Aviation

AirAsia was established in 1993 by DRB-Hicom, a Government-owned conglomerate. It started operations in 1996. Tune Air Sdn Bhd, Tony Fernandes’s company purchased this heavily indebted airline business from DRB-Hicom in 2001. AirAsia managed to become profitable and world renowned low-cost airline through visionary leadership and innovative business approach. Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International is AirAsia’s first and main base. AirAsia is renowned as Malaysian low cost airline and Asia’s largest low fare, no frills airline.

The airlines claims ‘No Admin Fee’, but has some fees for services which are free on other airlines. AirAsia slogan is ‘Now Everyone Can Fly’. Being the home of AirAsia, the LCCT is the budget terminal in KLIA, opened on 23 March 2006. The AirAsia subsidiaries are the likes of Thai AirAsia, Indonesia AirAsia, VietJet AirAsia and AirAsia RedTix. Meanwhile, AirAsia associate companies are AirAsia X, Tune Hotel and Tune Money. AirAsia is one of the award winning and largest low fare airlines in the Asia expanding rapidly since 2001.

With a fleet of 72 aircrafts, AirAsia flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand, and Indonesia. AirAsia believes in the nofrills, hassle-free, low fare business concept and feels that keeping costs low requires high efficiency in every part of the business. AirAsia’s vision is to be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares. Their missions are?

To be the best company to work for whereby employees are treated as part of a big family

Create a globally recognized ASEAN brand To attain the lowest cost so that everyone can fly with AirAsia Maintain the highest quality product, embracing technology to reduce cost and enhance service levels They managed to make the low fare model possible through the implementation of the following key strategies.

: Partnering with the world’s most renowned maintenance providers and complying with the with world airline operations.

High Aircraft Utilisation: Implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity.

Low Fare, No Frills: Providing guests with the choice of customizing services without compromising on quality and services.

Streamline Operations: Making sure that processes are as simple as possible.

Lean Distribution System: Offering a wide and innovative range of distribution channels to make booking and travelling easier.

Point to Point Network: Applying the point-to-point network keeps operations simple and costs low. .

TYPES OF INNOVATION

According to Kinicki and Williams, innovation is finding ways to deliver new or better goods or services. It means that every organization will not allow itself become complacent. According to Chell, innovation is also deemed as the creation of something new in the marketplace that alters the supply-demand equation. An entrepreneur creates a new demand in the market by recombining the factors of production to create something new. According to Kuratko and Hodgetts, there are four basic types of innovation.

i. Invention – the act of creating a new product, service or process that is totally novel or untried. For example the creation of telephone by Bell.

ii. Extension – the expansion or addition to existing product lines, services or processes. For example Samsung which is well-known for electric and electronic products, extending its business to automobiles.

iii. Duplication – process of replication of existing product, service or process. Duplication does not mean simply copying, but adding new features or improving competitiveness of the product, service or process.

For example the function of handsets is to enable us to talk with others anywhere. Today there are several extra features added to the functions such as MMS and WAP services. iv. Synthesis – process of combining separate parts or elements into a new whole formulation or application by taking into consideration several ideas or items that already exist. For example the combination of computer and network technologies has produces the Internet.

3. INNOVATION WITHIN AIR ASIA

In 2008, FastCompany. com voted AirAsia as one of the 50 most innovative companies in the world.

According to CEO of AirAsia, fostering a culture of innovation within the organization is a challenge and over the next few years, he will be seeking to study even more deeply the factors inherent in how one creates an environment that can foster innovation. Some of it is cultural; some of it is due to the environment we live in. In Asia, society is still largely hierarchical and conformist. Based on the four types of innovation, AirAsia implemented few them well into their organization.

3. 1 Invention AirAsia created AirAsia X, the world’s first long-haul low cost airline.

3.2 Extension AirAsia expand its’ business by having Tune Hotel which is a five- star limited service hotel.

3. 3 Duplication Modeled after successful operations of United States’ southwest Airlines, AirAsia added a new feature to make its airlines more competitive such as the introduction of mobile booking and check-in.

The management of AirAsia team is very good in strategy formulation and execution. The strategy that they have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines in United States and Europe.

They are Ryanair’s operational strategy (no frills, landing in secondary airport), Southwest’s people strategy (employee comes first) and Easyjet’s branding strategy (linking with other service providers like hotels, car rental).

INNOVATION’S IMPACT ON AIR ASIA

Tony Fernandes has created a culture of teamwork, equality and constant communication. The headquarters at Kuala Lumpur is staunchly open plan where none included the CEO have an individual office. This attempt to ensure all staff has a direct contact with each other thus enhanced the opportunities for innovative thinking and creative ideas.

Besides open-plan office, ideas are shared actively through the organizations. By using Intranet platform for forums and discussions, the staffs can gives ideas, suggestions and critiques to be shared throughout the company. Besides giving competitive salary packaging and encouraging culture, opportunities to develop talent by giving them training keeps the staff loyal to the company. There is not much emphasis of the organizational structure of the company because the CEO preferred to have a common feeling of unity among the staff.

Having a rigid structure will segregate people into different categories. AirAsia was very supportive and responsive in encouraging and listening to its employee for any ideas in reducing cost. This made the employees more productive and creative in doing their performance. With the help of AirAsia Academy, AirAsia has successfully created a low-cost airline mentality among its staff. Tony Fernandes as CEO of AirAsia said his philosophy is very clear. Before a business can grow, it needs to have its costs under control. It must be cost-efficient and profitable, and it must create value.

Costs that do not add value must be contained, reduced and even eliminated. For example, AirAsia practices high rate aircraft utilization which signify that higher profit will be gained by the firm and also lower the cost as the distributed fixed cost get smaller. He also stressed that constant focus on innovation has been the airline’s main weapon against the economic downturn. AirAsia is one of the airline companies who more focused with the strategy how to reduce inefficiency and make it low possible fare in the world. Tony Fernandes believe in innovation.

