Flybe vs Ryanair Company Review Paper

Flybe vs Ryanair Company Review
Flybe vs Ryanair Company Review

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Flybe vs Ryanair Company Review

Introduction

Flybe Group Plc is a company that is in the airline business. This organization came to existence in the year 1979. Flybe Group Plc was initiated when two companies, Intra Airways and Express Air Services came together for business (Flybe, 2015). It is worth noting that this company operates in many places and has a number of subsidiaries. This company has its domicile in Exeter and is known to be quite affordable since its cost is set at the lowest levels possible.

Interestingly, Flybe Group Plc has been able to make its name as the regional airline to go for despite the presence of many others. The company has been able to trade in the London Stock Exchange with other listed companies (London Stock Exchange, 2015).

Current performance

Currently, the performance of the company is worse than that of the previous year. From the income statement, it is quite clear that the group’s revenue dipped from 620.5 million pounds to 574.1 million pounds. This means that the group has not been able to generate as much revenue as it did in the year that ended in March 2014.

Compared to another player in the same industry revenue wise; Ryanair, the performance of Flybe Group Plc is bad. This is because from the income statement of Ryanair, the total revenue is seen to have increased from 5.036.7 million pounds for the year ended 31st March 2014 to 5,654.0 million pounds attained in the year ended 31st March 2015. This shows that Ryanair was able to generate more revenue than Flybe Group Plc.

Looking at the income results of the company in the year ended 31st March 2015, an operating loss of 12.7 million pounds was realized (Flybe, 2015). This is a very bad situation for the company bearing in mind that a profit was realized in the year that was closed on the 31st day of March 2014. It is worth noting that Flybe Group Plc realized 1.3 million pounds in terms of profit in the year that was closed on 31st March, 2016. This shows a very worrying movement in the profitability of this company.

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In terms of profitability, Ryanair seems to have recorded a very high increase in its operating profit in the year that ended on 31st March 2015. In this year, Ryanair managed to realize an operating profit of 1,042.9 million pounds against 658.6 million pounds recorded in the year closed on 31st March 2014. This shows a very significant increase in the level of operating profitability unlike the case of Flybe Group Plc where a loss was recorded. Under this circumstance, it is reasonable to point out that the Ryanair has a bigger capacity of growth than Flybe Group Plc.

Liquidity

Liquidity of an organization refers to the ability to translate the available assets into cash. The liquidity of a company is always determined by looking at the ease with which a company is able or has been able to avail cash from most of its assets. To determine the liquidity of Flybe Group Plc, it is necessary to come up with the liquidity ratios of the company. The calculation of the liquidity ratios for Flybe Group Plc will focus on the year closed on 31st March, 2014 compared to the year ended 31st March 2015. Some of the liquidity ratios include current ratio, cash ratio, working capital and quick ratio.

Current Ratio

The current ratio of an organization is obtained by getting a division of the current assets by the current liabilities (Robert, 2010). For Flybe Group Plc, the current ratio for the years ended on the 31st day of 2015 and 2014 are as follows.

YearRatioCurrent AssetsCurrent Liabilities Ratio 
2015Current308.3257.2      1.20
2014Current304.8216.4      1.41

From the above schedule, it is evident that the liquidity of Flybe Group Plc in the year ended on 31st March 2015 is lower than the previous year. This is because the liquidity dropped from 1.41 to 1.20.

The current ratio for Ryanair, a competitor in the industry is as follows;

YearRatioCurrent AssetsCurrent Liabilities Ratio 
2015Current5,742.003,346.00           1.72
2014Current3,444.302,274.50           1.51

From this calculation, it is evident that Ryanair was able to have a higher current ratio in the year ended 2015 than the previous year. This is not the case with the current ratio obtained by Flybe Group Plc. From the calculation of current ratio of Flybe Group Plc, it is seen that there is a decrease in the current ratio obtained in the year ended 2014 from 1.41 to 1.2 calculated for the year ended 31st March 2015.

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Net Working capital ratio

This liquidity ratio is used in measuring by what level the current assets are when compared to the current liabilities, in the absence of cash. This means that the net working capital ratio is used in measuring the excess of current assets as compared to the current liabilities. It is obtained by dividing the current assets less cash by the current liabilities of an organization. The current ratios of Flybe Group Plc for the years ending 31st March of 2014 and 2015 respectively are as follows.

YearRatioCurrent Assets-cashCurrent Liabilities Ratio 
2015Working capital130.4257.2       0.51
2014Working capital126.9216.4       0.59

Compared to the year ended 31st March 2014, the networking capital is seen to have gone down showing negative movement of the company’s ability to take care of current liabilities.

For the net working capital ratio for Ryanair, the calculation is as below;

YearRatioCurrent Assets-cashCurrent Liabilities Ratio 
2015Working capital4557.4257.2         17.72
2014Working capital1714.2216.4           7.92

These calculations for Ryanair show that there is a very significant increase in the net working capital obtained in the year 2014 compared to that obtained in the year ended 31st March 2015. In the year ended 2014, Ryanair had a net working capital ratio of 7.92, while in the year ended 2015 it increased upto 17.72.

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Liquidity comparison with competitor (Ryanair) based on current ratio and networking capital

Quick ratio

This is a liquidity ratio that is used to derive an organizations muscle towards taking care of its short-term liabilities through the utilization of the current assets that can be converted into cash quickly (Aalst & Wil 2011). Therefore, stock is reduced from the current assets amount that is used in dividing by the current liabilities. Therefore, the formulae for quick ratio is (current assets-stock)/current liabilities. The quick ratio for Flybe Group Plc is as follows

YearRatioCurrent Assets-stockCurrent Liabilities Ratio 
2015Quick ratio301.2257.2       1.17
2014Quick ratio298216.4       1.38

From the above calculation, it is clear that the quick ratio in the year ended 31st March 2014 is higher than that of the year ended 31st March 2015. This shows that Flybe Group Plc’s capability in the previous year was better, a situation that reflects poor ability of the company.

For Ryanair, the quick ratios for the two years ended 31st March 2014 and 2015 respectively are as follows;

YearRatioCurrent Assets-stockCurrent Liabilities Ratio 
2015Quick ratio5739.93346           1.72
2014Quick ratio3441.82274.5           1.51

From the schedule above, Ryanair is seen to have made an increase in its quick ratio from 1.51 in the year ended 2014 to 1.72 in the year closed in 2015 (Ryanair, 2015). This is not the case with the quick ratio of Flybe Group Plc where the quick ratio dropped from 1.38 to 1.17.

