The air travel remains to be the most preferred means of transport in the world today. However, managing the operations in the air industry is one of the most challenging tasks given. This due to the fact that there are several challenges that affect a smooth running of the daily operations including technical failures, human errors and unforeseen natural calamities. Problems caused by human factors include technical failures as a result of an improperly fixed aircraft or a runway collision resulting from ground operator errors among other factors.
Naturally caused woes, on the other hand, involve weather related problems such as snow and heavy rain, fire and volcanic eruptions among other factors. Such challenges have resulted to most airports incurring high losses while others are forced to close or form mergers as a way of dealing with simultaneous losses. On a broader perspective, airport woes not only affect the airport itself but also other industries as well. The solution to dealing with various airport issues remains to be a big challenge to various stakeholders and airport management.
As a way of alleviating the challenges, it is important to understand the various shortcomings facing the airports operations, their impacts to economic development and solutions to addressing their occurrence. This paper, will therefore address the question ’what are the challenges affecting airport operations?’ To answer the question, the paper outlines the magnitude of various challenges experienced by airports operations and their economic impacts both the airport and to the economy. This is achieved through reviewing statistical records on the issues in the previous and current airport woes. The paper will also discuss possible ways that airports management and stakeholders could adopt to mitigate the impacts especially those caused by human factors.
Theoretical framework
Airport woes comprise of all the challenges and shortcomings that affect the operations of airport activities. Like any other form of business, airports are mandated with the responsibility of generating profits for the company’s stakeholders as well as contributed to the country’s economic growth. In addition, airport activities aid in easing transport for various type of clientele, whether travelling on a business trip, leisure or just visiting friends and families (Acharya, 56).
In simple terms, people travel and merchandise travel by air to transact businesses in different countries. This means that airport operations benefits not only the shareholders but also contributes to the country’s economic growth and the publics’ economic development. As such, that transport is the core determinant of economic growth and development especially in the global market.
For a long time, airports in various parts of the world have suffered losses attributed to natural and human-caused factors. Various challenges have pushed the airports to apply for bankruptcies while others form mergers as a way of preventing the premises from major economic deteriorations. For instance, the airline industry went into turmoil in the early 2000s with major airlines such as the US airways and the United airlines filing for Chapter 11 bankruptcy protection in 2002. In 2005, Northwest airlines and Delta airlines went bankrupt and later formed a merger, thus resulting to four major bankruptcies in the airline industry in the scope of three years. Airports still have to deal with financial shortcomings brought about by the presence of various issues and challenges that alter the daily operations. these include flight departures and arrivals, as well as ensuring the safety and security of the travellers and the staff.
Challenges facing the airports
The airport industry is mandated with the responsibility of providing national and international air transport. This means, that for the transportation process to be effective, there is need for efficient and non-interrupted flights to various destinations Failure to which the airport stakeholders are likely to incur unforeseen economic consequences (Acharya,, 340. However, several existing and recurrent woes have made the operations in the industry to slow down, thus resulting to increased concern on the economic factors benefiting from the airport operations. As mentioned earlier, airport woes vary from human factors, natural calamities to fluctuating global economic growth that determines the success of every form of business in the global market as discussed (Hardaway 190).
Human factors by the airport staff and management
According to a survey conducted by the Airport Cooperative Research Program (ACPR 2011), over thirty percent of the airport challenges are caused by the presence of human errors in the airport operations. Issues such as delayed flights due to technical problems, runway incursions and excursions and low-quality customer services among others, attribute to the expected profits and economic benefits of the airports and other involved stakeholders. As a way of reducing losses caused by human errors, airport management is constantly working on the ways of reducing human factors hence increasing work productivity and increase customer safety. Without such measures, airports will continue losing their customers, incur costs of repairing damaged premises and also affect the economic development of the stakeholders, thus leading to slow global economic development.
Safety and security
Security of the customers remains to be one of the major concerns for the airport operators. This is especially after the September 11 terrorists’ attacks as well as subsequent bombing of the Israeli and the recent Malaysian airplanes respectively. The subsequent result is that most people are now afraid to travel by the use of some airlines while others have shied away from travelling by air at all costs. As a result, the need to increase security measures at the airports is a demanding challenge that has seen most airports drain their resources in purchasing high tech security gadgets, and hiring and training additional security personnel.
