft with no commonality, is also reduced. The more the staff, the more the costs associated with salaries. This may affect the financial stability of a company, especially when it is still new and growing. The airline company will be in a position to benefit from salary amounts that they are able to pay their staff without delay. Fourth, a new type also requires additional spares, a factor that may be avoided in case a common product is purchased. Although this is not of much significance, the airline may benefit from saved costs, which may have been influenced by the purchase of entirely new spares. Unfortunately, this amount is short lasting because whenever a spare is used, the airline company will still be forced to purchase another product.
Good examples of airlines with the above characteristics include Southwest and JetBlue airlines. JetBlue features the introduction of new types of aircrafts into its fleet. The main reason why this is so is that the company is trying to increase revenue by offering products that will meet all types of market demand. The products are supposed to satisfy the unmet needs of the customers. For instance, starting in the second quarter of 2014, this company will launch a refreshed version of core JetBlue Experience, as well as introduce another type that will enhance experience of passengers (Our Planes, 2014). On the contrary, Southwest airlines are strict on introducing a common aircraft to its fleet. This is because the costs associated with it will not be excessive; therefore, the company will still be able to manage the customer service offered (Southwest Corporate Fact Sheet, 2014). Here, the plane tickets are purchased at low price, and other services are offered for free.
Reasons why some Airlines Forego the Fleet Commonality Strategy
Although choosing fleet commonality may feel like the best option for airlines, it is also common to find some airlines giving up the commonality for a new type of aircraft. This is usually the case when an airline notices an opportunity to save more and still benefit to a certain level, when the new type of aircraft is purchased. The target market is the major factor that drives the creation of a product or service. Therefore, it closely affects the type of fleet planning decision made. Just like many other companies, market demand is what airlines try to meet. When a new aircraft has all the content that will make it capable of satisfying the needs of the target market, and the price offered for the product is fair, then an airline company will most certainly opt for it. Another reason why some companies choose to mix their aircraft is because they already know the advantages. At times, purchasing a new type of aircraft is usually more beneficial than going for the common type. This is in terms of the long term benefits associated with gaining the right fleet size.
The Southwest and JetBlue carriers can help demonstrate this occurrence. Southwest airline decided to go with the fleet commonality because the management noticed that there is so much at stake. This airline offers cheap services to its consumers, and this is the major method that they use to ensure that customers return for other services (Galletti, Lee & Kozman, 2010). JetBlue, on the other hand, is a company that is more focused on the market demand. Therefore, if they bring in new products to meet market demand, the company will benefit from more sales in future (Chunhua, Johnson & Smith, 2009). Currently, there is not much to lose if a new aircraft is introduced mainly because the tickets are sold at an expensive price. These benefits associated with each choice may be mitigated by ensuring that the airline company decides basing on qualitative research conducted on its system.
Commonality benefits can also be foregone when an airline opts to purchase two similar airline products from different producers. The main reason why this happens is as a result of product quality. Both companies that are producing similar products cannot have the same quality policies (Brüggen & Klose, 2010). Therefore, one aircraft may have better quality than the other. When the airline company has two airline products from different producers, the risk of suffering total loss is reduced. If one aircraft fails, the other one will probably still be functioning and bringing in sales. Another reason for ordering same product from different companies is so that the airline can enjoy the various benefits associated with each individual product. Although the resulting feel will be similar, such an airline will have taken a mixed fleet approach. Along with the benefits of having a mixed fleet, the airline will still be able to reduce costs for the new fleet (Treanor, Carter, Rogers & Simkins, 2013). With a similarity in products, pilots will be able to cater for the other product without problems since they are basically the same.
Opportunities and Issues that Mergers between Airlines Raise in Fleet Decisions in Terms of Commonality
Mergers in airline companies usually raise either opportunities or issues on the fleet decision for both full and partial situations. When an airline merges with another, it becomes difficult to make a decision without informing the other party. This usually results to great disputes since the two airlines both have their own leaders. Thus, it becomes unclear on who should have the final say. For example, American and US Airways recently merged officially to create one of the biggest airlines in the region (Rushe, 2013). These two airlines have opportunities to grow since each group will enjoy the increased sales. There is also a better opportunity to cut costs since the airline will now be treated as belonging to one specific airline. For instance, the American and US Airways merger was one way to help get the American airways out of its bankruptcy situation (Rushe, 2013). Therefore, any airline company hoping to reduce costs and increase growth should consider merging its aircraft with that of another company, which has promising results.
The Effect of Alliances in Fleet Acquisitions
Merging airlines, however, is also associated with various challenges that are worth considering before getting into the process. First, merging the staff and technology is usually very difficult as what worked for one company may not be what will work for both (Rushe, 2013). It takes time to find a balance in what works for both companies. The staff of the airlines may pose a challenge when they start resisting the change. This will require time and necessary management skill to help change the situation. For example, in 2010 United’s merger with Continental resulted to years of technology problems (Rushe, 2013). Therefore, in terms of commonality, issues will be present, and thus, the decision making process is made more difficult. This affects productivity because there are times when a decision is required as fast as possible.
The problem with a merger is that the decision to purchase an aircraft is greatly affected. Before a merger, each airline has the freedom to obtain an aircraft that will meet its customer’s needs. The customer needs of airlines are not same since their prices and pricing strategies are also different. Hence, fleet acquisition benefits will not be similar for both sides. Only one airline will eventually acquire the merged plane (Galletti, Lee & Kozman, 2010).
Conclusion
There are advantages for both choices on fleet commonality. Management should not choose to go for a common approach since what works for one airline will not work for all airlines. Instead, fleeting decisions need to be made based on the financial and operational states of the airline. The type of aircraft purchased needs to make the situation better by bringing in more sales and cutting costs. If the company notices that sales will be disturbed, and costs will be too much, then the choice in mind is probably not the best.
References
Brüggen, A., & Klose, L. (2010). How fleet commonality influences low-cost airline operating performance: Empirical evidence. Journal Of Air Transport Management, 16(6), 299-303. doi:10.1016/j.jairtraman.2010.02.006
Chunhua, G., Johnson, E., & Smith, B. (2009). Integrated Airline Fleet and Crew Robust Planning. Transportation Science, 43(1), 2-16.
Galletti, D. W., Lee, J., & Kozman, T. (2010). Competitive benchmarking for fleet cost management. Total Quality Management & Business Excellence, 21(10), 1047-1056. doi:10.1080/14783363.2010.487709
Our Planes. (2014). Retrieved July 27, 2014, from JetBlue: www.jetblue.com/travel/planes/
Treanor, S. D., Carter, D. A., Rogers, D. A., & Simkins, B. J. (2013). Operational and Financial Hedging: Friend or Foe? Evidence from the U.S. Airline Industry. Journal Of Accounting & Finance (2158-3625), 13(6), 64-91.
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