Aircrafts Business Expeditions - Term Paper Example

Air Freight Transport Introduction Airlines industry has been experiencing glance from the past profuse year. The amalgamation of airlines is conversely not much-admired since history depicts mergers and acquisitions of airlines have led them to disastrous circumstances. The air transport mechanism has colossal significance and importance as trade and business transactions through this mechanism has remarkable value. The international trade specifically is carried out through airlines. The issue of high cargo cost as compared to water shipment is often uplifted but air cargo service is more swift and rapid in nature. Businesses tend to opt for air cargo due to quick and safe on time delivery. The cargo handling and processing procedure is critical as goods need to be transported elegantly and safely (Wensveen, 2012,p.14). Airlines throughout the globe ensure to deliver best cargo services as revenue generation from cargo is more than passengers’ shipment. The purpose of this paper is to elucidate about the acquisitions and deployment of aircrafts into the fleets. The key factors involved in the aircrafts addition to the fleets have been elaborated. Furthermore, the air cargo handling procedure along with the difference from handling passengers and luggage is demonstrated. The intention remains to present the entire view about the airlines logistics management. Acquisitions and Deployment of Aircrafts: The addition of aircrafts into the fleet is a matter of serious concern for the organization. Several elements need to be examined before taking this step. Initially the need and requirement paradigm is explored. The strategic business units dig in that either it is adequate and necessary to pursue for this step or not. The organizational expeditions are certainly expanded by opting for the option of adding aircrafts into the fleet. The mergers and acquisitions in the airlines industry have not worked out pretty well in the past. The only successful merger was of Air France with KLM in 2004, making it Air France KLM. The newly merged company escorted for adding new aircrafts into the fleet but that decision was made after one year operations collectively (Gudmundsson, 2010, p.48). The management of aircrafts previously became an issue for the organization but they sorted it out by inaugurating information systems into the firm. All the operations were virtually connected and scheduling of flights and delivery of cargo was certainly more transparent and viable. After getting heads up in the respective area, Air France KLM went to the addition of aircrafts into the fleet (Romano, 2012, p.23). Some of the key factors that need to be considered airline’s decision in adding aircrafts into the fleet are given below. Organizational Status: The airlines need to determine that either it is internally strong enough to deploy and acquire aircrafts into the fleet. The strategic business department of the airline needs to watch this matter deeply and scrutinize that either is the organization capable to handle the load. The requirement aspect wants to be covered too. The addition of aircrafts into the fleet without acknowledging, that either airlines market position is stable or not is vital. The organization propensity and tendency is crucial too. The addition of aircrafts requires expansion in staff and more finances for the organization. Some of the airlines go for acquisition and deployment step without working on these steps (Borken-Kleefeld, Berntsen and Fuglestvedt, 2010, p.5702). The precise understanding of the magnitude of coming events is important in the airlines industry. There are several external and internal factors that affect business endeavors of airlines industry, so it is eminent for the firms to concisely acknowledge the organizational status before stepping into something deep. The customers and business requirement is secondary issue but it is of much more significance. Airlines should have well equipped technological setup that would create synergy between the departments at all levels. The connotation of departments help in getting view and feedback about the decision firm would be making (Alkaabi and Debbage, 2011, p.1520). Costs and Capacity: The acquiring of aircrafts requires high costs for the airlines to bear. The costs of aircrafts are enormous and the organization needs to assess its financial position too. The mergers and acquisitions of the airlines in the past went down because they took steps out of their capacity and skill set. The high costs involved in the business growth and purchasing of aircrafts were not kept prime by the organizations. These wrong doings by the strategic decision makers took the entire firm down. The cost of aircrafts is tremendous and airlines purchase old aircrafts for the cargo services. Moreover, passenger planes built in 1960s and 1970s are utilized by the airlines too as the modern aircrafts are too much expensive (Corbett, Hawker and Winebrake, 2010, p.174). The aircrafts producing firms have been giving crafts on rents too as some airlines cannot afford to buy it. The on-rent aircrafts need to be were well care off and the repairing and mechanical work needs to be taken care of by the airlines too. In some cases, producer signifies about the mechanical work to be handled by the production plant itself but the usual ongoing minor repairing