AirAsia is moving ahead compared to other airlines operators in term of innovative use of technologies. Customers can book their flights and check-in by using AirAsia’s web sites using technology gadgets such as computers, laptops, mobile phones and tablets. According to Shari, for low cost, short haul strategy, the management conferred with mechanics on how to coddle spare parts so they can last longer. To extend the landing gear usage time, mechanics advise pilots to take a shallow approach on landing. By doing such things, AirAsia was able to lower the cost on short haul.

It was because less part would be need to be replaced since AirAsia does not have its own maintenance, repair and overhaul. AirAsia provide a simple no frills flights which do not include meals and lounge facility, a lean ground staff, an online reservation system and high aircraft utilization at fares that are lower than traditional full-service airlines. It able to charge much cheaper ticket price for a flight compared to main line operators’ charge. Air Asia also pursue routes that the other airline operators do not covered and perceived as not practical.

AirAsia have maximized the use of technologies by implemented a system done in its marketing and sales activities such as revenue management system. This system helps AirAsia to optimize prices and allocate capacity to maximize expected revenues. The optimization is done on two levels, seat and route. Every seat is considered an opportunity to maximize revenue. Seats are available at various prices in different points of time. A reservation done at later date will be charged more than the one done earlier for the same seat.

By adjusting prices for routes that have a higher demand when compared to others. The effective method is to combine these levels for all flights, all routes so that both the seat and the route are effectively priced for all the flights. Since low-cost model for airlines was invented by Southwest, AirAsia decided to invent AirAsia X, the world’s first truly long-haul low cost airline. By focusing on the low-cost, long-haul segment, in 2007 AirAsia X was established to provide highfrequency and point-to-point networks to the long-haul business.

AirAsia X’s cost efficiencies are resulting from maintaining a simple aircraft fleet and a route network based on low-cost airports, without complex code-sharing and other legacy overheads that weigh down traditional airlines without compromising on safety. AirAsia also use modern technologies to manage operations and to be directly accessible by its customers. Relying heavily on information technology, the company keep introducing innovative ways for booking and ticket sales. Internet booking and ticketless operations are the essence of the simplified process of booking and chekckingin.

By using online booking and payment facilities, AirAsia managed to record over RM130 million sales over the Internet alone. It also allows customers to pay for their telephone bookings using credit cards or cash at the designated banks. The ticketless service also lets customers bypass the hassle of collecting tickets. AirAsia focus on really understanding consumer needs and problems. By increasing the consumer insight, the company is able to develop new products that solve these needs and problems. For example, by applying customer suggestion to have multiple languages in AirAsia’s websites, half of their sales are via internet booking and it is steadily rising.

AirAsia have a multilingual website with seven languages. AirAsia also have an Internet-based real-time holiday package program that is GO Holiday. It also introduce Short Messaging Service (SMS) to enable customers to book seats, check flight schedules or obtain the latest updates on its promotions through mobile phones. With other airlines, counter check-in is free of charge. But AirAsia implement a fee for every conventional check-in.

For a -in, customers have to use mobile check-in and web check-in. The rationale behind this implementation is to promote better efficiency and be cost effective for an organization in term of human resources. Counter check-in charges will be part of ancillary revenue stream. Revenue via ancillary streams helps Air Asia offset the escalating jet fuel price, which has exceeded USD$110 per barrel. Instead of transferring the full cost of the jetfuel price hike to customers, AirAsia chose to counter the spike by aggressively growing their revenue through ancillary products and services.

AirAsia 2 : Self Check-in

For AirAsia’s agents who have access to AirAsia’s Internet-based real time inventory booking engine, they can make payment via a virtual AirAsia credit card. AirAsia spends more money in advertising by involving local celebrities to achieve high impact among its target segment, the younger set of customers. This strategy due to travelling among the younger generation and budget travels are becoming a popular trend. AirAsia has a high frequency and wide coverage of flight service. It’s quick turnabout time of 25 minutes is said to be the fastest in the region.

For a low-cost airline, turnabout time is an important element. The more time the planes are in the air, the more revenue can be earned. The fastest turnaround time in the world which is 25 minutes is due to innovative procedures and systems in AirAsia. The practice of free seating simplifies the coordination of the operation. Imagine in 25 minutes, the turnaround of an aircraft must take place. By simplifying the process where there are no different classes and free seating, the staff manages to complete the process in less than 25 minutes.

To handle the customer’s complaint about flight delays, being charged for a lot of things and not able to change flight or get a refund if customers could not make it, AirAsia provided call centre to solve it. Other than aviation, Air Asia also extending their business and has come up with Tune Hotel which is a five-star limited service hotel. Despite its currently limited presence in Indonesia with only two hotels in Bali, Tune Hotels has joined the big boys’ league when it was named among the Top 20 Indonesia Innovative Brands 2011 by the country’s leading marketing communications magazine, MIX, in its May 2011 issue .

AirAsiaGo also is an expansion of AirAsia’s online services on www. airasia. com.

AirAsiaGos products (Packages, Hotel, Activities, Go Car, Go Hostel, Go Medic) are available online for purchase.  AirAsia 3 : www. tunehotels. com

CONCLUSION

As the leading and largest low fare airline in the Asia, AirAsia has been expanding rapidly since 2001. AirAsia has been such a big phenomenon in airline industry especially in Asia. AirAsia is one of the airline company focused with the strategy how to reduce inefficiency and make it low possible fare in the world.

In a conclusion, innovation opens pathways that appear closed. Innovation provides opportunities to live your values, even as it improves a company’s bottom line. Only innovation — be it in our business, our lives, our societies, our nations – can ensure that we overcome the personal, national and global challenges that we face daily. Air Asia believe in the no frills, hassle free, low fare business concept and feels that keeping costs low requires high efficiency in every part of business.

AirAsia was becoming an airline company that is chosen by so many customers from all walks of life. The best philosophy of AirAsia ‘Now Everyone Can Fly’ means to give an opportunity to all people including those in remote areas to flight with the lowest possible fare and making them can flight even they only have the less money. To reach the mission, AirAsia have to be very creative and innovative because it is almost impossible to accomplish it. A good entrepreneurship is very much needed.