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Profitability Ratio analysis

Profitability ratios are usually used in finding out how the assets of an organization have been employed in the process of generating profit (Papadopoulos, 2011). This is a very good ratio in the analysis of an organization financially. This is because all businesses are set up for the purpose of generating some considerable gain after a given period of time.

Gross profit margin

This is a ratio calculated through the division of the gross profit of an organization with the net sales recorded. For Flybe Group plc, the gross profit margin ratios for the years ended 31st March 2014 and 2015 respectively are as follows;

YearRatioGross profitNet Sales Ratio 
2015Gross profit Margin-12.7574.1       (0.022)
2014Gross profit Margin-1.5620.5       (0.002)

From the above calculation of gross profit margin, it is evident that it is negative for both years. However, the gross profit margin for the year ended march 2015 is poor than that of the previous year.

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For Ryanair, the gross profit margin is as follows

YearRatioGross profitNet Sales Ratio 
2015Gross profit Margin982.46073.00.2
2014Gross profit Margin591.45654.00.1

Comparatively, Flybe Public Plc is seen to have posted poor results in terms of profitability compared to Ryanair. In the year ended 31st March 2015, Flybe Group Plc had a gross profit margin of (0.022) while Ryan air had 0.2. This shows that in terms of gross profit in relation to sales, Ryan air had a good level of gain.

Company Review Findings and conclusions

From the ratio analysis for Flybe Group Plc, several findings come up. Firstly, the decrease In the current ratio of Flybe Group Plc in the year ended March 2015 shows that the company’s ability to take care of the current liabilities decreased. This means that Flybe Group Plc has to look for alternative ways of raising funds in case there is need to pay for current liabilities. With current ratio, the higher the ratio the better for a company since it means that the ability to take care of its current liabilities is stronger (Rajasekeran, 2012).

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With net working capital ratio, the higher the ratio, the better for a company. A higher ratio means that a company is able to convert its current assets into cash and finance its current liabilities in the absence of ready cash (Kaplan, 2011). In the case of Flybe Group Plc, the net working ratio is seen to have dropped from 0.59 to 0.51 in the year ended 31st March 2015.

This means that the company’s ability to finance its current liabilities from other current assets in exclusion of cash got weaker. According to Tracy (2012), a good performing company is able to handle current liabilities even without using its cash.

In the year ended 31st March 2015, the gross profit Margin for Flybe Group Plc went down compared to what was realized in the year ended 31st March 2014. This means that the company’s use of its assets for profit generation went down. With poor profitability, it means that a company cannot grow properly.

After the analysis and findings, it is reasonable to state the position of Flybe Group Plc in the industry. Firstly, its performance is poor compared to previous year. Secondly, the company’s performance compared to that of a competitor in the industry is very poor. Therefore, the management of Flybe Group Plc should come up with strategies of improving the performance of the company.

One of the things that the management should look for is the use of information technology. According to Proctor (2011), information technology is one tool that is capable of bringing improvement in performance of an organization. This is supported by Pathak (2014) who says that the information technology is important in many areas of a business including auditing. Additionally, coming up with strategies that support improvement is always an important aspect in business (Thompson, 2014).

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Conclusion

According to Gray et al. (2011), a company review is a very important activity for organizations. This is because it gives an organization an opportunity of looking at the way its performance is moving. For example, the analysis of the financial performance of Flybe Group Plc has shown how poor the performance is compared with the previous year and Ryanair which is a competitor in the industry.

From the analysis, Flybe Group Plc has been able to post poor results in the year ended 31st March 2015 compared to what was attained in the year ended 31st March 2014. Additionally, compared with Ryanair, the performance of the company is also poor. Ryanair is seen to be posting financial results which are likely to catapult the company to great heights. For better analysis of a company, financial ratios are very useful (Debarrshi, 2012).

This is because the financial ratios bring about various aspects of a business as reflected in their different levels. When carrying out a company review, it is important to carry out comparisons for different years of operations. Additionally, it is good to understand the position of a company within a particular industry.

Comparison with other players in the industry is necessary since it ensures that a company understands how the performance is compared to that of other players. Keller and Price (2013) point out that industry comparison enables a company carry out improvements and corrections so that there may be creation of competitive edge in the industry or market.

References

Aalst, V.& Wil M.P., (2011), Process Mining: Discovery, Conformance and Enhancement of Business Processes, Springer

Debarrshi, B. (2012), Management Accounting, Pearson Education India

Flybe (2015), Annual report-Flybe, Retrieved from https://www.flybe.com/corporate/investors/2014/annual-results-2014/Flybe-Group-plc-Annual-Report-2013-14.pdf, (Last accessed 15th March 2016)

Gray, S., Salter, S., & Radebaugh, L. (2011). Global accounting and control: A managerial emphasis. New York: Wiley.

Kaplan, Robert S. and Bruns, W. (2011), Accounting and Management: A Field Study Perspective, Harvard Business School Press.

Keller, S. & Price, C. (2013), Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage, John Wiley & Sons.

London Stock Exchange (2015) Listed Companies, Retrieved from https://www.google.com/?gws_rd=ssl#q=london+stock+exchange+listed+companies+flybe+group+plc, Last accessed (Last accessed 15th March 2016)

Papadopoulos, P. (2011), Investment Report – Fundamental Analysis/ Ratio Analysis, Grin Verlag

Pathak, J. (2014), Information Technology Auditing:An evolving agenda, Willey Publishers, Springer

Proctor, K (2011), Optimizing and Assessing Information Technology: Improving Business Project Execution, John Wiley & Sons

Rajasekeran, P. (2012), Financial Accounting, Pearson Education India

Robert, L. (2010), Ratios Made Simple: A beginner’s guide to the key financial ratios, Harriman House Ltd.

Ryanair (2015) Retrieved from https://investor.ryanair.com/wp-content/uploads/2015/07/Annual-Report-2015.pdf, last accessed (Last accessed 15th March 2016)

Thompson,JL. (2014). Understanding Corporate Strategy. Cengage Learning Chew, L. & Parkinson, A. (2013), Making Sense of Accounting for Business, Harlow: Pearson

Tracy, A. (2012), Ratio Analysis Fundamentals: How 17 Financial Ratios Can Allow You to Analyze Any Business In The World, Ratioanalysis.net

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Flybe Group Plc In Comparison With Ryanair: Company Review

Flybe Group Plc In Comparison With Ryanair
Flybe Group Plc In Comparison With Ryanair

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Flybe Group Plc In Comparison With Ryanair

Company Review

Introduction

Flybe Group Plc is a company that is in the airline business. This organization came to existence in the year 1979. Flybe Group Plc was initiated when two companies, Intra Airways and Express Air Services came together for business (Flybe, 2015). It is worth noting that this company operates in many places and has a number of subsidiaries. This company has its domicile in Exeter and is known to be quite affordable since its cost is set at the lowest levels possible.

