New organizational model for airlines

Pricing should balance accuracy with practicality and be detailed enough so that airlines can make intelligent trade-offs between the level of service they provide and the costs they incur.

Business units must also formalize their performance expectations for the products and services they exchange internally. Control is achieved through the hierarchy and functional groupings that correspond to the different areas of the airline business.

Airport management structure

This characteristic of the corporate structure ensures that Southwest Airlines maintains effective business functions that are arranged in a way that strategically supports the entire organization. BCAS will continue to coordinate the working of the various agencies to ensure that all security norms are followed by them. No Greenfield airport will normally be allowed within an aerial distance of kilometers of an existing airport. Regional Hubs: Government is keen to encourage development of regional airlines based on small aircraft to provide air-linkages in the interior areas of the country. Ground Facilities Speed is the essence of air transport. Whether business units should purchase catering, maintenance, ground handling, and other services internally or externally also is a question for the center. Except for user developmental fees, there will be total freedom for airport operators in the matter of raising revenue through non-aeronautical charges and there will not be any Government control over the same. Domestic: The domestic aircraft movements at all Indian airports put together have been forecasted to grow at the rate of 4.

There is also a great potential for helicopter operations in off-shore oil exploration and production, movement of food grains and essential commodities in remote, hilly and inaccessible areas, traffic management in metropolitan cities and so on.

After a year of poor profitability, the airline and other business units began to explore ways of jointly reducing costs. The new process dramatically increased the number of participants in the scheduling process but reduced the airlines' ground-handling costs by around 10 percent.

New organizational model for airlines

Focus is more on learning than on method. Once an aviation group's top executives have less responsibility for day-to-day operations, they can focus on strategy. A new organizational model for airlines They should consider the business unit model, but independence must be balanced by coordination. A self-organizing system requires a strong current goal or purpose. A group's airlines and support businesses may need its brand to attract customers. The identification of Regional Hubs will be made on the basis of origin-destination surveys, traffic demand and the requirements of the airlines. In one group, for example, the freight division was seen as boring until it became an independent unit with an attractive CEO role. As a result, the Swedish unit moved swiftly to develop a tailored response to growing competition from local low-cost carriers: it simplified the service offering on domestic flights, added 12 direct flights from Stockholm to other European destinations, and adopted pricing based on one-way travel.

As a major low-cost carrier with international operations, the company has an organizational design representative of a business configuration that enables strong corporate headquarters in controlling all areas of operations. Air traffic control services will normally be provided by AAI, except for approach and aerodrome control services, which may be provided by licensed ATCs engaged by the airport operators.

how airlines operate

Back to top To avoid these difficulties, large, diversified aviation groups should contemplate a major overhaul to replace the functional organization with a number of business units that have more autonomy and accountability for their performance.

The AAI will set standards of performance in various areas of passenger and cargo handling, so that both ICAO standards as well as comparable standards at similar airports around the world, are achieved. In that case, transfer prices should be based on the company's actual costs plus a fair return on capital.

The rise of low-cost carriers is altering the nature of competition in the industry by spurring some traditional airlines to expand into businesses that offer higher margins or require less capital than their core passenger operations.

Rated 9/10 based on 11 review
British Airways Organizational Structure