Ryanair was the first budget airline in Europe, modeled after the successful U. S. low cost carrier, Southwest Airlines. Ryanair is one of the oldest and most successful low-cost airlines in Europe, the third largest airline in Europe in terms of number of passenger and the largest in the world in terms of international passengers’ numbers. For this article, I had provided the 4 Ps, which is Product, Price, Place, and Promotion for Ryanair. PRODUCT Ryanair was a brand for the budget airline.

It also can define as a product because when people want to buy the airline ticket in cheaper price, they will automatically think about Ryanair. Transportation is the main product for Ryanair. It provides services of travel from one location to another location with comfortable environment and shortest duration as well. Moreover, passengers feel convenient to make booking through the internet or phone call at any time. Besides, food and beverage is another product of Ryanair.

Ryanair offer the food and beverage to passengers throughout the flight who purchase on board programmed. At the same time, Ryanair also provide the services which are serve food and drinks to passengers or fulfill the passengers’ requirement if available. Ryanair not only offer the transportation and food and service to passengers, it also offer the experience to passengers which is sold the cheaper ticket to passenger to enjoy or getting experience to flight.

PRICE Ryanair offer the lowest cost of fares than other competitors in aviation industry because Ryanair stand at the position that the price is the key element of its brand and the price is more important than the product itself to the passengers, so within the low price as the long term strategy, Ryanair use different pricing, which means that off- peak travelling and booking in advance can make a ticket cheaper compare with normal day.

In the same time, Ryanair are discriminate massively, safe in the knowledge that nobody can buy up loads of cheap tickets and flog them to people who would otherwise only qualify for the wallet-draining latecomers specials. On the other hand, Ryanair will continue to lower the fares and increase the percentage of seat for which it only charge for taxes and landing fees. For the boarding pass, passengers are required to print out their own boarding pass since the checking in services at the airport has been discontinued.

Therefore, for passengers who arrive at airport without a pre-printed online will have to pay €40 for their boarding pass to be re-issued. The Ryanair has also replaced the free online check- in with a €5 online check- in fee which is charged per person, per flight. PLACE Ryanair emphasize that booking seat is only possible in website or “Ryanair direct” call- centre, no other possibilities are officially offered.

The Ryanair has started the website in the year of 2000, the number of passenger who made online booking had been increased tremendously because of the lower flight prices are selling direct to the passenger and the cost imposed by travel agents are excluding. Besides, the airport also located at strategic place where passengers’ can take the transport from town area to airport directly which included coach, limousine and etc. PROMOTION The advertising that is made by Ryanair about charging passengers ? to use the toilet on their flights is actually to gain the media and public attention. Ryanair often use their advertising to make direct comparison and attack their competitor by comparing price. In one case, the Sabena sued the Ryanair because one of the advertisement that advertise by Ryanair are misleading and offensive, so that, the Ryanair was discontinued the advertisement and also publish the apology on their website. In the same time, Ryanair used the apologized for futher advertising to gain people attention.

Because of this case, through the website, more and more people know Ryanair and Ryanair had come out more and more promotion to attract people, such as ? 8 seats for travel during September and October, including some taxes and charges. It is very worth for passengers because the price is very cheaper. Besides that, through the seasonality, Ryanair running a promotion which is current 30% off fares UK promotion runs from 22 – 25 January 2010 for flights departing from 5 February – 25 March 2010 to certain country.

This message had been updated or post in the Ryanair website and it also become a headline of the newspaper. The passengers who want to make a book have to book at least 14 days in advance via Ryanair website or by phone call. At the same time, in order to pay the lowest quoted fare, the passengers need to pay by master card or prepaid debit card to avoid the ? 5 per person per flight admin fee, and the passengers can take one piece of hand luggage which lowers than 7 Kg.

: The Post 9/11 Age Airport security in the world we live in today is drastically different then the security we knew before the events of September 11, 2001, when four passenger airliners were high-jacked over the skies of the United States, causing a global terror pandemic that still has long lasting effects today. We will look at, discuss and break down some of the key features of airport security in Canada as well as the United States, that have been improved, as well as certain security programs and features which were freshly implemented as a direct result.

We will discuss “no-fly lists,” personnel training and armament, and the Canadian Air Transport Security Authority or “CATSA,” including their security screening techniques and procedures (screening, responsibilities, Air Marshalls). The “No-Fly List” was created shortly after the events of 9/11, by the United States government’s Terrorist Screening Center (TSC). The list includes the names of people who are deemed unsafe, or a threat to Airline security and are no longer permitted to board a commercial airline for the purpose of travel coming in or out of the United States.

The list now contains roughly 10,000 names (2011), the number people on the list fluctuates based on threat, and intelligence reporting. Canada also has a similar list called the “Passenger Protect,” a similar initiative to that of the United States list, implemented on June 18, 2007 in order to identify people who could be a threat to the security of aviation, and prevent them from boarding Canadian domestic flights as well as International flights to or from Canada.

The Passenger Protect program has two main parts: a set of “Identity Screening Regulations” which requires all passengers 18 years of age and older to present a valid form of government-issued Identification in order to board a flight, as well as a “Specified Persons List” which has a name, birth date, and gender of the individuals believed to pose a security threat. The list contains roughly 1,250 names. Individuals who have been denied boarding and are in fact on the list can submit an appeal to a branch of Transport Canada, called the Office of Reconsideration.

The program works by the government supplying the Specified Persons List to Airlines, who then compare names of people on the list with individuals who intend on boarding flights. When the airline finds a name match, they then reference the individual’s government-issued identification to confirm. The identification is then once more confirmed in person at the airport check-in area, when a confirmation has been established Transport Canada is immediately notified.

Training is also provided by Transport Canada to the airlines to teach staff and agents how to implement the ID verification process, and establish procedures to ensure the rights of the passengers are respected. Of course with a system like this, controversy is brought up by civil liberty organizations citing their concerns for civil liberties, racial profiling, privacy, and the perceived failure of the no-fly list created in the United States. In the United States, several anomalies’ referred to as “false positives” have risen.