Interestingly, Flybe Group Plc has been able to make its name as the regional airline to go for despite the presence of many others. The company has been able to trade in the London Stock Exchange with other listed companies (London Stock Exchange, 2015).

Current performance

Currently, the performance of the company is worse than that of the previous year. From the income statement, it is quite clear that the group’s revenue dipped from 620.5 million pounds to 574.1 million pounds. This means that the group has not been able to generate as much revenue as it did in the year that ended in March 2014.

Compared to another player in the same industry revenue wise; Ryanair, the performance of Flybe Group Plc is bad. This is because from the income statement of Ryanair, the total revenue is seen to have increased from 5.036.7 million pounds for the year ended 31st March 2014 to 5,654.0 million pounds attained in the year ended 31st March 2015. This shows that Ryanair was able to generate more revenue than Flybe Group Plc.

Looking at the income results of the company in the year ended 31st March 2015, an operating loss of 12.7 million pounds was realized (Flybe, 2015). This is a very bad situation for the company bearing in mind that a profit was realized in the year that was closed on the 31st day of March 2014. It is worth noting that Flybe Group Plc realized 1.3 million pounds in terms of profit in the year that was closed on 31st March, 2016. This shows a very worrying movement in the profitability of this company.

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In terms of profitability, Ryanair seems to have recorded a very high increase in its operating profit in the year that ended on 31st March 2015. In this year, Ryanair managed to realize an operating profit of 1,042.9 million pounds against 658.6 million pounds recorded in the year closed on 31st March 2014. This shows a very significant increase in the level of operating profitability unlike the case of Flybe Group Plc where a loss was recorded. Under this circumstance, it is reasonable to point out that the Ryanair has a bigger capacity of growth than Flybe Group Plc.

Liquidity

Liquidity of an organization refers to the ability to translate the available assets into cash. The liquidity of a company is always determined by looking at the ease with which a company is able or has been able to avail cash from most of its assets. To determine the liquidity of Flybe Group Plc, it is necessary to come up with the liquidity ratios of the company. The calculation of the liquidity ratios for Flybe Group Plc will focus on the year closed on 31st March, 2014 compared to the year ended 31st March 2015. Some of the liquidity ratios include current ratio, cash ratio, working capital and quick ratio.

Current Ratio

The current ratio of an organization is obtained by getting a division of the current assets by the current liabilities (Robert, 2010). For Flybe Group Plc, the current ratio for the years ended on the 31st day of 2015 and 2014 are as follows.

YearRatioCurrent AssetsCurrent Liabilities Ratio 
2015Current308.3257.2      1.20
2014Current304.8216.4      1.41

From the above schedule, it is evident that the liquidity of Flybe Group Plc in the year ended on 31st March 2015 is lower than the previous year. This is because the liquidity dropped from 1.41 to 1.20.

The current ratio for Ryanair, a competitor in the industry is as follows;

YearRatioCurrent AssetsCurrent Liabilities Ratio 
2015Current5,742.003,346.00           1.72
2014Current3,444.302,274.50           1.51

From this calculation, it is evident that Ryanair was able to have a higher current ratio in the year ended 2015 than the previous year. This is not the case with the current ratio obtained by Flybe Group Plc. From the calculation of current ratio of Flybe Group Plc, it is seen that there is a decrease in the current ratio obtained in the year ended 2014 from 1.41 to 1.2 calculated for the year ended 31st March 2015.

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Net Working capital ratio

This liquidity ratio is used in measuring by what level the current assets are when compared to the current liabilities, in the absence of cash. This means that the net working capital ratio is used in measuring the excess of current assets as compared to the current liabilities. It is obtained by dividing the current assets less cash by the current liabilities of an organization. The current ratios of Flybe Group Plc for the years ending 31st March of 2014 and 2015 respectively are as follows.

YearRatioCurrent Assets-cashCurrent Liabilities Ratio 
2015Working capital130.4257.2       0.51
2014Working capital126.9216.4       0.59

Compared to the year ended 31st March 2014, the networking capital is seen to have gone down showing negative movement of the company’s ability to take care of current liabilities.

For the net working capital ratio for Ryanair, the calculation is as below;

YearRatioCurrent Assets-cashCurrent Liabilities Ratio 
2015Working capital4557.4257.2         17.72
2014Working capital1714.2216.4           7.92

These calculations for Ryanair show that there is a very significant increase in the net working capital obtained in the year 2014 compared to that obtained in the year ended 31st March 2015. In the year ended 2014, Ryanair had a net working capital ratio of 7.92, while in the year ended 2015 it increased upto 17.72.

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Liquidity comparison with competitor (Ryanair) based on current ratio and networking capital

Quick ratio

This is a liquidity ratio that is used to derive an organizations muscle towards taking care of its short-term liabilities through the utilization of the current assets that can be converted into cash quickly (Aalst & Wil 2011). Therefore, stock is reduced from the current assets amount that is used in dividing by the current liabilities. Therefore, the formulae for quick ratio is (current assets-stock)/current liabilities. The quick ratio for Flybe Group Plc is as follows

YearRatioCurrent Assets-stockCurrent Liabilities Ratio 
2015Quick ratio301.2257.2       1.17
2014Quick ratio298216.4       1.38

From the above calculation, it is clear that the quick ratio in the year ended 31st March 2014 is higher than that of the year ended 31st March 2015. This shows that Flybe Group Plc’s capability in the previous year was better, a situation that reflects poor ability of the company.

For Ryanair, the quick ratios for the two years ended 31st March 2014 and 2015 respectively are as follows;

YearRatioCurrent Assets-stockCurrent Liabilities Ratio 
2015Quick ratio5739.93346           1.72
2014Quick ratio3441.82274.5           1.51

From the schedule above, Ryanair is seen to have made an increase in its quick ratio from 1.51 in the year ended 2014 to 1.72 in the year closed in 2015 (Ryanair, 2015). This is not the case with the quick ratio of Flybe Group Plc where the quick ratio dropped from 1.38 to 1.17.

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Profitability Ratio analysis

Profitability ratios are usually used in finding out how the assets of an organization have been employed in the process of generating profit (Papadopoulos, 2011). This is a very good ratio in the analysis of an organization financially. This is because all businesses are set up for the purpose of generating some considerable gain after a given period of time.

