Airport Operations and Management Challenges Paper Example

Introduction

The global aviation industry is important in fuelling global economic growth while also providing at least 58 million jobs and generating $2.4 trillion annually (Shankman, 2014). According to Moodie (2015), citing Damien Kobel, the director of DKMA, forecasts indicate that 14.6 billion passengers annually will utilize airports globally by 2034, which is an increase from 6.6 billion achieved in 2015. This implies that the aviation industry is an evolving industry but challenges are inevitable, which require appropriate strategies on how to mitigate them. One of the common challenges facing airports is safety, and airports have invested to ensure that the likelihood of accidents is diminished. The second challenge is security, which is exacerbated by the existential threat of terrorism. Without safety and security, airports would be inoperable. However, another important challenge is sustainability from a profitability perspective. While growth in airports operations is inevitable, sustainability is paramount. Airports and airlines should be able to make significant profits to ensure effective and efficient operations while doing this making profit. The current essay addresses these three challenges in depth while also offering solutions by drawing on relevant case studies on airport operations.

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Safety

In the aviation industry, safety is not a competitive issue, and it remains a core aspect that both the industry and the governments have worked on since the onset of global flights. Flying today is substantially safe, but this has been achieved owing to cooperation among industry stakeholders. However, accidents, even though they do not occur often, they are a major concern in the industry. For instance, in 2013, there were only on 16 fatal accidents in 36.4 million flights, which implies that the chance of being involved in a major accident is a negligible probability of one in 2.4 million. Of the three billion passengers that took flights, only 210 fatalities were reported (Shankman, 2014). In 2017, even though commercial airlines recorded zero accident deaths, there were a number of accidents, which warrants the need for airlines and airports to delve into strategizing on how to eliminate accidents.

While there are few accidents in the aviation industry, accidents do happen. For instance, according to Calder (2018), To70, a Dutch-based aviation consultancy firm, released their Aviation Safety Review reporting only two fatal accidents, both involving small turbo-prop aircraft and a total of 13 lives were lost. For this reason, even though aviation accidents are rare, when they happen, they are usually costly in terms of loss of lives, as well as capital. In November 2017, Khabarovsk Avia's Czech-built Let 410 crash landed at Nelkan in Russia, which led to the loss of six lives (Calder, 2018). A much higher death toll was reported in Bishkek, Kyrgyzstan where a Turkish Boeing 747 that belonged to ACT Airlines overshot the runway and ended up in a village located close to the airport, which killed 35 people on the ground, as well as the four crew (Calder, 2018). A jet blast also killed a tourist who stood close to the runway on St. Maarten, a Caribbean island. As such, it is vital for the aviation industry to strategize on ensuring that safety is not compromised. Safe flying is also an issue. For example, Malaysia Airlines MH 370 had an accident and has never been found and the same scenario applies to MH 17 that was shot down in Ukraine (Shankman, 2014).

In effect, Airports have implemented various solutions to ensure safety in airport operations. For instance, the Taupo Airport Authority has put in place efforts geared towards developing a framework for managing operational safety by adopting a Safety Management System (SMS). Taupo Airport has over 35,000 aircraft take-offs and landings annually and a decade ago, it had some of the highest airport operation risks in the country, and in an effort to mitigate the risks, it implemented the SMS, which had a variety of core elements (Civil Aviation Authority of New Zealand, 2014). These include safety policy accountability, coordinated emergency response planning, hazard identification, risk management, safety management documentation, maintenance, and control, safety investigation, monitoring and measuring performance, continual SMS improvement, management review, change management, safety training, and lastly communication of safety information (Civil Aviation Authority of New Zealand, 2014). This allowed the airport facility to avert risks and potential accidents, thereby contributing to increased safety. In addition, MH17 brought to light the importance of information for operations over areas afflicted with conflicts. This prompted the International Civil Aviation Organization (ICAO) to call for governments to work together to eliminate safety concerns of airport operations. The organization has a database of airport operations that is shared with the stakeholders. In cooperation with ICAO, the International Air Transport Association (IATA), gathers flight data that is generated by each flight. IATA has data from reporting programs and safety audits while engine and airframe manufacturers have safety data and have invested in the Global Aviation Data Management database that ensures information sharing among the stakeholders in the aviation industry, which ensures aviation safety.

