American Airlines Group Review

Introduction

The airline industry has changed due to advanced technology over the last few decades. Currently, the largest airline is the American Airlines Group. In order for one to fully understand the history of airlines, it is crucial to first understand the history of the aeroplane. The first airplane was built in 1903 by the Wright brothers and since then, several companies have come up that offer different types of airplanes. Initially, airplanes were small in size and would also travel shorter distances.

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However, due to the technological advancement of the aviation industry, today, more planes fly further distances. Wong and Brooks (2015) note that the aviation industry became more prominent with the innovation of the airplane but it had been in existence for over 2000 years due to the concept of a simple kite. Hydrogen balloons are also considered as a critical factor in the initial growth of the aviation industry. In fact, balloons were commonly used during the American Civil War, long before the innovation of the airplane.

Suffices to mention, the continuous growth of the aviation industry is supported by technology. Today, planes are not only bigger in size but can also last longer on air due to technological advances in fuel consumption of aircrafts. Communication between airplanes and airports has also improved in the last decade. These improvements have led to lower accidents in the industry compared to the automobile and navy industries.

This essay looks into the different internal and external hazards that affect the industry. Additionally, an investigation on the safety and security of airplanes, and their impact on airports and other relevant organizations will be highlighted. The essay will tie all the information to the management and operation of airlines around the world.

Operation and Management of Airlines and Airports

Gupta (2018) argues that there are very few airlines that are making profit. This has been attributed to the fact that many airlines are also partly owned by governments. This is especially the case in Third World countries. There are many things that are considered in operation and management of airlines. For example, issues of scheduling, maintenance, staffing and management of networks all fall under the operations and management docket.

Indeed, poor management of airlines has led to accidents and even bankruptcy. An example of each can be given to explain further. On May 13 2019, a de Havilland Canada DHC-2 Beaver floatplane collided with a Taquan Air de Havilland Canada DHC-3 Turbine Otter floatplane in the US (Rosen, 2019). The crash was blamed on the airlines that were managing and operating the two floatplanes as it was caused by poor management of the network. On the same note, famous airlines such as Tower Air and Ansett Australia declared bankruptcy in 2000 and 2001 respectively due to poor management (Braithwaite, 2017).

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Notably, there are many stakeholders that have to be involved in decision making due to the size and the magnitude of operations management required in the aviation industry. For instance, apart from the airline, the airport management is also involved in the operational management of the industry. Other stakeholders in the industry include respective governing bodies, governments and meteorological departments. It is critical to point out that airlines and airports often have different managing bodies. This is due to the fact that airports normally host various airlines that are managed individually.

Internal Hazards and Threats to Airlines/Airports

There are several internal hazards and threats that can affect an airline. One of the major ones according to Wagner and Walton (2016) is the shortage of professional staff. Critically, staff in an airline are made up of pilots and co-pilots, hosts and hostesses, cleaners, cooks, and air marshals among others. These staff have to be well motivated and taken care of in order for them to fulfil their objectives effectively. Nodia and Stefes (2015) explain, through a study conducted, that over 59,000 airline and airport staffers agreed that they are overworked due to poor and insufficient staffing. This is a hazard/threat as overworked employees tend to make many mistakes.

Additionally, they are not motivated to ensure quality customer care and this leads to lower profit margins for the company. The issue of staff also affects the quality of service customers get when they are on-board the plane. Ideally, great customer service leads to client loyalty. Thus, airlines that suffer severe shortage of employees automatically also have less clients due to poor (anticipated) services.

Arguably, another internal hazard/threat to airlines is the use of aging technology in the aircrafts. This is ironical considering the fact that technology in the aviation industry has been growing at an impeccable speed. Peeters et al. (2016) explain that change and investment in new technology is often expensive. Often, a change in technology would also mean purchasing new aircrafts, which is also costly. Peeters et al. (2016) note that many airlines are particularly careful of the new technology as some have caused accidents. For instance, in March 2019, an Ethiopian Airlines, Boeing 737 Max 8, crashed in Ethiopia, killing all who were on board.