Gross profit margin

This is a ratio calculated through the division of the gross profit of an organization with the net sales recorded. For Flybe Group plc, the gross profit margin ratios for the years ended 31st March 2014 and 2015 respectively are as follows;

YearRatioGross profitNet Sales Ratio 
2015Gross profit Margin-12.7574.1       (0.022)
2014Gross profit Margin-1.5620.5       (0.002)

From the above calculation of gross profit margin, it is evident that it is negative for both years. However, the gross profit margin for the year ended march 2015 is poor than that of the previous year.

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For Ryanair, the gross profit margin is as follows

YearRatioGross profitNet Sales Ratio 
2015Gross profit Margin982.46073.00.2
2014Gross profit Margin591.45654.00.1

Comparatively, Flybe Public Plc is seen to have posted poor results in terms of profitability compared to Ryanair. In the year ended 31st March 2015, Flybe Group Plc had a gross profit margin of (0.022) while Ryan air had 0.2. This shows that in terms of gross profit in relation to sales, Ryan air had a good level of gain.

Company Review Findings and conclusions

From the ratio analysis for Flybe Group Plc, several findings come up. Firstly, the decrease In the current ratio of Flybe Group Plc in the year ended March 2015 shows that the company’s ability to take care of the current liabilities decreased. This means that Flybe Group Plc has to look for alternative ways of raising funds in case there is need to pay for current liabilities. With current ratio, the higher the ratio the better for a company since it means that the ability to take care of its current liabilities is stronger (Rajasekeran, 2012).

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With net working capital ratio, the higher the ratio, the better for a company. A higher ratio means that a company is able to convert its current assets into cash and finance its current liabilities in the absence of ready cash (Kaplan, 2011). In the case of Flybe Group Plc, the net working ratio is seen to have dropped from 0.59 to 0.51 in the year ended 31st March 2015.

This means that the company’s ability to finance its current liabilities from other current assets in exclusion of cash got weaker. According to Tracy (2012), a good performing company is able to handle current liabilities even without using its cash.

In the year ended 31st March 2015, the gross profit Margin for Flybe Group Plc went down compared to what was realized in the year ended 31st March 2014. This means that the company’s use of its assets for profit generation went down. With poor profitability, it means that a company cannot grow properly.

After the analysis and findings, it is reasonable to state the position of Flybe Group Plc in the industry. Firstly, its performance is poor compared to previous year. Secondly, the company’s performance compared to that of a competitor in the industry is very poor. Therefore, the management of Flybe Group Plc should come up with strategies of improving the performance of the company.

One of the things that the management should look for is the use of information technology. According to Proctor (2011), information technology is one tool that is capable of bringing improvement in performance of an organization. This is supported by Pathak (2014) who says that the information technology is important in many areas of a business including auditing. Additionally, coming up with strategies that support improvement is always an important aspect in business (Thompson, 2014).

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Conclusion

According to Gray et al. (2011), a company review is a very important activity for organizations. This is because it gives an organization an opportunity of looking at the way its performance is moving. For example, the analysis of the financial performance of Flybe Group Plc has shown how poor the performance is compared with the previous year and Ryanair which is a competitor in the industry.

From the analysis, Flybe Group Plc has been able to post poor results in the year ended 31st March 2015 compared to what was attained in the year ended 31st March 2014. Additionally, compared with Ryanair, the performance of the company is also poor. Ryanair is seen to be posting financial results which are likely to catapult the company to great heights. For better analysis of a company, financial ratios are very useful (Debarrshi, 2012).

This is because the financial ratios bring about various aspects of a business as reflected in their different levels. When carrying out a company review, it is important to carry out comparisons for different years of operations. Additionally, it is good to understand the position of a company within a particular industry.

Comparison with other players in the industry is necessary since it ensures that a company understands how the performance is compared to that of other players. Keller and Price (2013) point out that industry comparison enables a company carry out improvements and corrections so that there may be creation of competitive edge in the industry or market.

References

Aalst, V.& Wil M.P., (2011), Process Mining: Discovery, Conformance and Enhancement of Business Processes, Springer

Debarrshi, B. (2012), Management Accounting, Pearson Education India

Flybe (2015), Annual report-Flybe, Retrieved from https://www.flybe.com/corporate/investors/2014/annual-results-2014/Flybe-Group-plc-Annual-Report-2013-14.pdf, (Last accessed 15th March 2016)

Gray, S., Salter, S., & Radebaugh, L. (2011). Global accounting and control: A managerial emphasis. New York: Wiley.

Kaplan, Robert S. and Bruns, W. (2011), Accounting and Management: A Field Study Perspective, Harvard Business School Press.

Keller, S. & Price, C. (2013), Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage, John Wiley & Sons.

London Stock Exchange (2015) Listed Companies, Retrieved from https://www.google.com/?gws_rd=ssl#q=london+stock+exchange+listed+companies+flybe+group+plc, Last accessed (Last accessed 15th March 2016)

Papadopoulos, P. (2011), Investment Report – Fundamental Analysis/ Ratio Analysis, Grin Verlag

Pathak, J. (2014), Information Technology Auditing:An evolving agenda, Willey Publishers, Springer

Proctor, K (2011), Optimizing and Assessing Information Technology: Improving Business Project Execution, John Wiley & Sons

Rajasekeran, P. (2012), Financial Accounting, Pearson Education India

Robert, L. (2010), Ratios Made Simple: A beginner’s guide to the key financial ratios, Harriman House Ltd.

Ryanair (2015) Retrieved from https://investor.ryanair.com/wp-content/uploads/2015/07/Annual-Report-2015.pdf, last accessed (Last accessed 15th March 2016)

Thompson,JL. (2014). Understanding Corporate Strategy. Cengage Learning Chew, L. & Parkinson, A. (2013), Making Sense of Accounting for Business, Harlow: Pearson

Tracy, A. (2012), Ratio Analysis Fundamentals: How 17 Financial Ratios Can Allow You to Analyze Any Business In The World, Ratioanalysis.net

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Alaska Airline; Airline Operations Research Paper

Alaska Airline
Alaska Airline

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Alaska Airline; Airline Operations

Introduction

The airline sector has experienced remarkable development and international expansion in the previous decade. Aviation is important not just national but also international business development and provides vital socioeconomic benefits. The considerable growth is attributable for various factors including; deregulation of aviation laws  and bilateral agreements among governments; growing demand as a result of quality services putting pressure on airfares thus reduce costs of travel.

