The Name of the Class
The City and Date where it is located
Introduction
Operations management is a field of practice in management, which is concerned with strategizing and controlling the process of converting a business input into an output. This area majorly focuses on production, efficiency and customer satisfaction. The aviation industry has become one of the most important sectors of the economy in any country worldwide; this is because according to the Air Transport Action Group, over 3.1 billion passengers are carried by global airlines (Air Transport Action Group, 2016). Peaceful relations between different economies, technological advancement, trade and innovations among different economies can never exist without the existence of the aviation industry. This, therefore, calls for the practice of operations management in the airline industry to benefit all the stakeholders. There are approximately over 5000 airlines which are registered with IATA, this, therefore, calls for competition. Competitive advantage in these carriers depends on their operations management which includes client satisfaction and service delivery (IATA, 2016).
Reasons for operations management in the aviation sector
Recent advancement in the airline industries over the past few decades which includes improved communication and computation and also the reduction of cost and increasing revenues has led to the rise of customer satisfaction and general growth among the industry and its stakeholders (Abdelghany and Abdelghany, 2009). This means that the operations management within the aviation sector has improved significantly due to many reasons as stated below.
First, increasing customer expectations is one of the major reasons that have led to the advancement of operations management worldwide (Rosekind, 2006). Many consumers of a product have relied on the improvement of this product to meet their needs more efficiently. The same applies to the aviation industry. For this reason, the aviation industry has focused more on the soft product other than the hard product which is the airline itself (Greasley, 2008). This has been done by reducing the airline charges significantly throughout the past decades. Improvement of the hard product has been difficult because of the large expenses involved in the exercise making the payback period too long.
Growing pressure to reduce cost and improve operational efficiency is another reason operational management has been emphasized in the aviation sector. The aim of every business is to reduce cost and maximize profit (Flouris and Lock, 2008). The aviation industry has taken various actions to practice this by first, reducing the rate of fuel consumption. This is done through a method known as fuel hedging where the airline companies predict the future changes in the jet fuel and signs contract to lock the fuel price. This practice has been working in the United States as reported by an airline company known as Southwest airlines where it has saved over 3.5 billion dollars through fuel hedging and making enormous profits (Flouris and Oswald, 2006). Secondly, using one model of flight is another very helpful method to reduce cost. The company only buys and stocks spares for only one model of flight and also training for staff and pilots becomes cheaper since it involves one model of flight (Sheehan, 2003). This has been witnessed on the southwest airlines which have been able to save a lot of money on maintenance and repair (Castro and Lewis, 2011).
Operation management challenges in the aviation sector
Running a successful aviation industry has not been successful in the past few years. This is due to the emerging issues that affect the stakeholders in the industry which might include the rise of fuel, weather conditions and many other mentioned in Flouris and Oswald (2006). Though, there have been other major challenges that are facing the operations management in the aviation sector. According to IATA, there have been many challenges affecting the aviation industry which include;
First, improving efficiency is one of the main challenges that the aviation industry is facing. In any business improving efficiency to your clients is number one priority. This also happens in the aviation sector where airline delays have been the main problem which has been caused by procedures involved in checking the security measures and all the paperwork involved in the process (Richardson, 1977). Regarding efficiency, congestion is yet another significant challenge. Airports have to have to cope with the congestion and at the same time deal with securityorder to beat off their competitors.
Safety of the passengers is yet another major factor affecting the aviation industry globally. During travel, passengers have to feel safe and comfortable during their travel. According to research done by IATA in the year 2013 ascertains that there were 36.5 million flights throughout the year and 16 fatal accidents. These fatalities have posed to be a very great challenge in the aviation sector where the industry is ensuring to have as minimum fatalities as possible (O'Connell and Williams, 2011). This has been witnessed since according to the research, the chances of getting involved in an accident were one in 2.4 million passengers. Due to the rising rate of terrorism globally has paused to be a great threat to the industry since the safety of the passengers and the staff on board is at stake (Skift, 2014).
Finding, evaluation and employment of new staff have become a very big challenge for the airlines globally. The American Government has adopted new rules and regulations concerning the age of the pilots and issuing of new retirement dates. This has become an enormous blow to the aviation industry since 50% of the pilots in America are way much above the age of 50. Therefore, this calls for several recruitment of new staff and a lot of training to be done. This leads to wastage of funds and resources lugging the business behind (Castro and Lewis, 2011).
As far as developing countries and Africa, in general, is concerned, infrastructure has been one of the biggest challenges facing the aviation industry. African airports face a lot of infrastructural problems which includes poor and soft infrastructure, inadequate transit facilities and poor connectivity and making aviation in Africa to lag behind though many changes have been made in the past (Castro and Lewis, 2011).
Process of operations management in the aviation sector
Operations management in the air transport sector is divided into three phases which include the critical phase, planning phase and operations phase (Krajewski, Ritzman and Malhotra, 2007). The strategic phase is concerned with the long term plans of the airline industry or the aviation sector at large and involve a lot of monetary investment. The operations involved in this phase include growth and expansion, fleet sizing, merging with other airlines and forming partnership deals and finding out on the location of maintenance facilities (Castro and Lewis, 2011).