As Hardaway (232) recommends, ensuring that the customers are safe from human related errors is also another concern that has affected the airports operators deeply. Incursions, excursions and other runway damages lead the company to input a lot of capital in repairing broken airplanes and premises as well as loose the flights scheduled after an occurrence of such tragedy. A report by the FAA (2011) indicated that the level of fatal crashes has reduced since 1960s with only 23 crashes reported in 2012. However, most travellers are still afraid of using air transport, thus alleviating further financial concern for the industry. As a result, the involved airline companies are likely to suffer mass losses in addition to losing potential customers who are the main source of income.
Natural calamities
Natural related calamities are unpreventable despite being one of the main causes of flights delays in arrivals and departures, cancellations as well as damages resulting from airplane incursions and crushes. In the recent past, airport operation have been interrupted by natural factors such as rain, heavy fog and snow, wind, volcanic eruptions and naturally caused fires caused by lightening (Gosling and Upham, 25). According to statistics by the International Air Transport Association (IATA, 2012), natural calamities such as the volcanic eruption experienced in eastern Asia in 2012, and the Chicago fires of 2014 contributed to a tremendous losses to the airports, airlines and the general public who depend directly or indirectly on the airport operations. Natural calamities are some of the most serious challenges facing the airport industry as the management has no power to prevent or control their occurrences. This leaves the airport sat a vulnerable situation only to hope for the best especially in terms of unforeseen damages resulting from the occurrence of any form of natural disaster.
Fuel costs
The recent fluctuation in the price of gasoline is a huge challenge to the airport financial returns. The high fuel costs mean high operation costs which have a direct impact to the flight ticket costs that travellers need to pay. Due to increased airfare as a result of high costs of gasoline, most travellers opt to use alternative means of transport. As a result, this impacts the projected financial returns (Hardaway, 68).
In addition to fuel costs, their rising green movement that calls for the use of sustainable energy is a trend that poses a challenge to the airports. Use of biofuels and biologically generated renewable energy which are environmentally friendly requires the airline industry to change the engines that use fossil fuels and also modify the airlines into light bodied aircrafts that consumes less energy (Gosling and Upham, 219). This adjustment required a high initial cost of purchasing the aircrafts, thus directly affecting the financial adjustments of the involved airlines.
Coping with inflations and recession
The recent 2008 global economic recession had a direct impact to the airport returns as organizations and individuals doing businesses in the foreign countries had to limit their travel plans as their businesses were performing poorly. On the other hand, inflations and recession affect the prices of the air, thus limiting the number of travellers and cargo (Acharya, 39). While the fluctuating prices affects the number of flights made in a particular airport, the airports has to come up with measures such as cutting off on some expansion projects so as to cope with the impact of financial crisis. This as a result leads to a reduction in the quality of services hence having a negative productivity of the business.
Fluctuating consumer demand
Consumer needs are naturally hard to satisfy. The nature of consumer needs is that they are constantly changing. Once a consumer fulfills a certain need, they always desire for new and more sophisticated needs which the airlines must also come up with ways of satisfying them. Satisfying the changing customer needs requires the airports to increase their initial costs of obtaining the desired services, and this means increased price of a particular service. As Berry and Jia (41) point out, this raises another challenge of the customers’ willingness to pay for the services. This is whereby, if the customers are not willing to pay additional costs incurred, the company will not only operate with few clients but will also have difficulties breaking even the incurred costs.
As a result of increased costs of operating the airports, sometimes airports are faced with the challenge of postponing their expansion programs so as to reduce their expenditures. For instance, the deferral of one billion dollars project to expand the runway by Brisbane airport in Australia led to continued congestion and low traffic. According to Berry and Jia (35), the consequences to such issues result to clients seeking alternative airports where they will be served with efficiency and this result to losses and accumulation in possible expenses. In addition, inability to finance the expansion expenditure is worsened by the banks tightening their lending conditions thus leaving the airports with the load of risking losing their resources if they don’t finance their programs.
Expansion problem is further alleviated by the emergence of large aircrafts such as the A380 that requires a wide runway and taxiway to depart and land. The modern form of large-bodied aircrafts is said to have low-density body, uses renewable sources of energy with little carbon dioxide emissions and also can accommodate an additional number of travellers.
As a result, airlines are slowly buying the large aircrafts to adhere to the environmental regulations and also fulfill customer changing needs that call for sophisticated models of aircrafts (Berry and Jia, 23). This consequently affects various airports’ operations as they are forced to expand their runways; a situation that requires additional expenditure (Hardaway, 189). If the airport lacks finances to expand their existing runways, this will result in tremendous losses as the large aircrafts have to seek alternative airports with accommodating runways.