In addition, there is intense competition between airline and globalization, which has contributed to the growth of the air transport with international business and tourism that has greatly facilitated the aviation flight sector. The 1978 aviation deregulation act presents new opportunities for airline’s leading to expansion of the aviation sector (Suganthlakshmi, 2011). Such expansion has also led to intense competition, in turn contributing in air disputes. The sector has been forced to restructure its operations to remain sustainable while focusing on airlines. The paper evaluates the strategic analysis of the Alaska Airline and the structure of decision making.

Part One

 In the landing slot auctions how much contribution did your airline make?

In the Hong Kong arrival slot auction, Alaska airline was in the 3rd slot, which represented full-service operations. The auction was performed for 3 days while about eight landing slots were auctioned to the highest dealer.  This means that, the airline contributed a total of USD 49,796,250, with investments of approximately $ 1,75,00,00,007 and return on investment (ROI) of 28%. During the auction, a total of USD 6b was invested while Alaska invested USD 1,750,000,007 that earned 1, 4, and 6 landing slots.

The significance of the Contribution

This contribution was of great importance, because, Alaska was successful in low-cost airlines with a ROI OF 28 percent. Owing to the fact that ROI is an indicator for measuring performance, it depicts a high efficiency from not only investments but also provides productive results. The focus was mainly on enhancing RASM for generating high profit margins for Alaska airline. However, based on the load elements, the only chances of enhancing RASM is to increase revenue using pricing strategy.

This is practical in terms of assessing the cost of round trip Alaska airline offer s and breakeven costs. Therefore, bidding for landing slots was performed effectively. Because Alaska airline was in the full-service category, it was in position to get rid of intense competition. As such, this move was important for airline when it comes to generating a higher contribution. Nonetheless, there was intense competition, especially in groups 1 and 2, which led to a low contribut5ion and significant losses in certain areas.

Analyse your performance, what could you have done to make more

 To make more money and performance, Alaska airline could have bided a lower price for its opening bid, then increase it when necessary (Suganthlakshmi, 2011). This attempt could increase Alaska Airline’s opportunity for earning better contribution in the 1stlanding slot at low auction value. By and large, Alaska acted as the basis and supported by its core competencies while taking advantage of its rivals, which was important for increasing profitability.

Part 2

              Alaska Airline was formed in 1985. It is a holding firm whose parent company operates airlines, with a staff base of around 15,000 workers and a fleet of 200 aircrafts. The holding firm and the parent company are both independently branded. The company is the seventh biggest US carrier when it comes to passenger carrier and it is widespread across US. While headquarter in Seattle, the airline has grown significantly to serve several US states.        

Some of the deepening commitments were in form of ensuring optimal and efficient services. In this it is imperative to understand Michael Porter’s competitive forces, which shape the strategy. In aviation sector, competitive forces are intense and largely affect the profitability of the airline. Generally, some of the operations that would promote change include management and other associated services including catering, handling cargo and baggage (Wilhelm, 2015).

The airline’s decision to move to an all 737 fleet implies an increase in the mainline fleet to approximately 10 aircraft. In addition, a number of upcoming deliveries are likely to replace 737 fleet.

I would not go contract workers instead take into account that the airline in the community and being a good citizen. This is effective when it comes to enhancing not only the bottom line but also recognising front line employees and customers’ input to the bottom line. In short, good management requires balancing all vital competing interests and enhancing the overall revenue.

The airline is known for its dynamic innovation technologically and improvement on customer service. Therefore, senior leadership could have reduced the potential risk by increasing the airline capacity, great craft operation, solitary aircraft type, economical fares, terminus to terminus services, and rapid turnaround time at the airport, predominantly short- to medium haul routes (Hwang, 2011).

While the cost effective model has largely been a preferred model for airline, the gap between the full service carriers and low service carriers is getting smaller each day, as such, the LCCs might take over the market share of FSCs. Being that this market niche is still unexplored a lot of improvements can be done to grow it. It has been ranked highest in client contentment for old-style North American Airlines for 5 successive years.

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XYZ Capital Partners SWOT analysis

Strengths

Domestically, XYZ has a strong market presence; it takes in more commuters across US than any other carrier. The carrier is one of the largest carriers when it comes to passenger traffic. Owing to the remoteness of Alaska, air is the main form of transport. For five years consecutively it has been ranked highest when it comes to customer satisfaction for traditional North American airlines. The company has a strong operational network on its well established domestic market amid all turmoil characterized by international recession and increased terrorism the Airline still continues to grow.

Unlike its competitors, the company has been generating profit for over three decades except six years since it was conceptualized; it has enabled mergers to stay afloat. It has a great public acceptance in both travel safety and fast way of air travel. It has segmented its market by offering different services and different pricing. This model to a greater extent increase organization popularity and visibility because of specialization (Perry, 2012).

The airline staff training is intense and high in terms of quality coupled with experience earns them great customer satisfaction. The airline offer pilots extreme weather training an aspect that enhances the safety of its operations. To help navigate through an impossible terrain, the airline uses modern radar communication technology.

This also enhances the reliability and safety on its services. The company’s operations stretch back to the cold war era, when it offered chartered flights to the Soviet Union. The airline does not have competitors who fear venturing into this harsh terrain marred with extended flights. The airline obtains its greatest revenue overseas; however, it still plays a major role in national transport.                                                 

Alaska Airline has established that computes 50,000 points to enhance real-time performance of data which saves time and money. Approximately, the system saves the firm about $25 to $30 million annually (Blachly, 2012). This is the cutting edge  for XYZ Capital Partners as it enables it to hold down expenses and compete effectively on routes that cost less outside of US. It has received special honors on philanthropy and community involvement this increases its acceptance by the wider community.  

Weakness

            A large workforce that is spread over the vast geographic areas, with inclusion of the international points, requires continual monitoring and communication increasing on the operational costs for XYZ Capital Partners. Airlines demonstrate a high spoilage rate in comparison to other sectors. Immediately flight takes off, a vacant seat is lost and is non-revenue generating. Nothing can salvage such situation that revenue is lost. Aircrafts are very expensive and require huge capital outlays (Ommani, 2011). While the commerce environment can change rapidly, the in aviation sector it is very complex to make speedy schedule and airplane variations due to staff commitments, contracts and other factors.                                                                            

The greatest weakness for XYZ Capital Partners marketing mix is in the promotional strategies. This is an attempt for cost cutting to stay lucrative but might work against them on creating a new customer base or even losing customers to competitors.  XYZ Capital Partners model of business not necessary it depends entirely on one source of revenue and that is passenger revenue in terms of fares. Anything that disrupts it sends the whole business on its knees. It’s absent in the lucrative certain regions market that is growing in terms of tourism and business travel also affects its operations.