A “false positive” happens when an individual who is actually not on the no-fly list, has a name matching or similar to a name on the list. One notable case of a false positive includes a United States Marine in April of 2006, who was flying home from Iraq when he was prohibited from boarding his flight home, as his name matched one on the no-fly list. The lists, although very controversial both here in Canada and in the United States play an important role in establishing airport/airline safety and security, and ensuring an event such as the attacks on September 11, 2001 will not re-occur.

Secondly, the way Security Personnel are trained and armed has been drastically affected in the post 9/11 world. In the United States, immediately after the attacks for several weeks to months afterwards, fully armed guards, either Local Police or National Guard would patrol airports in full tactical gear wielding assault rifles or tactical shotguns. In Canada the response was similar, however not as fully extended as in the United States.

In Canada today, the Canadian Air Transport Security Authority (CATSA) which is thoroughly explained in the next topic, handles all screening procedures by hiring third party private security firms to conduct screening. Our general airport security providing safety is executed by local Police forces. The RCMP once used to handle all general airport security, now only handles a few airports including Edmonton International Airport. Edmonton International Airport has a detachment of the RCMP located on site to ensure a quick and proper response to emergencies, ecurity and policing needs. The Police members on site are trained in emergency preparedness in order to be able to respond to a wide range of situations, including terrorism attacks. In addition to human Police officers, many airports such as Edmonton’s, implement canine members for certain situations such as sniffing out drugs, weapons, people, and explosives. In Edmonton specifically, at the RCMP airport detachment, they have Badge, a German Sheppard trained in attacking criminals, searching for lost people or baggage, as well as the ability to sniff out 15 different explosives.

As well as the main goal of airport security of keeping a safe and problem free environment, security also includes Emergency Response Services (ERS). Fire and medical services are always ready at a moment’s notice 24 hours a day, 365 days a year for emergencies such as fires, aircraft mayday emergencies, and terrorist attacks. The Emergency Response Services are always highly trained and outfitted with top of the line vehicles and equipment to deal with any situation, and all have requirements and policies on stringent response times.

An example of the preparedness by the ERS in Edmonton is their ability to make it from the fire hall located on site to the mid-point on the furthest runway in 3 minutes. Finally, as a direct result of the attacks of September 11, 2001 we seen the formation of the Canadian Air Transport Security Authority or “CATSA,” in December 2001, introduced by then Finance Minister Paul Martin, which included a very comprehensive plan aimed at enhancing economic and personal security in Canada.

In April of 2002 CATSA took over responsibility of passenger and employee screening, although they still hire private security companies to do much of the screening, CATSA still oversees training and equipment available. CATSA states their mission is “to protect the public by securing critical elements of the air transportation system… ” Their responsibilities can be grouped into four major areas; Pre-board screening, hold baggage screening, non-passenger screening, and Restricted Area Identity Cards.

Pre-board screening is done by Private Security firms hired and governed by CATSA, their tasks include getting all carry-on items coming onto an aircraft to go through X-ray, individuals must then pass through metal detectors and physical searches can and will be executed if an alarm is raised either through the metal detector, or random selection. Full body scanners are also used to reveal weapons, objects or explosives hidden under or within clothing. CATSA also implements the use of Explosive Detection Trace (EDT) technology at security checkpoints; this involves a quick swabbing of carry-on items or hands to test for explosives.

Hold-Baggage Screening (HBS) is another major area of CATSA, this is what happens to our baggage once it has been checked in and is on its way to be loaded onto the aircraft. This is the process of screening all checked baggage using a combination of state-of-the-art explosive detection technology, as well as highly trained security personnel. During HBS the density of baggage is tested as well as additional testing for trace amounts of chemicals. HBS is currently in full deployment in 89 airports across Canada since 2006, for all domestic and international flights.

CATSA is responsible for the instillation, deployment and renovations of HBS systems as well as regulatory compliance monitoring. Another major area of CATSA is non-passenger screening (NPS), this is required by Transport Canada starting back in 2004 and involves the random screening of people who work at the airports, these people can include flight crews, airport crews, caterers, maintenance workers, and baggage handlers. This subjects employees to unpredictable security screenings at entry points within airport restricted areas, the screening process is similar to that of the passenger screening, and also includes an Identification check.

CATSA states that they screen 2,500 employees a day out of the 100,000 employees who have access to secure areas in Canadian airports. They also state that this program is continually evolving, as the only constant is “the cooperation needed between screening officers and non-passengers. ” The fourth noted area of CATSA is the Restricted Area Identity Card (RAIC) program, which is constantly advancing through the use of biometric scanners. The RAIC program uses state-of-the-art duel biometric scanner identification programs to ensure the identity of the personnel who have restricted access.

The program includes cards with built-in microchips to store biometric information of fingerprint and iris scanner templates. The RAIC program has been fully functional since January 31, 2007 in over 28 major airports in Canada. It’s notable that the biometric technology used here is also utilized in non-passenger screening and these two programs work in conjunction with one another. CATSA also jointly implements the Canadian Air Carrier Protective Program (CACPP) with Transport Canada; this program is similar to that of the U.

S. Sky Marshall Program. This program strategically places highly trained, armed, undercover RCMP members, also known as In-Flight Security Officers (IFSOs), on Canadian registered commercial airliners. IFSOs mandate is to be able to successfully prevent the aircraft from being taken over by an unauthorized individual(s), as well as gather and interpret intelligence on terrorist and criminal activity within civil aviation. In conclusion, airport security in North America and the world will continue to grow and prosper.

In the post 9/11 world today, policies and procedures will only grow tighter and more stringent in an effort to prevent terrorism. From no-fly lists created to prevent the wrong people from boarding passenger planes, to tighter and better trained local Police and Security personnel on the front lines preforming screening, security and emergency response services. To government initiatives like the Canadian Air Transport Security Authority providing important and well-rounded security systems from x-ray scanners to In-Flight Security Officers, the airline industry has never been more stringent in counter terrorism.