The crash was blamed on a new technological innovation that had been introduced by Boeing. A faulty sensor initiated the newly installed automated system that pushed the airplane’s nose down, which eventually led to the crash. The airline had to ground all its Boeing aircrafts after the crash as they had been replaced with new ones that had the same system. This means that they had invested in planes that they were too scared to use. Thus, they started recording losses despite being one of the most profitable airlines in the world.

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Additionally, system failures can also be described as an internal threat/hazard. Peeters et al. (2016) explain that the aviation industry relies heavily on systems. Today, many of these systems are online. However, there are some that can be operated offline. Like any other systems, aviation related software can encounter problems with the results having serious implications. The same example of the Ethiopian Airline Boeing 737 Max 8 can be used to explain this further.

The faulty software that was used in the airplane resulted in the crash. There are cases where systems hang while the plane was mid-air and resulted in emergency and “blinded” landing. Peeters et al. (2016) explain that the issue of system failure is more common that passengers know due to the fact that pilots are also trained to go manual when such incidences occur. Additionally, airline software and systems can be accessed from a ground location making it easier for management and all those involved to understand what has caused the failure. In turn, right actions can be taken to ensure safe flights.

External Hazards and Threats to Airlines/Airports

Apart from the internal hazards, airlines also have to be weary of external factors that might affect their profitability and ability to ensure safe flights. Currently, one of the major external factors affecting airlines is climate change. As mentioned previously, airlines work hand-in-hand with meteorological departments to ensure the weather is suitable for flying. Such information is usually given to the airlines weeks prior to ensure proper planning.

However, due to issues of climate change, airlines have recently been forced to fully rely on daily weather forecasts as they change all the time. Timmis et al. (2015) explain that there are areas that have been affected more by climate change than others. The knowledge of these countries and their immediate eco systems allows the aviation industry to predict the weather. An example of this can be drawn from the September 2018 crash of the chartered Let-410 UVP in Lake Yirol, which was caused by bad weather.

The issue of climate change goes hand-in-hand with the change in fuel pricing. It has become more expensive for the airlines to fuel their crafts. The oil and gas industry has been affected by the lower natural oil and gas reserves all over the world. This, coupled with the push to stop using by-products that harm the environment has led to an increase in fuel prices (McManners, 2016). Timmis et al. (2015) explain that environmentalists have lobbied for the reduction of carbon emission by fuel consuming innovations such as cars and airplanes. Whereas there are several companies that are currently producing vehicles that use clean energy, the same is yet to be replicated in the aviation industry.

It is also crucial to note that economic recession has affected the ability of people to take flights. It is interesting to note that despite the fact that less people are taking flights, more people are buying cars in the US. This makes it easier for people to drive to their destination as opposed to flying there. Additionally, whereas the larger population in the US, for example, is not able to fly constantly, the smaller wealthier population prefers to use their own chartered planes than fly commercial (MacLeod, 2017).

This has reduced the profitability of airlines. To ensure that the larger population is able to afford flying, many airlines around the world have come up with low cost options for their clients. MacLeod (2017) notes that many low cost airlines attract middle class people seeking to travel as they are very affordable. However, there have been some ethical concerns that have been raised over the same. One major ethical concern is the use of old aircrafts for the low-cost options. MacLeod (2017) explains that many airlines that have these options use their oldest crafts to achieve their mandate.

Last but not least, government involvement in aerospace is an external hazard/threat. As mentioned previously, governments hold several shares in some of the world’s largest airlines. Additionally, many countries have national airlines that are also partly owned by their governments. Stolzer, Halford and Goglia (2017) argue that if an airline is owned by a government (majority shareholder) then other types of bureaucracies might affect the profitability of the institution.

For example, there are countries where people who work for government do not get charged when they use the national airlines and so forth. This external threat can only be eliminated with policies. Issues of international relations can also affect an airlines ability to fly in other zones (Stolzer, Halford & Goglia, 2017). Countries that are at war, such as India and Pakistan, closely monitor each other’s aerospace activities in case of an attack. This negatively affects airlines that fly to those regions.