Opportunities

Technological advancement can lead to cutting costs, starting with fuel efficient aircrafts to additional computerization in terms of ground operations reducing the cost of man power. Developing a symbiotic relationship with other carriers can increase passenger volume. This can be achieved by harmonizing timetables; carriers can offer services to destination on a code sharing arrangement with a partner carrier. XYZ Capital Partners offers continual opportunities to both business and leisure air travel (Porter, 2008).                                                                                             

The recent growth on international tourism is increasing the air traffic the airline can tap into this growing the market niche, and by so doing; it increases the revenue generating platforms and air space. XYZ Capital Partners has in-flight entertainment player to improve on customer satisfaction, which is a great marketing move that will improve the customer retention.

Threats          

Global economic recession greatly affects leisure, business and optional travel that cut down the market sphere as well as the revenue in it. Fuel cost is the biggest expense for the airline as is the case everywhere; hence an upward approach can threaten the business strategy. With the surge in the insecurity that has been greatly caused by terrorism negatively affects air travel.    

This applies mostly by governments to safeguard national carriers and caution them from external competition (Blake & Wijetilaka, 2015).Fluctuation in air travel in demand by the economy class market segment, which      hurts the business economically. There has been an increase in personnel training costs; this has been characterized by high technological advancements and the global increase in training fee.

Marketing Mix

Price

XYZ Capital Partners has a reputation for being lowly priced in terms of air ticket fare in comparison to the competitor that is majorly delta air. The other attraction on the price cap is that you can cancel your flight and get back your fare back without any penalty. This makes XYZ Capital Partners attractive to its customers because of customer friendly policies.

In this case, there are price changes such as, reduction in price that customers receive in form of a credit for use in future flight (Wilhelm, 2015). XYZ Capital Partners has mileage, which enable one-way redemption for frequent flyers. The airline also introduced program 49 for planning mileage for Alaska residents with various benefits including email notification, fare, discounts and sales

Promotion

XYZ Capital Partners is technologically savvy and recognized for embracing technological changes to improve clients’ experience. The main mode of marketing is customer referrals it endears itself to its passengers thus creating more customers by referrals from its existing customer base. Such a marketing tool is easy to run because it is not expensive to run as compared to mega sponsorship deals with sports clubs, and television adverts that cost millions to run.

This requires working on the personnel and hiring those with a friendly character and attitude and imposing a strict code of character. The customer here is the most important aspect of the business and how you treat them determines their loyalty to your airline.

Internet being the greatest marketing platform, XYZ Capital Partners has earned a reputation as having funny and clever ads, but there is only problem is that these ads are few and far between.  Such an operational philosophy of cutting down expenses though beneficial can work against them. Airline business requires a lot of visibility and constant communication with the public or you might run a risk of losing business to its rivals.

A brand has to be recognised in public at all times, most airlines fail to know that customers as such, they need being  reminded why they have to be in business and the younger prospects want a visible airline, it has to do that if it has to tap into these market sphere. Therefore, XYZ Capital Partners has to look for ways of understanding such issues.

On time delivery, nobody likes delay and XYZ Capital Partners to ensure that services are delivered timely as well as performance. It has a reputation of prompt service delivery and keeping their schedules. Such a kind of reputation is a morale booster for the existing customers and new customers. Again, this less intensive marketing strategy that stirs the XYZ Capital Partners a head by generating greater customer confidence is the brand for such a dynamic market.

The airline is devoted to its clients and this is one of the leading strategies as far as the company is concern. XYZ Capital Partners should invest in Alaska Airline as services are offered through way of technology, process, and customer relations they share passion. While this is what the organisation aims to do, this is exactly what XYZ Capital Partners intends to carry forth, before investing so as to share on the same network.

Place

Since the XYZ Capital Partners is strategically located, air travel is the main mode of transport. On most occasions, residents use their services to buy goods and services. Patients are also flown for emergency services. Recently, Alaska airline expanded to other regions, particularly, Hawaii and non-airline centre so as to increase the revenue streams, an important element that should convince XYZ Capital Partners to invest.

There are plans to exit underperforming routes and cut the capacity of other routes this is to enable it fully concentrate on the more profitable routes. This is a short term strategy to due to increased competition from established airline. However, with good marketing strategies, XYZ Capital Partners can be at the top.

In business there is no jack of all trades, a company has to specialize on its core activities that way it enable it to retain your existing customer base before thinking of a new market. Furthermore, Alaska airline has developed new branding strategies for affiliate regional as well as independently owned flights that it collaborates with, hence good venture for XYZ Capital Partners. Among the companies it has subcontracted to do additional flying for the group are; Canadair CRJ-700 regional jet, SkyWest Airlines they are dedicated to serve the group and are painted in a similar manner as Alaska horizon’s.

Product

The major product it offers is low cost passengers who travel frequently to either shop or seek medical help. It offers alternatives for customers who do not have time sensitive shipment and can wait for space available services. Moreover, XYZ Capital Partners operate a wide range of flights connecting small towns to main transport centers and carry many customers in comparison to other airlines across Unites States.

On the course to increase its market share, XYZ Capital Partners can invest in other airlines such as Alaska airlines. In such collaborations, XYZ Capital Partners can sell tickets on Alaska flights, which will promote its services on global networks and connection with frequent flyers. This symbiotic kind of relationship rides on the already existing market of the two giant airlines, these minimizes the spoilage rates and in return improves profitability while keeping the operational costs low.

There is an onboard offer of beverages from a fellow US company that produces coffee. It also features on board entertainment; it is regarded as the first airline to introduce in-flight entrainments in 2003. When the sun and the moon aligned on March 2016 the Alaska airline decided to delay the flight for 25 minutes to catch this rare spectacle. In addition, Alaska airline has an accommodating gesture; it gets individuals from one point to another while offering them quality service delivery. It is not only the airline to talks to its people but also listens to them, hence offering customer service at its very best.