The planning phase starts by considering the forces of demand and supply which are the available airline resources (Slack, Chambers and Johnston, 2010). Secondly, a set of interrelated planning procedures is considered which include; flight assignment, aircraft routing, sales and marketing activities, crew scheduling, fleet assignment and time banking. This process goes for a month or a few months and goes on continuously.
The second phase of the operations management in the aviation sector is the operations phase. This phase is concerned with implementing the flight schedule and ensuring that all the operations are acting as they should be (Papatheodorou, 2005). For example, this phase ensures that there are no any flight delays or any stranded passengers, taking care of unanticipated incidences like poor weather conditions, recovering airline broken schedules and cancellations, compensating missing aircraft and replacing absent airline staff members and the crew.
Applications of operations management to gaining customers and competition
For an airline company to be successful and to gain a competitive advantage over the other airlines, it needs to have a different approach to operations management which other airline companies do not implement. Some of these management operations are as follows.
The management has to weigh its revenues and costs. For an airline to be said to be fruitful and profitable, the unit revenues must be higher than the unit costs. This can be done by regulating and determine the supply of services that the airline offers and coordinating the supply of those services alongside the management of the inputs required to supply the services which are the cost incurred (Doganis, 1985).
Customers or passengers arriving at their destinations on time may be one of the greatest satisfaction of any client. This, therefore, calls for the management to improvise on the schedule of the aircraft within the company. This includes recovering of flights that have been delayed or cancelled due to unavoidable circumstances like poor weather conditions, aircraft delays, security delays and aircraft breakdowns. The faster the company or airline handles the situation, the greater the competitive advantage over the other companies (Abdelghany and Abdelghany, 2009)
An airline company should also concentrate on its sales and contribution as one of its operation management tools to be profitable and gain competitive advantage(Wagener and Ison, 2014). This can be done through the company partnering with the travelling agents who are found all around the globe and help a lot in marketing and getting clients for the company (Peoples, 2012). It can also be done by using the current technology mainly by using the online ticketing system which has enabled many people to book tickets in a very easy way at the comfort of their houses. Sales agreement with other major businesses and promotion is also another important tool in enhancing sales in the airline company where the company uses big companies and start business promotions that will attract more clients and eventually increase sales (Abdelghany and Abdelghany, 2009).
Revenue management is yet another tool in the operations management that can be used to gain more customers from the market. This tool involves giving the client the right service at the right price. For example, there different types of travellers which can be the business travellers and the leisure travellers. The company has to find out which travellers bring more revenues to the company and what price should be charged on them(Abdelghany and Abdelghany, 2009).
References
Abdelghany, A. and Abdelghany, K. (2009). Modelling applications in the airline industry. Farnham, Surrey: Ashgate.
Atag.org, (2016). Facts & Figures - Air Transport Action Group (ATAG). [Online] Available at: http://www.atag.org/facts-and-figures.html [Accessed 9 Feb. 2016].
Castro, R. and Lewis, T. (2011). Corporate aviation management. Carbondale: Southern Illinois University Press.
Doganis, R. (1985). Flying off course. London: G. Allen & Unwin.
Flouris, T. and Lock, D. (2008). Aviation project management. Aldershot, England: Ashgate.
Flouris, T. and Oswald, S. (2006). Designing and executing strategy in aviation management. Aldershot, England: Ashgate.
Greasley, A. (2008). Operations management. Los Angeles: SAGE Publications.
Iata.org, (2016). IATA. [Online] Available at: http://www.iata.org/Pages/default.aspx [Accessed 9 Feb. 2016].
Krajewski, L., Ritzman, L. and Malhotra, M. (2007). Operations management. Upper Saddle River, N.J.: Pearson Prentice Hall.
O'Connell, J. and Williams, G. (2011). Air transport in the 21st century. Farnham, Surrey, England: Ashgate.
Papatheodorou, A. (2005). Towards sustainable aviation. Tourism Management, 26(2), pp.299-300.
Peoples, J. (2012). Pricing behaviour and non-price characteristics in the airline industry. Bingley, U.K.: Emerald.
Richardson, J. (1977). Essentials of aviation management. Dubuque, Iowa: Kendall/Hunt Pub. Co.
Rosekind, (2006). 'Alertness Management in Aviation Operations: Enhancing Performance and Sleep'. asem, 77(12).
Sheehan, J. (2003). Business and corporate aviation management. New York: McGraw-Hill.
Skift, (2014). 3 Biggest Challenges Facing the Global Aviation Industry. [Online] Available at: http://skift.com/2014/10/14/3-biggest-challenges-facing-the-global-aviation-industry/ [Accessed 9 Feb. 2016].
Slack, N., Chambers, S. and Johnston, R. (2010). Operations management. Harlow, England: Financial Times Prentice Hall.
Strategyand.pwc.com, (2016). 2015 Aviation Trends. [Online] Available at: http://www.strategyand.pwc.com/perspectives/2015-aviation-trends [Accessed 9 Feb. 2016].
Wagener, F. and Ison, D. (2014). Crew Resource Management Application in Commercial Aviation. Journal of Aviation Technology and Engineering, 3(2), p.02.