Security

Safety and security are two different concepts. While security is a set of measures and resources that have been put in place for to prevent malicious acts, such as terrorism, that target aircrafts, crew members, and passengers, aviation safety relates to protection against accidents, design errors and defects, construction, as well as the maintenance and operation of aircrafts (Aeronews, 2016). Security is a component of technology within the aviation industry. As such, to ensure security, airports are increasingly adopting technological advancements. While many airports have integrated the use of technology, there are still challenges that face airport operations and management in ensuring security, currently, as well as in the future. As such, having covered safety challenges, this section covers the security challenge. According to Hattenschwiler, Michel, Kuhn, Ritzmann, and Schwaninger (2015), secure air transportation is vital the global economy, as well as the society at large, and this primarily relies on airport security screening. Security is vital to avert the problem of airline hijacking and terrorism (Stewart & Mueller, 2015). Terrorism is a problem for airport operations, which is evidenced by the September 11 terror attacks where many Americans died. Other threats and challenges to airport security include sabotage bombings (Stranden, 2014). However, 9/11 was a major turning point for the installation of security features.

For instance, the four New York airports, Albany International Airport, Buffalo-Niagara International Airport, Greater Rochester International Airport, and Syracuse Hancock International Airport have adopted various security features (Metropolitan Airport News, 2017). Further, these features will be extended to smaller airports, including Elmira-Corning Regional Airport, Plattsburgh International Airport, and Ithaca Tompkins Regional Airport (Metropolitan Airport News, 2017). The measures have been enforced by the Transportation Security Administration (TSA), and include stronger screening procedures, mainly intended for carry-on items. The new procedures require that passengers should place all of their electronic devices that are larger than cell phones in bins for X-ray screening (Metropolitan Airport News, 2017). The move is designed to address the current terror threat by raising the baseline for aviation security and crackdown in evolving threats. In effect, the TSA officers can obtain clear X-ray images by uncluttering carry-on bags. The screening n the bags is quick and does not alter checkpoint wait times. The TSA officers guide the travelers through the screening processes. In addition to body checks, the X-ray screening is important for ensuring that possible security threats are not allowed into the airports (Metropolitan Airport News, 2017). This helps avert any security threats for passengers in the airports, as well as in flight. Additionally, verification technology on a flight-critical system in the airports serves as an assurance that proper functioning of the plane is up to the required standards (Brat et al., 2015). The security measures are justified because the cost of not putting in place these measures and allowing terrorists to board planes would be greater along with the loss of life.

Sustainability

Sustainability remains a huge challenge for the aviation industry as nothing cannot be guaranteed about the future of the industry if it is not sustainable, which is parameterized by airport or airline profitability (Shankman, 2014). The airline industry has undergone upheavals after the adoption of the Airline Deregulation Act of 1978, which was exacerbated by fuel price hikes, as well as financial crisis, including the 2008-2009 financial crisis. Following the deregulation, airlines and airports have gone through cycles and over 150 airlines have entered into various stages of bankruptcy. There are various airlines that have filed for bankruptcy, including American Airlines (2011), Delta Airlines (2005), Northwest Airlines (2005), United Airlines (2002), and US Airways (2002, 2004), which implies the challenge of profitability is common.

In 2013, American Airlines launched a revenue management revolution after adopting a yield management strategy. The approach was able to allow American Airlines to move from a corporation that filed for bankruptcy in 2011 to a profitable one. The approach American Airlines adopted was based on the premise that inventory is perishable and that clients are not equal. The carrier focussed on maximizing the revenues via an analytics-based methodology for inventory management in an effort to thwart increasing threat in market failure, which marked the advent of low-cost, low-fare carrier. According to Klophaus, Conrady and Fichert (2012), the low-Cost Carriers (LCC) are carriers with dissimilar practices and resources compared to traditional legacy carriers, which enable them to operate at significantly lower costs. The characteristics of LCCs include productivity efficiencies by using single aircraft types, such as Boeing 737 and Airbus 320, a point-to-point network as opposed to hub-and-spoke networks, lower wages, direct selling of tickets, and single class cabin, less unprofitable standstill, rapid turnaround, one-way fare per flight, as well as no-seat assignments. As such, American Airlines was able to attract more customers, thereby allowing the company to make more profits. In effect, the revenues and profits rose substantially, and the carrier is performing well (Carey, 2017).

Other airlines have switched to Joint Ventures, which have been instrumental in accomplishing the decreased airfare prices. The strategy enables two or more airlines to share resources, and in turn, split their profits and revenues over a specified and defined route the airlines have agreed on. The main goal is to optimize their profits. According to Durnst (2015), the overriding feature of JVs compared to traditional alliances, such as Star Alliance, OneWorld, and SkyTeam is the notion of "Metal Neutrality." The concept means that the revenue Each JV member is remunerated on a specific route is mainly independent of which air carrier conducts the actual operation of flying the passengers from one location to another. For instance, Delta Air Lines and Air France, who entered a transatlantic Joint Venture partn...