is done by the airlines mechanical team. The capacity and costs are hence important chapter in the airlines industry and needs to be well addressed in the decision making phase (Alkaabi and Debbage, 2011, p.1523). Expansion and Extension: The orientation of businesses remains to expand the canvas of their business proceedings and explore new paths and directions into the industry. Airlines industry also focuses intensely on the expansion part. The addition of aircrafts within the fleet is surely due to the expansion strategy carried out by the firm. In this way airline has the opportunity to expand their clientage, business and discover new destinations. The expansion strategy is necessary to understand in the freight businesses because the more concerned area for the airline owners is to grow cargo destinations. Air France KLM cargo turnover is 14% and it is the most successful of the firm’s activities (Wensveen, 2012, p.62). The extension of business and up gradation of technology goes in the same direction. The addition of aircrafts also requires systemized setup to successfully execute business endeavors in the market. Technology interventions in the organization assist employees and management to get on the same page and work vividly for the organization’s success ((Borken-Kleefeld, Berntsen and Fuglestvedt, 2010, p.5703). The above discussed all key factors regarding acquisition and deployments of aircrafts need to be gazed. Air Cargo Handling: The airport management cell notifies about the enormity of managing employees, passengers, cargo and security concerns at airports. The management of all these chapters is distinct and it requires qualified individuals to take care of. The airport management and administration initiates working on the departmental level where it is entitled that how departments would execute business endeavors. The supervision of cargo and passengers is entirely different and unique. There are diverse elements involved in the command on both these entities (Romano, 2012, p.36). The detailed review about their differences is elaborate below: The Major Differences: The passengers’ management is rough and tough kind of business as human behavior varies in nature. The passenger processes are extensive and wide-ranging. There are numerous check-in and check-out areas at the airports that administer and check about the passenger moving and directions. From the entrance to the airport till the exit, there are several barriers that passenger need to be passed, for which remarkable number of staff is employed. The management of human beings is critical task too because the nature of humans is diverse. Any sort of happening can take place from the passengers end therefore everyone from the airport’s staff remains active and dynamic at their respective job roles (Corbett, Hawker and Winebrake, 2010, p.179). The handling of cargo is not much of a trick task. Previously there was too much human effort involved in the management and loading of cargo but technological measures have eased things and there are minimal hurdles to pass over now. In fact the cargo mechanism is very easy and trouble-free to operate. The management of cargo is simple because it is non-living. The cargo material is checked and scanned precisely on the airports where it is made sure that banned products are not shipped. Moreover, it is made sure that no substance would be carried that would damage aircraft and the rest of the cargo. The luggage is essentially carried to the aircraft via vehicles and now systematic uploading of luggage takes place in the aircrafts too which has eased human being livings. In the same manner luggage is transported back to the airport after passing through the major security hurdle only, where luggage is checked by the officials through scanning machines. Afterwards it is delivered to the rightful owners (Romano, 2012, p.51-54). Conclusion The above illustrated detailed review about aircrafts business expeditions signify that there are several areas of concern for the airlines industry before stepping into business proceedings. The acquisition and deployment of aircrafts needs to be managed with great care and affection because it is bit complex in nature. Any wrong decision or step can collapse the whole organization. The supervision of passengers’ processes and cargo services illuminate that cargo management mechanism is simple and effortless as compared to passengers’ management. The only obstacle in cargo administration is security check-ups which are also not of great concern as contrast to human’s organization. Bibliography and References Alkaabi, K. A., & Debbage, K. G. 2011, The geography of air freight: connections to US metropolitan economies. Journal of Transport Geography, 19(6), 1517-1529. Borken-Kleefeld, J., Berntsen, T., & Fuglestvedt, J. 2010, Specific climate impact of passenger and freight transport, Environmental science & technology, 44(15), 5700-5706 Corbett, J. J., Hawker, J. S., & Winebrake, J. J. 2010, Development of a California Geospatial Intermodal Freight Transport Model with Cargo Flow Analysis Gudmundsson, S. 2010, Mergers vs. Alliances: The Air France-KLM Story. Rouledge Romano, L. 2012, Organizational structures: focus on the airline sector; the Air-France-KLM Cargo reorganization. Pearson Edition Wensveen, J. G. 2012, Air transportation: A management perspective, Ashgate Publishing. Read More