Analysis

Alaska Airline operates in a growing market niche where so much can be done to improve its profitability by increasing its revenue. In 2014, for instance, the airline carried over 21 million passengers with a fleet whose average age is 9.7 years. It had a reported net profit for the 4th quarter of USD148 million despite the heightened competition on that year alone it was reported to have a net profit of $571 Million excluding special items. The operating margins for 2014 expanded YOY to 17.7%. Furthermore, full year pretax margin came in at 17.2%. As its giant competitors went into restructuring, Alaska Airline turned itself into a high quality industrial company. Most of the gains that year were attributable to the price o fuel, but even without this the profit margin was substantial.                                                                                     

The airline is still much in growth phase, it can improve further by targeting new markets such as the lucrative Asian market and the African market as a tourism edge. The strength of the local economy especially, in the Pacific Northwest has helped keep the demand afloat, but the rise in Alaska’s margin was characterized more by the reduction in fuel cost. Its competitive capacity rose by 7% and the percentage of its market by 8% in the same year. It has launched 16 new North American markets in Seattle where Seattle signifies 55% market share.                                      

With the recent decision to add more Q400 to grow the E175 sub fleet is interesting, this is a statement even if the fuel prices rises these means that operation margins won’t suffer too deeply, with such kind of management ideas investing in this company is profitable, there is no better time to invest in such a fast growing company but now. With the recent acquisition of virgin America it shows great growth prospective for the airline this will boost its capitalization increase revenue and then in return more profits this in return rewards shareholders with increased returns to investment.

If I were to take a personal stand, I would therefore recommend any prospective investor to put their money in this company because it has proven sustainable over the years, generation profit for 33 years for a business operation than span close to 39 years. 

Conclusion

Based on the discussion and SWOT analysis, it is clear that Alaska airline is in the transformation stage, whereby it is focusing on its strengths while capitalizing on potential opportunities.  The very objective of Alaska airline may be achieved if it puts emphasis to fulfill the demand of users; implement appropriate marketing strategies;  and improve services offered particularly dewing inflight and post-flight.

References

Blachly, Linda ( 2012). “Alaska Airlines places $5 billion 737, MAX order”. Air Transport World. Archived from the original on October 11, 2012. Retrieved 1/5/2016

Blake, Martin & Wijetilaka, Shehan (2015). “5 tips to grow your start-up using SWOT analysis”. Sydney. Retrieved 1/5/2016.

Hwang, Inyoung (2011). “Alaska Air to Replace AMR in Dow Jones Transportation Average”. Bloomberg BusinessWeek. Archived from the original on May 9, 2012. Retrieved 1/5/2016

Ommani, Ahmad (2011). “SWOT analysis for business management” 5 (22). African Journal of Business Management: 9448–9454.

Perry, Dominic (2012). “Alaska orders 50 Boeing 737s in $5 billion deal”. London: Flight global. Archived from the original on October 11, 2012. Retrieved (1st May, 2016).

Porter, M.E. (2008) The Five Competitive Forces That Shape Strategy [online] available from <http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1> (1st May, 2016).

Suganthlakshmi, T. (2011). ‘Challenges And Strategies For Successful Airline Operation’ ZENITH International Journal of Multidisciplinary Research[online] 1 (3), 139-150. available from<http://www.zenithresearch.org.in/images/stories/pdf/2011/July/12%20T.Suganthlakshmi.pdf>(1st May, 2016).

Wilhelm, Steve (2015). “Alaska Airlines logs big boost in passengers as it combats rival Delta”. Puget Sound Business Journal. Retrieved (1st May, 2016).

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Maintenance Aviation Safety Action Programs at Dubai World Central Airport

Maintenance Aviation Safety Action Programs
Maintenance Aviation Safety Action Programs

Maintenance Aviation Safety Action Programs at Dubai World Central Airport

  1. 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.

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, Baines, Lightfoot and Ball (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.    

  1. Topic Literature Review    

According to Ait-Kadi, Duffuaa, Knezevic and Raouf (2009), ASAPs play a significant role in making sure that optimal safety levels are sustained including providing maintenance that is in relation to the process of promoting airworthiness of the airport as well as the air carriers’ condition. Also, Easterby-Smith, Thorpe and Jackson (2012) noted that ASAPs provide maintenance of damaged components of the airport or an aircraft as a strategy to ensure they operate properly in order to improve safety.

Choules (2013) evaluated the need for ASAPs for commercial aircraft as well as large airlines including Emirates, Fly Dubai, Etihad, and Air Arabia in order to provide them with support throughout their operational network and found that these programs were of vital significance. According to Jankowicz (2004), minor maintenance and safety actions may be needed at remote destinations, even though it is more significant if they are done at the operational bases of respective air carriers.

According to Jankowicz (2004), in his study to examine the need of ASAPs for military aircraft operators found that operators of military aircrafts required high maintenance and safety action service reliability and availability considering the complexity of their functions and they are more expensive compared to other aircrafts.

Furthermore, Ait-Kadi, Duffuaa, Knezevic and Raouf (2009) suggested that unlike the airlines, small aircrafts such as helicopters which operate in a an area that is relatively small, and cannot fly for long distances than typical airlines as well as other aircrafts with fixed wings require less aggressive ASAPs.    

  1. Objectives

The primary objectives of this study include:

  1. To investigate the impacts of establishing maintenance aviation safety action programs at Dubai World Central Airport.
  2. To explore the services and functions to be offered by the maintenance aviation safety action programs at Dubai World Central Airport.
  3. To recognize key factors that will encourage global airliners to embrace the appropriate fleet maintenance aviation safety action programs at Dubai World Central Airport.
  4. To establish the internal and external factors that impact maintenance Aviation Safety Action Programs (ASAPs) at Dubai World Central Airport.
  5. 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.

  1. Project Outcomes

Establishing maintenance aviation safety action programs at Dubai World Central Airport is a venture of fundamental importance not only to the airport facility, but also for the airlines expected to be using the airport since there will close monitoring and evaluation of airport as well as airlines activities’ safety while at the same time ensuring that maintenance of the airport and/or airplane is progressing.

This means that, maintenance and safety is an inevitable activity program to undertake as the airlines to be served by the airport of interest continue to grow bigger in terms of fleet strength and customer base. Thus, outsourcing maintenance activity as well as implementation of aviation safety action programs will be beneficial because they will play an imperative role in making sure that these airlines can invest their resources on their core business of airline’s operations.

Establishing these kind of programs can significantly help the airlines in reducing their operational costs by ensuring that, very minimal accidents or incidents are reported at the airports as well as the airplanes used by the airlines to transport passengers. In addition, capital investment will be freed up by these programs since they have a potential of reducing inventory control, upon obtaining approval from the UAE General Civil Aviation Authority.

Moreover, these maintenance aviation safety action programs ought to be implemented in collaboration with pilots, airline operators, airline attendants, airport employees as well as maintenance engineers.