References Airport screening: 9/11 response. (n. d. ). In CBC News; the fifth estate. Retrieved October 25, 2012, from http://www. cbc. ca/fifth/fastenseatbelts/security. html No fly list. (n. d. ). In Wikipedia. Retrieved October 25, 2012, from http://en. wikipedia. org/wiki/No_Fly_List Passenger Protect. (n. d. ). In Wikipedia. Retrieved October 25, 2012, from http://en. wikipedia. org/wiki/Passenger_Protect Security Screening. (n. d. ). In Canadian air transport security authority. Retrieved October 25, 2012, from http://www. atsa-acsta. gc. ca/Page. aspx? ID=7&pname=Screening_Controle&lang=en Canadian air carrier protective program. (n. d. ). In Transport Canada. Retrieved October 25, 2012, from http://www. tc. gc. ca/eng/aviationsecurity/page-186. htm Gazette magazine – the canadian air carrier protective program . (n. d. ). In RCMP-GRC. Retrieved October 25, 2012, from http://www. rcmp-grc. gc. ca/gazette/vol70n3/air-eng. htm Emergency response. (n. d. ). In Fly EIA. Retrieved October 25, 2012, from http://www. flyeia. com/emergency_response. aspx

Delta Airline Case 1-During the 1990’s, none of the five largest air carriers in the United States earned its cost of capital. Why do such low rates of return on investment persist in the airline industry? That’s correct, airline companies margins were below the average for US industries for a long time, especially after the 1978 deregulation. For 40 years, prior to 1978, the airline companies had operated under the regulation of the CAB (Civil Aeronautics Board), which was responsible for managing routes and fares, and thus protected companies revenues and, more important, profitability.

Protected by cost-plus pricing, airlines regularly assented to labor union demands and in fact didn’t care too much by the costs incurred by the union deals. Due to the market environment during regulation, the airline companies used to overcharge for tickets, to compensate the costs. After deregulation, airline companies found themselves with high fixed costs and expensive labor. The companies started then running to gain productivity, customer loyalty, explore other routes, decrease costs (using alternative airports, etc… and focus on how to develop a system that would ensure high load factors; the companies started to pursue the returns/ yields. Together with all the costs problems, the big legacy carriers had to fight the Low Cost Carriers that appeared after deregulation, and were gaining market share rapidly. 2-Despite the challenging industry environment, airlines like Southwest and Jetblue earn enviable returns. How? Southwest and Jetblue are part of the LCC that appeared after 1978 deregulation. These companies remained profitable despite all the markets ups and downs, and even after Sept 11/ 2001.

Basically, the LCC operated differently from legacy carriers using secondary airports, short turn times, high load factors and different labor costs (flexible work rules vs. profit sharing plans) helping the companies have a much more enthusiastic workforce. All this combined with a different mission and vision, so a different strategic planning is what makes them profitable. LCC don’t use legacy carriers as benchmarks, they don’t even look at them as competitors, because their competitors are cars, buses and other ways of travelling.

Even the way tickets are issued is different, and also focused on modern way of life, less burocratic, more self-service and, of course, cheaper. This companies have essential competencies: Values (they created a new way of flying, from the ticket purchasing to to the flying experience), Rare characteristics (they are not regular carriers, they created a whole new market), Hard to copy strategies and operational competency. They launched a new substitute product in an existing market, ending in the creation of a new market, where they have so much competitive advantages that others can’t compete. -Why have all the low-cost subsidiaries of legacy airlines, including Delta express, failed? All big legacy carriers launched low-cost subsidiaries, but none obtained success. Some reasons are written below: -They launched substitute products in their existing market, but they should have entered the new market, with a new company -The subsidiaries shared employees with the legacy carriers -They shared burocracy -They didn’t have a clear market and also marketing strategy, different from the legacy carriers -They carried the same costs to operate

In summary, LCC is a total different business than legacy carriers, and can’t be integrated in other business. It has to have its own market strategy, labor agreements, administration, ratios, etc… The only path to success is treating low-cost subsidiaries as a whole different business, inserted in a whole different market. 4-What will happen to Delta if it continues to respond to the low-cost airlines in the way it has in the past? Delta Express was created as Delta’s response for the growth of LCC’s, primarily in Florida. Express used to operate older Boeings and offer less in-flight services.

In the beginning, Express could negotiate with the pilot’s union, resulted in some pay cut. but this agreements were falling apart. More important, all decisions concerning its operations were made centrally, as part of mainline Delta, and even ground services were shared. In fact, they were committing the same mistakes as the other legacy companies when operating their low cost subsidiaries and the only logical path, if Delta continues to operate Express as part of its flying business is the fail path. Low cost is not the core business of Delta and operating a low cost airline is not the core competency of its executives.

That combined together cannot lead to success. 5-What are the options available to Delta? Based on the information available to you in the case, what course of action would you recommend? Based on the case, and most important on the experiences of success and fail of low cost carriers, I would recommend that Delta would restructure its operational and administrative office to support Express as if was a total different business: -Totally different staff (another business unit, independent from Delta) -Different business results statements Different cost and capital structure -Different flight equipments (new aircrafts, that would have fewer maintenance needs and high flying hours) -Different services provided in and out-flight -Easier ticket issuing -No Frequent flyer program -Stronger agreements with regulatory institutions over time-table -Different mission, vision and values (“new company”) -Different routing, pricing, pilots and flight attendance payments program, etc… -A clear target of being the number one low cost carrier in USA and not only diminish the market share of other LCC’s.

Ryanair (0704007 business ??? ) their strategy Ryanair’s strategy is to offer their services with cheap price. So their competitive advantage is “Cheaper price” than other rivals. To maintain cheaper price than other rivals, they faces several problems. facing problems There were several challenges faced by low cost carriers in Europe like rising aviation fuel costs, ensuring staff productivity and maintaining a large fleet for expansion. 1. There are lots of airways which is provide cheap fare of flight such as easyjet, Virgin express, Air Berlin and so on.