Impact of Internal and External Hazards and Threats to Airlines/Airports

The mentioned internal and external hazards and threats pose different challenges and opportunities to airlines and airports. This section of the essay looks into the impact these hazards have on the airlines. One of the impacts as insinuated is the lower profit margins that the airlines are currently recording. Both the internal and external factors contribute to this impact. For example, poor staffing, which is an internal hazard/threat, can lead to poor customer service. This, in turn, leads to fewer clients and lower profits. On the same note, the rising cost of fuel in the world increases the cost of doing business for the airlines. This makes it harder for the airlines to make profit because if they increase the cost per flight, they will lose clients. Yet, they also cannot operate with a high cost of business.

A significant impact of the threats and hazards is the plane crashes. The loss of life and property that has already been witnessed in different parts of the world has been due to some of the mentioned hazards. For example, the Ethiopian Airline, Boeing 737 Max 8 crashed and killed all people on board due to faulty technology. It is arguable that airline crashes are highly preventable. Proper maintenance, professional and skilled staff and a positive work environment are critical in ensuring the safety of passengers during flights. Whereas airplane crashes are not common, there are other minor mishaps that happen within the airports that can also be reduced if the mentioned hazards are dealt with.

For example, there are several cases of airplanes making emergency landings due to one issue or the other. Many times, these issues revolve around system failures or bad weather. Additionally, there are flights that delay take-off times due to system failures.

Thirdly, a significant impact of the internal and external hazards is a negative public perception of an affected airline. This is especially the case when the hazards result in crashes. The issue of branding is important in the aviation industry. This is due to the perceived danger of flying. Indeed, as Zotova (2017) notes, many of the airlines that have had crashes have struggled to regain a favourable position in the market due to the negative perception people have of them.

Apart from crushes, other things that create public perception of airlines include the size of the aircrafts, how old their airplanes are, and customer service both outside (in the airport) and inside the plane. Airlines that have had crashes take time to investigate the cause in order to prevent it from happening in future. Sometimes, the fault lies with the management of the plane. This is especially the case if the plane is poorly maintained, such as the case of the Piper Malibu aeroplane that crashed killing Emiliano Sala, a footballer, and his pilot David Ibbotson.

Other times, the fault lies with the manufacturers of the plane as in the case of the previously mentioned Ethiopian Airlines, Boeing 737 Max 8 crash. Additionally, there are times when the impact is caused by other stakeholders’ fault. For example, the mentioned Let-410 UVP that crashed in Lake Yirol due to bad weather, yet, they had been advised by the meteorological department on what to expect.

Safety and Security Risks

Each of the discussed threat/hazards causes a safety and security risk to the organisation. Analysing the staffing issues for example, one can argue that general airport security can be threatened by the overworked and few staff in the organization. This is further propelled by the current terror threats, with the most memorable being the 9/11 attacks. There are various ways in which such attacks can be mitigated and lowered in the aviation industry. For instance, professional air marshals and other airport/airline staff would be able to not only identify but also disarm any terrorists trying to get into a plane.

Taking the case of 9/11, all the four planes were hijacked from the inside. This means that the terrorists were able to board the plane with their weapons. Regardless of how this was possible considering, it is arguable that it was preventable. Today, more airports and airlines have taken a keen interest in ensuring an attack like 9/11 does not happen again. The fact that airline employees are overworked might, however, pose a security threat. This is because they might be too tired to carefully check the people boarding the flights.

Secondly, the perception that aviation is a high level target is a constant security risk. This premise refers to the fact that many countries also use aviation in their warfare. For example, recently, Israel attacked the Hamas sites with aero devices leaving several injured (“Israel strikes”, 2019). This was a counter attack for Hamas’ attack on Israel that led to the latter using drones to shoot down missiles.

Also mentioned, hot air balloons were used during the American Civil War. This goes to show that the aviation industry has always been seen as a high value target for warfare. The additional target of airplanes by terrorist groups makes security a critical element of aviation. There are several ways the industry has used to mitigate this security threat. The most viable strategy is having good relations with the different countries that the airline travels to constantly. Indeed, airlines are businesses, thus, are an investment in any country’s economy. Using proper channels, and through dialogue, issues of international relations and diplomacy will not affect the safety of an airline.