Therefore, in order for the research aims and objectives to be achieved, the structure of the study and analysis will follow the format shown below:

  • Analysis of the currently available maintenance and safety programs at the airport.
  • Identification of factors necessary for the establishment of maintenance aviation safety action programs at DWC Airport.
  • Explore the sustainability of MRO market at DWC.
  • Analyze and understand key factors that forces airlines to choose this new MRO.
  • Investigate factors that have potential to encourage compliance to maintenance aviation safety action programs at DWC Airport.
  1. 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.

  1. What are the key questions the project attempts to answer?
  2. What are the internal factors that affect maintenance Aviation Safety Action Programs (ASAPs) at Dubai World Central Airport?
  3. What are the external factors that maintenance Aviation Safety Action Programs (ASAPs) at Dubai World Central Airport?
  4. 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?        
  5. What Research Methods do you intend to use?

This project is going to be a quantitative research. According to Saunders, Lewis & Thornhill (2012), an appropriate research methodology is essential for any research process to be carried out effectively. The project will involve an exploratory case study to explore the operations of maintenance and safety programs at DWC Airport that are currently faced with high uncertainty levels.

In addition, limited information exists concerning the specific maintenance aviation safety action programs adopted by various airlines as well as the additional programs that airlines ought to adopt, particularly at the DWC Airport (Ross, 2003). The significance of exploratory case study research in this project is that, it will play an essential role in the identification of the salient features and factors that can potentially affect an establishment of maintenance and aviation safety action programs at Dubai World Central Airport, as well as determining the boundaries limiting the implementation of maintenance and safety action programs in aviation.

Easterby-Smith, Thorpe & Jackson (2012) noted that, inductive research method is an approach that allows specific observations to be made subsequent to moving them towards wider views, assumptions as well as theories. As a result, inductive research is envisaged to result to the development of the research hypotheses. However, analytical research in the aviation industry can play a significant role towards helping in succinct understanding of present and future trend of maintenance and safety action programs in the aviation industry through the meaningful insights obtained.

Various strategic and analytical management tools to be used in this study to evaluate the phenomenon under investigation include: PESTEL, SWOT, Performance Driver analysis, and Porter’s Five Forces analysis to investigate the strategic imperativeness, the socio-economic conditions, restrains and drivers in the aviation industry as well as the effectiveness and efficiency while establishing a maintenance aviation safety action programs at DWC Airport.

However, the project will involve participation of a randomly picked sample size of 200 participants from who primary data will be collected. Therefore, the research sample will particularly consist of airlines executives based at the airport, aviation consultants and regulatory body executives, as well as representatives of aircraft manufacturers.

During this study, I plan to investigate the airlines and airport maintenance and safety action programs as well as current and future strategies among various airlines that are utilized by DWC Airport towards heightening safety levels through their respective implementation plans together with the necessary operational elements including the technical expertise, human resources, capacity and available resources. This will be achieved by conducting specific statistical analysis using the information gathered from research participants based on SPSS.            

The quantitative data to be gathered for this study will be primarily collected from secondary sources of data through a review of the available literature materials and other online databases. Moreover, structured interviews will also be used in 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 to the structured interviews and 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.    

  1. What primary and/or secondary data sources do you intend to use?

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 to conduct structured interviews, as well as 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,  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.

In addition, I will also collect secondary data for this study by reviewing published data on articles written about the subject. Secondary data will also be collected by reviewing aviation magazines, journals (both print and online), aircraft manufacturer websites, newspaper articles, and regulatory authority websites. 

Furthermore, I plan to physically visit the case study airport in order to interact and interview maintenance and safety programs’ administrators or managers 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.

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.

Choules, C. (2013). Maintenance and repair organization Exposition. Retrieved on 10th September 2016 from:  http://www.esterline.com/Portals/10/Weston/Documents/CE12%20Iss%2001%20MOE.pdf.  

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. 

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Continental Airlines Case Study

Continental Airlines Case Study
Continental Airlines Case Study

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Continental Airlines Case Study

Question One

The manager is expected to carry out the following steps to turn an organization around:

  1.  Establish all the facts.

In this Continental Airlines Case Study,the manager must establish the short term viability of the business. He has to carry out rapid internal exercises focused on existing contracts, commitments and also cash flow analysis. The contracts that may not be viable must be terminated. The manager can then assess the one year and two year viability of the business. This may require additional liquidity in form of debt or equity to finance the activities of the company.

  • Know what went wrong

The major cause of the problem should be known. If the company performed poorly due to sudden market changes or due to minor internal issues that took long to rectify, it should be known. The management must then come up with a remedy. 

  • Budget

The manager must prepare budget which must be stuck to. This will control costs and spending in the organization. The company will be able to maintain its solvency.

  • Changing the team

The manager should reconstitute the senior management team. Those brought on board must have positive attitude towards changing the performance of the company.

Continental Airlines Case Study

Question Two

The change in the morale of the employees is due to the recognition and appreciation of their performance. The implementation of several award schemes has created internal competition among the staff in delivering services to customers. The adoption of new appraisal practices by the management has also motivated the employees.

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Question Three

In order for Continental Airlines to continue with its good performance the management should do the following:

  1. They should form teams with specific goals to achieve. Each team should have its policies, procedures and standards that are in line with the overall company strategies. The head of each team should monitor and communicate performance to the top management of the company.
  2. Each of the teams must have an annual business plan covering revenue and costs forecasts, product development and set performance targets. All these must fit into company business plan.
  3. Each team must hold a monthly review to assess their performance against the plan. They will be able to determine how the planned targets will be achieved and also identify any difficulties in the process. They will be able to share knowledge and also develop tactics to achieve set targets. They will also be able to reallocate resources to more competitive market ventures and redesign any strategies that are in non conformity with the plan.

The top management should attend these meetings so that they have detailed knowledge of the plans. It will be easy to measure and maintain growth in the long run for the company.

Question Four

The use of different employee techniques like job enrichment will improve the performance of Continental Airlines since the staff morale will be very high. The members of staff will own the management decisions made (Gregory, 2010). They will be enthusiastic to go out of their way andensure set targets are met. The recognition creates a sense of commitment among the staff to deliver fully.

They will feel their efforts are being recognized and, appreciated. The targets which are set are attainable and within their reach. This creates internal competition amongst the staff to deliver on these targets. This working environment will ensure the company will continuously improve on their performance.

References

Gregory, T (2010). Employee  Motivation. Cambridge. Cambridge Press, P.19

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