Dealing with bad publicity is also another problem that has brought many airports down. Bad publicity mostly results from the types of services experienced by the customers when they check in or during the actual flight. For instance, the Philippine airlines among the airports that have suffered greatly as a result of bad publicity resulting from slow services, as well as congested reception. Bad public image results to customers looking for alternative airlines where they are likely to get better customer services. As a result, this is likely to impact the company’s economic returns which are determined by the number of customers booking a flight.
Impacts of airport woes
Airport products and services are intangible and highly perishable, and this means that their consumption has a direct impact on the company’s financial returns. Any missed flight resulting from either natural or human factors are likely to impact the projected financial returns to the airline company in a big way and the airport in particular. The airport woes have a direct impact on the financial returns of the company. This is due to the fact that any missed flight or fear of the public to book due to fear of their safety and safety as well as unfulfilled demand leads to the expiry of services which can never be recovered.
On the other hand, damages caused by calamities such as fire, heavy rains among other factors will require the airport to pump in additional costs to repair the damages, thus further deteriorating the financial base. The situation is further worsened by the high-interest rates charged by banks on loans borrowed as the expenditures to expand or repair the airports. For instance, according to the report by the Federal Aviation Authority (FAA) on the delayed flights caused by fire in O’Hare international airport Chicago on September 2014, the airport suffered a three-day flight delay, an issue that resulted to over 15 percent loss to the company.
Strategies for mitigating the challenges
While the challenges brought about by natural disasters cannot be managed, airports management can in one way, or another regulate woes especially those caused by human factors. According the regulations provided by the Federal Aviation Authority (FAA) and International Air Transport Association (IATA), airports have a mandate to provide efficient check-in services to the travellers. The airports are also supposed to provide adequate security personnel and screening facilities to ensure that the safety of the travellers is not put into jeopardy.
Risk management plan that defines strategies that the company should use in case of an adverse challenge such as potential damages likely to be caused by natural and human factors. One of the methods that the company should incorporate in the risk management plan is training the employees. Training the employees on various ways of preventing incidents as a result of human factors either psychological, social or physiological, emotional factors that could lead to errors is a step forward to reducing instances of safety concerns. In addition, the airports management should train their employees on the strategies they should use in case an unexpected woe hit the airport o as to avoid any possible public tension.
Adopting effective communication with the stakeholders is also an essential tool that the airport should use as a way of avoiding bad publicity. Informing the public on any possible financial crisis through effective provision of the financial statements helps the company to retain good public relations (Bai, 124). In addition, this helps the company to attain financial aid to finance new projects aimed at expanding eh airport premises. Hiding the information, on the other hand, could result to mistrust from the stakeholders thus affecting the business operations. Constant marketing is also an essential tool that enables airports to sell their services to new and existing customers.
Future of airport operations and economic contributions
Airport operations continue to face serious challenges especially due to the changing customer demands and technological advancements. New models of aircrafts require modification of runways and taxiways, and this means an additional expenditure to the airport shareholders. While the regulations continues pushing the airport industry to adopt measures that are sustainable to the environment such as using renewable sources of energy, airports have an obligations of adopting new techniques of satisfying the market requirements as they are essential for the companies’ growth (Bai, 234). Adopting extensive communication with the stakeholders as well as using extensive marketing strategies is among the strategies that will help the airports overcome the consequences of unexpected woes in the future. In addition, there is a need for the airports to be consistence with risk mitigation plans as a way of dealing with unexpected challenges.
Conclusion
Despite various natural, economical and human-caused woes affecting the airport industry, there is hope for future adjustments to achieve better financial returns to the shareholders as well as a better relationship with the stakeholders. All the airport industry need is a gradual change program that aims at dealing with one problem at a time to avoid high expenditure that could result to the company becoming bankrupt. Regardless of the woes, air transport is still the most preferred means of transport and thus, airports continue playing a vital role in economic growth and development.
Works Cited
Acharya, V. Restoring Financial Stability. NY: New York University, 2008.
Bai, Yong et al. Challenges and Advances in Sustainable Transportation Systems: Plan, Design, Build, Manage, and Maintain.NJ: ACSE, 2014.
Berry, Stevens & Jia, Panle. Tracing the Woes: An Emperical Analysis of the Airline Industry. American Economics Journal, Vol. 2, (1-43), 2010. Retrieved from http://economics.mit.edu/files/7763
Gosling, Stefan. & Upham, Paul. Climate Change and Aviation: Issues, Challenges and Solutions. NY: Routledge, 2012.
Hardaway, Robert. Airport Regulation, Law, and Public Policy: The Management and Growth of Infrastructure. NY: ABC-CLIO, 1991.