Notably, all the mentioned security threats can be mitigated. Despite the challenges the aviation industry has faced so far, strategies that position the sector as an income producing field have been used to lower anticipated security risks. Indeed, there are companies that have gone bankrupt due to these discussed risks. However, a majority of the companies that have been negatively affected have been bought out by other aviation companies to ensure growth of the industry.

Conclusion

In conclusion, the aviation industry has been in existence for over 2000 years. Initially, the sector used kites and later on, hot air balloons to progress. Today, the industry is characterised by technological aircrafts that are safer, more stable and faster. Despite the growth of the industry, there are several internal and external issues that affect the profitability of individual airlines or airports. For example, technology has led to great innovations within the aviation industry, yet, is still identified as an internal threat/hazard.

One main reason for this is the fact that there have been cases of technology failure in aircrafts. An external hazard that can be highlighted is the rising cost of fuel. This has led to many airlines increasing their ticket costs in order to record profits. These internal and external hazards and threats have in the past impacted the industry negatively. The most significant impact of these threats is the loss of life and property. It is unfortunate that almost all airline crashes are fatal and this is one of the reason why safety and security is critical in the industry.

There are other factors that one has to consider when deliberating safety and security in airlines. For example, the ability of the staff to identity and disarm a terrorist has become a crucial skill. This is due to the fact that airlines have become a high value target for both terrorists and countries in conflict. Such security threats can be mitigated in various ways. For instance, more airlines are recruiting flight marshals to ensure that passengers feel more secure during their flight. Additionally, more staff have been trained and instructed on how to handle situations that threaten their own and the passengers’ safety. Overall, the airline industry is one of the largest sectors in the world. Not only has the industry grown in size but also in revenue.

References

(2019). Israel strikes Islamic Jihad positions following rockets launched from Gaza after cease-fire. Haaretz. Web.

Braithwaite, R. G. (2017). Attitude or latitude? Australian aviation safety. London, UK: Routledge.

Gupta, H. (2018). Evaluating service quality of airline industry using hybrid best worst method and VIKOR. Journal of Air Transport Management, 68(2018), 35-47.

MacLeod, N. (2017). Building safe systems in aviation. New York, NY: Routledge.

McManners, J. P. (2016). Developing policy integrating sustainability: A case study into aviation. Environmental Science & Policy, 57(2016), 86-92.

Wong, S., & Brooks. N. (2015). Evolving risk-based security: A review of current issues and emerging trends impacting security screening in the aviation industry. Journal of Air Transport Management, 48(2015), 60-64.

Wagner, M. S., & Walton, O. R. (2016). Additive manufacturing’s impact and future in the aviation industry. Production Planning & Control: The Management of Operations, 27(13), 1124-1130.

Nodia, G., & Stefes, H. C. (2015). Security, democracy and development in the southern Caucasus and the Black Sea region. Kyiv, Ukrain: Black Sea Lowland.

Peeters, P., Higham, J., Kutzner, D., Cohen, S., & Gössling, S. (2016). Are technology myths stalling aviation climate policy? Transportation Research Part D: Transport and Environment, 44, 30-42.

Rosen, Y. (2019). At least 3 dead in mid-air seaplane crash in Alaska, but 10 survive. The Independent. Web.

Stolzer, J. A., Halford, D. C., & Goglia, J. J. (2017). Safety management systems in aviation. New York, NY: Routledge.

Timmis, A.J., Hodzic, A., Koh, L., Bonner, M., Soutis, C., Schäfer, W. A., & Dray, L. (2015). Environmental impact assessment of aviation emission reduction through the implementation of composite materials. International Journal of Life Cycle Assessment, 20(2), 233-243.

Zotova, I. (2017). Post-crash airline pricing: A case study of Alaska Airlines Flight 261. Economics of Transportation, 10(C), 18-22.

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