As minor airways use the same routine, minor airports get a purchasing power from the airlines competition. It is hard situation for Ryanair to minimize the fare. 2. The aviation turbine fuel costs fluctuated as economic and political situation changes and increasing demand of fuel. Also, the fuel should be paid by US dollars, so change of exchange rate affects to the fuel cost. Ryanair had not added surcharges like other airlines so that they could maintain lower fares.

But increasing fuel cost makes hard to maintain lower price for Ryanair. 3. As I mentioned earlier, there are so many airlines offer cheap fares in Europe. The major competitors of Ryanair were easyJet, bmibaby, Air Berlin, SkyEurope, Wizz Air and Aer Lingus. Also, there were other low cost substitutes like train and tram services in Europe. 4. Ryanair want to expand their business in the European continent as it was becoming popular tourist destination. Also it is planning to expand its network to North Africa.

It requires more aircraft, human resources, and agreements with airport authorities and governments. But the incidents of terrorism in UK and Europe, requirements from airport authorities and governments is hard for them. providing solutions 1. As there are quite lots of airlines which offer low fare of flight, they can be united and make a union of lower fare flight. Then they can have a purchasing power to local airports. 2. When the CEO judges the fuel cost goes up and thinks the time of low cost of fuel, CEO can make a long term contract with oil supplier.

At this strategy, CEO’s judgement is really important. Also, the company can do Forward Trading of oil. 3. Customers choose some airlines by fare and service. As the automatic devices are developed fast, they can reduce the cost by replacing from human resources to automatic devices. But the part of offering services, employees should be focused. 4. Do negotiation with the countries such as North Africa, US etc , then try to be liberalization. After the negotiation, business expansion will be easier.

India’s chiefly domestic state-owned carrier, Indian Airlines Ltd. , flies passengers and cargo to 59 domestic and 16 international destinations. Its fleet numbered 52 aircraft in 2000. Indian Airlines has traditionally based its network around the four main hubs of Delhi, Mumbai (formerly Bombay), Calcutta, and Chennai (formerly Madras). The airline carries about six million passengers a year and has a substantial freight operation. Origins The Air Corporations Act of 1953 amalgamated India’s dozen or so airlines, most of them undercapitalized, into two nationalized air carriers: Air-India Ltd. given responsibility for international routes, and Indian Airlines Corporation (IAC), the domestic airline. The eight airlines that were amalgamated into IAC included Air Services of India Ltd. , Airways (India) Ltd. , Bharat Airways Ltd. , Deccan Airways Ltd. (already 70 percent government-owned), Himalayan Aviation Ltd. , Indian National Airways Ltd. , Kalinga Airlines, Ltd. , plus the domestic operations of Air-India Ltd. IAC began operations with a fleet of 74 of the war surplus Douglas DC-3s that had founded its short-lived predecessors. The airline also had three times as many employees as it needed, writes R.

E. G. Davies, a situation that was slow to change due to the government’s refusal to allow layoffs. Davies also writes that the standard of maintenance was low and the airline suffered many accidents in its early years. IAC soon moved to bolster its fleet by ordering a few new de Havilland 114 Herons, retired after only a couple of years of service, and Vickers Viscount 768s, which were assigned to trunk routes. The DC-3s continued to supply feeder traffic; they soon began to be phased out by Fokker F-27s and Avro 748s. IAC began flying short-haul jets–French-made Caravelles–in the mid-1960s.

The Caravelles were so popular that IAC soon needed larger jets to on the routes between Bombay (Mumbai), Delhi, Calcutta, and Madras (Chennai) that formed the India’s domestic trunk network. IAC’s first Boeing 737s entered service in 1971. Between 1962 and 1972, IAC was called upon to support the military in several campaigns, first in skirmishes with China, and later with the wars with Pakistan that ultimately led to the creation of Bangladesh. Confidence and Crisis in the 1970s and 1980s IAC announced a Rs45 million loss for 1972. The next year, the company had several incidents of aircraft damage or loss.

Labor unrest, high fuel costs, political burdens, and built-in inefficiencies added to the company’s problems. However, these were met with such resolve that IAC had the confidence to order its first wide-body jets, Airbus A300s, in 1975. A program to produce ground support equipment in Indian factories was part of the deal. In 1976, new routes stretched across political divisions to Kabul, Afghanistan, in the northwest, and the Maldive Islands in the south. The government allowed the formation of a few new limited service airlines in the 1970s: Air Works India, Huns Air, and Goldensun Aviation.

None of them had long life ps. Around 1979, IAC dropped the word “Corporation” from its name. Another national airline, Vayudoot, was formed in 1981 and tasked with carrying feeder traffic from India’s smaller communities. Indian Airlines’ managing director, Gerry Pais, was Vayudoot’s part-time chairman. Vayudoot was serving more than 100 destinations within India by 1990. The government also set up a helicopter corporation to serve off-shore oil fields. Britain’s Financial Times described Indian Airlines as the world’s third largest domestic carrier in the mid-1980s.

With business growing at better than ten percent a year, it was increasing its capacity. Indian Airlines ordered a dozen of the new Boeing 757s in August 1984. After Rajiv Gandhi, a former Indian Airlines pilot, became prime minister, this order was changed to Airbus A320s due to what were perceived as political reasons. However, the crash of an Indian Airlines A320 in Bangalore on February 14, 1990–the type’s second major crash globally in a two-year period–sorely tested management’s faith in the plane, which featured new fly-by-wire flight controls and electronic cockpit instrumentation.

As part of a plan to merge Indian Airlines with Air-India, the state’s international carrier, two leading young industrialists were appointed to chair the boards of the two companies in autumn 1986. Neither these plans nor the new chairmen lasted very long. In 1987, Indian Airlines carried 10 million passengers and earned a profit of Rs630 million ($48 million). However, the quality of its service was facing criticism, to be heightened by the coming entry of new carriers into the market. India’s chiefly domestic state-owned carrier, Indian Airlines Ltd. flies passengers and cargo to 59 domestic and 16 international destinations. Its fleet numbered 52 aircraft in 2000. Indian Airlines has traditionally based its network around the four main hubs of Delhi, Mumbai (formerly Bombay), Calcutta, and Chennai (formerly Madras). The airline carries about six million passengers a year and has a substantial freight operation. Origins The Air Corporations Act of 1953 amalgamated India’s dozen or so airlines, most of them undercapitalized, into two nationalized air carriers: Air-India Ltd. given responsibility for international routes, and Indian Airlines Corporation (IAC), the domestic airline. The eight airlines that were amalgamated into IAC included Air Services of India Ltd. , Airways (India) Ltd. , Bharat Airways Ltd. , Deccan Airways Ltd. (already 70 percent government-owned), Himalayan Aviation Ltd. , Indian National Airways Ltd. , Kalinga Airlines, Ltd. , plus the domestic operations of Air-India Ltd. IAC began operations with a fleet of 74 of the war surplus Douglas DC-3s that had founded its short-lived predecessors.

The airline also had three times as many employees as it needed, writes R. E. G. Davies, a situation that was slow to change due to the government’s refusal to allow layoffs. Davies also writes that the standard of maintenance was low and the airline suffered many accidents in its early years. IAC soon moved to bolster its fleet by ordering a few new de Havilland 114 Herons, retired after only a couple of years of service, and Vickers Viscount 768s, which were assigned to trunk routes. The DC-3s continued to supply feeder traffic; they soon began to be phased out by Fokker F-27s and Avro 748s.

IAC began flying short-haul jets–French-made Caravelles–in the mid-1960s. The Caravelles were so popular that IAC soon needed larger jets to on the routes between Bombay (Mumbai), Delhi, Calcutta, and Madras (Chennai) that formed the India’s domestic trunk network. IAC’s first Boeing 737s entered service in 1971. Between 1962 and 1972, IAC was called upon to support the military in several campaigns, first in skirmishes with China, and later with the wars with Pakistan that ultimately led to the creation of Bangladesh. Confidence and Crisis in the 1970s and 1980s

IAC announced a Rs45 million loss for 1972. The next year, the company had several incidents of aircraft damage or loss. Labor unrest, high fuel costs, political burdens, and built-in inefficiencies added to the company’s problems. However, these were met with such resolve that IAC had the confidence to order its first wide-body jets, Airbus A300s, in 1975. A program to produce ground support equipment in Indian factories was part of the deal. In 1976, new routes stretched across political divisions to Kabul, Afghanistan, in the northwest, and the Maldive Islands in the south.

The government allowed the formation of a few new limited service airlines in the 1970s: Air Works India, Huns Air, and Goldensun Aviation. None of them had long life ps. Around 1979, IAC dropped the word “Corporation” from its name. Another national airline, Vayudoot, was formed in 1981 and tasked with carrying feeder traffic from India’s smaller communities. Indian Airlines’ managing director, Gerry Pais, was Vayudoot’s part-time chairman. Vayudoot was serving more than 100 destinations within India by 1990.

The government also set up a helicopter corporation to serve off-shore oil fields. Britain’s Financial Times described Indian Airlines as the world’s third largest domestic carrier in the mid-1980s. With business growing at better than ten percent a year, it was increasing its capacity. Indian Airlines ordered a dozen of the new Boeing 757s in August 1984. After Rajiv Gandhi, a former Indian Airlines pilot, became prime minister, this order was changed to Airbus A320s due to what were perceived as political reasons.

However, the crash of an Indian Airlines A320 in Bangalore on February 14, 1990–the type’s second major crash globally in a two-year period–sorely tested management’s faith in the plane, which featured new fly-by-wire flight controls and electronic cockpit instrumentation. As part of a plan to merge Indian Airlines with Air-India, the state’s international carrier, two leading young industrialists were appointed to chair the boards of the two companies in autumn 1986. Neither these plans nor the new chairmen lasted very long.

PRANSAC ASSIGNMENT 1 ‘Using the B737 as an aircraft type, you are required to research on the inventions and innovations that have made this particular aircraft impact the development of the Commercial airplane. ’

Introduction

Aircraft The Boeing B737 is a short to medium wide range narrow body twin-engine body jet airliner. Originally designed in 1964, initially had its first maiden voyage in 1967 and joined into professional service in 1968. Company Boeing had been the number one professional plane company. This company controls 60% of a competitive commercial market and its professional aircraft goods and services account for more than 70% of Boeing’s income. Boeing’s products symbolize a complete family of jetliners in the variety of travelers and freight adjustments and wide-ranging abilities. The B737 has developed different series such as B737 Original, B737 Classic, B737 New Generation, and the newest Series 737 MAX. The Boeing 737 is the best-selling jetliner in aviation history.

Idea

In 1958 Boeing had design research for “A twin-engine feeder airliner to complete the family of Boeing passenger jets”. In Feb 1965 the first purchase was placed and the project went ahead. The 737 has since become the best-selling professional planes in planes record with more than 5,900 purchases from 225 clients so far. < Chris Brady. 1999. > Design Boeing wanted to design a real short-haul jet to compete with its competitors like the Caravelle, BAC One-Eleven & DC-9. However, they are way behind them. The DC-9 was about to fly, the One-Eleven was well into its flight test program and the Caravelle had been in service for 5 years.

They had some catching up to do. Designers Joseph Sutter and Jack Steiner began work on the 737 in November 1964. The original 1964 specification was for a capacity of about 60-85 passengers, an economical operating range of between 100 and 1000 miles and to be able to stay equal at a 35% load factor. As a result of final design talks with launch customer Lufthansa, the capacity was increased to 100, but the range and load factor figures still remain the same. < Chris Brady. 1999. > Invention/Innovation of the aircraft

Placing the Engines

Wing Mounted Engines

The wing-mounted engines provided the key benefits of decreased interference drag, a better C of G position, less noisy cabin, more useful cabin space at the back, front & aft side doors, easier access to engines for servicing, and required less pipework for fuel & bleed. The bodyweight of the engine also provides twisting comfort from the rise of the wings. Apparently this benefit was over-estimated and a set of wings were unsuccessful in static tests at 95% of the max load so the side had to be remodeled.

Disadvantage

The disadvantage of wing-mounted engines was that the size of the fin had to be increased for engine-out operation over centerline thrust aircraft. Also, due to the reduced ground clearance, the engines had to be almost an essential part of the wing, which in turn using a short chord. The engines extended both forward and aft of the wing to reduce aerodynamic interference and the straighter top line of the nacelle formed a streamline flow over the wing to further reduce drag. iii. Advantage Overall, the wing-mounted layout had a weight saving of 700Kgs over the equivalent “T-tail” design and had performance advantages.

Thrust Reversers

Thrust reversers were taken from B727 were found to be inefficient when used by the B737. Therefore B737’s thrust reversers were greatly improved, allowing the aircraft to land on shorter airstrips.

Type Of engine

The CFM56-3B-1 turbofan engine was chosen to power the aircraft, which yielded significant gains in fuel economy and a reduction in noise, but also posed an engineering challenge given the low ground clearance of the 737 and the larger diameter of the engine over the original Pratt and Whitney engines which were used for the earlier models such as the -100 and the -200.

However, overtime noise became an issue and many users opted for an alternative engine. As a result, Boeing and engine supplier CMFI solved the problem by placing the engine ahead of the wing, and by moving engine accessories to the sides of the engine pod, giving the engine a distinctive non-circular air intake.

Fuselage

The B737’s fuselage was especially one of its best-selling points. Its cross-section had been taken from the B727. More Space, more passengers This made the B737 to hold 6 wide abreast seats because this way it could take more passengers per load on board than its competitors.

In the B737 Classic series and the B737 Next Generation Series, the fuselage was lengthened to fulfill the demand for space in the aircraft and also help Boeing sustain its competitiveness in the aviation industry. Even More Space, more passengers In the B737 Original series, the fuselage was only able to contain the highest possible of 130 passengers in 737-200 while the B737 Classic series was improved and enhanced to provide for bigger and more economical aircraft. As such, the aircraft’s fuselage was prolonged to allow about 170 passengers on board.

B737 Next Generation

The B737 Next Generation series had even more changes to its uses. In commercial flying, the airplane’s fuselage was prolonged to allow the highest possible of 215 passengers on board. The B737 Next Generation also had its own business jet, BBJ1 and BBJ2 series and military aircraft, C-40 and AEW&C, series. The BBJ was regularly used by personal jet entrepreneurs, and organizations, because of its small dimension and fuel efficiency. The military series of the B737 encompass the AEW&C that is used for monitoring and radar operations, and the C-40, P-8 Poseidon, which assisted in military operations.

 Wings Changes had been made to the wings and the flight controls of the B737. Many improvements result in greater performance of the aircraft by generating more lift, increase in fuel efficiency, and reduce drag while most importantly being more economical.

Wings Extended

The B737-100 and B737-200 created too much drag for the aircraft, making it very costly to fly. Thus, the front flaps of the wings were extended towards the fuselage, providing greater lift and shorten the distance for the aircraft required to take off. The wing’s leading edge and p were also extended.

This is because when the leading edge is being extended, the upper chamber will be pushed forward towards the leading edge and thus makes the airflow on the upper camber have a higher airspeed and as a result create more lift, due to the decrease in static pressure.

Composite Material

The B737’s flight controls were mostly made of composite material instead of aluminum alloy to reduce the weight of the aircraft. To generate more lift and greater performance during cruising.

Winglets were added from the B737-700 model onwards and the B737-300. Winglets reduce induced drag caused by the vortex on the wingtips.

Fly-by-wire system control In the B737 MAX, it has integrated the new fly-by-wire system control to allow for the more efficient performance of the aircraft. Fly-by-wire (FBW) is a system that replaces the conventional manual flight controls of an aircraft with an electronic interface. The movements of flight controls are converted to electronic signals transmitted by wires. The fly-by-wire system also allows automatic signals sent by the aircraft’s computers to perform functions without the pilot’s input, as in systems that automatically help stabilize the aircraft.

Conclusion

Thus the B737 is able to generate more lift and reduce drag on the aircraft. Therefore the B737 is able to move faster and increase fuel efficiency, reducing cost and fuel. Allowing Boeing to have a greater advantage in the competitive Aviation Industry. Conclusion Over the years, Invention and Innovation of the aircraft such as the fuselage, wing, engine, and nacelles, the B737 was able to have sustainable growth. This allowed Boeing to stay ahead of its competitors. These results in having more Boeing planes chosen by airlines compared to other domestic carriers.

Currently, Boeing faces significant competition from its rival Airbus A320. While trying hard not to lose out, Boeing made improvements such as the new B737 Max series, which combines the use of more high-tech devices to help Boeing compete with the Airbus bus latest series, the A320 Neo. However, the B737 MAX is only due in 2017 and it is in its last levels of examination. As such, this gives Boeing the time to enhance and completely improve the abilities of the B737 MAX to help improve its durability later on improvements. Deliveries are scheduled to begin in 2017.

References

Chris Brady. History & Development of the Boeing 737. ” History & Development of the Boeing 737. N. p. , Sept. 1999. Web. 27 June 2012. <http://www. b737. org. uk/history. htm>.

“Fly by Wire. ” Wikipedia. Wikimedia Foundation, 23 June 2012. Web. 28 June 2012. <http://en. wikipedia. org/wiki/Fly_by_wire>. “Boeing 737 – American Flyers. ” Boeing 737 – American Flyers. N. p. , n. d. Web. 28 June 2012. <https://www. americanflyers. net/airplanes/boeing_737. htm>.

“Boeing 737RE. ” Wikipedia. Wikimedia Foundation, 27 June 2012. Web. 28 June 2012. <http://en. wikipedia. org/wiki/Boeing_737RE>.