Etihad Airways Current Operations Management System - Essay Example

Student Name: Name: Title: Operations Management System: Etihad Airways Course: Institution: Table of Contents Table of Contents 2 Introduction 3 Analysis 3 Etihad Airways’ Output 3 Etihad Airways current operations management system and the operational capabilities 4 Existing problems and weaknesses in the current operations management system 8 Reorienting Operations and the Theories 9 Recommendations and Implementation of the Changes 11 Conclusion 13 Bibliography 14 Introduction Etihad Airways is an airline of UAE which was established in 2003 and its headquarters is in Abu Dhabi. The company has grown fast and it’s among the fastest growing airlines worldwide. Etihad Airways operates over 1,300 flights weekly to eighty seven passenger and cargo destinations within fifty five countries. The key business of the airline is the global air transportation of passengers but the airline also operates Etihad Holidays, Etihad Cargo as well as an international contact center organization as a part of its commercial group. Etihad Holidays provides diverse innovative holiday options within numerous destinations and they include skiing, tours, city breaks and such. Etihad Cargo provides an all-inclusive range of cargo services across Etihad Airways’ network as well as servicing its numerous all-cargo destinations and international charters with a fleet of up-to-date regional freighter aircraft. Etihad Airways aims at reflecting the finest Arabian hospitality and at improving the status of Abu Dhabi as the center of hospitality between East and West (D’ Angelo 2010). Analysis Etihad Airways’ Output Presently, Etihad Airways severs eighty seven destinations within fifty five countries and this includes passenger routes to many destinations. As a component of its long term goal, the company has a plan of operating up to 130 major business and holiday destinations worldwide by 2020. The airline is dedicated to offering its customers with the best travel experiences both during the flights and on the ground as well. In addition, Etihad Airways also provides numerous convenient ground services, which include the passengers being picked-up within twenty eight destinations worldwide as well as premium lounges within Dublin, Abu Dhabi, London, Manchester, and Frankfurt(D’ Angelo 2010). Etihad acknowledges the value of new technology in managing its operations and hence it constantly researches and invests considerably within its digital channels. By developing an all-inclusive digital strategy, the airline focuses on further using the potential of e-commerce as well as digital communication to improve its operation management system. Additionally, the company aims at constantly rolling out to provide the best services and superior experience to its customers. According to William (2007), operations management is involved with the designing and management of products, services, supply chains and processes. He further provides that operations management deals with the acquisition, development as well as usage of resources that an organization needs to deliver the goods and services its customers want and hence on the ground, Etihad Airways has introduced various services whose aim is to make the travel experience as relaxed, smooth and fast as possible(D’ Angelo 2010). Etihad Airways current operations management system and the operational capabilities The operations department at Etihad Airways is responsible for operations management and hence it has the responsibility of delivering a safe, timely and competent customer experience of the best quality. In spite of managing a 6% increase in flights as well as a 4% increase for the number of passengers flying, Etihad annulled just 0.53% of the planned flights. The airline has consecutively surpassed its internal on-time performance targets (D’ Angelo 2010). Etihad has made substantial changes to a number of operational systems and in order to meet the necessity of managing the steadily increasing number of flight, state-of-the-art flight and crew planning systems has been implemented in the airline’s operations management system. Basically, this flight planning system lowers fuel consumption, carbon emissions, in addition to reducing operations expenditures; through application of algorithms that optimize the route flown, take-off weight and balance along with other technical information. Additionally, this enables the airline to access the operational flight planning information like maintenance, weather conditions and forecasts, air space and also navigation; within one central location (Johnston 2005). Etihad operations management system has an onboard health system for monitoringpassengers displaying symptoms on long-haul flights. Still, the airline has a security operational center which centralizes all aviation security communications as well as risk assessment across the network (D’ Angelo 2010). For airport and network operations, the airline has implemented major improvement at the Abu Dhabi. With the rapid growth of the fleet and network schedule pressurizing the airport facilities, the implemented changes consist of: Terminal 1 premium lounges have been refurbished Check-in self-service shops have been introduced within each and every terminal Premium limousine arrivals lounge have been introduced Introduction of a priority luggage collection service within the Terminal 3 luggage room (Comtex 2005). In addition, Etihad has the Hub Efficiency Projected whose sole purpose is for improving costs and service quality and reliability and this has helped the airline in saving significantly and improving the services considerably. For instance, the least connecting time at the Abu Dhabi center was reduced from 75 minutes to 60 minutes and this has significantly improved sub-four hour connectivity as well as hub traffic flows across the airline’s network (D’ Angelo 2010). As part of operations management, safety of the passengers as well as the quality of services provides to the customers is important to Etihad Airways. The airline has a Safety Management System whose function is for managing safety proactively throughout the airline. All workers undertake training on the safety management system. The Safety Action Group is responsible for following up and implementing corrective actions in addition to proactive deliberation on operational safety measures. Etihad Airways has a safety manual that supports Safety Management System and assists in embedding safety within the airline’s working processes (D’ Angelo 2010). Etihad Airways has an operational reporting system that ensures the best levels of quality and safety for the company. This system gathers information on incidents within an airport or office setting. This consists of any hazard, or incident allied to buildings, facilities, maintenance, planes or employees at an airport terminal, office, network operations control or check-in. For the technical and maintenance services, Abu Dhabi Aircraft Technologies carries out all of the airline’s heavy maintenance and most of similar engineering undertakings. This has seen Etihad save some of its operations management costs. For example, in 2011, a working group with both Etihad and ADAT generated 2011 budgeted savings of AED 55 million on technical expenditure. Additionally, the group worked on mutual enhancements to quality of engineering and competence at the hub. As part of its growth plans, the airline recently ordered a very large aircraft and the expansion consists of addition of more offices to Etihad’s global network and increasing the number of employees. To assist in operations management and to make sure that Etihad is in a position of maximizing its growth potential, it was necessary for the airline to make sure that it had implemented robust information communications infrastructure. Etihad Airways had started utilizing solutions from various vendors but in late 2004, the airline contracted Microsoft for an Enterprise Agreement and this has enable Etihad to access numerous Microsoft applications as well as obtain many other benefits that have helped the airline in standardizing on Microsoft technologies (D’ Angelo 2010). For managing its inventory control (Lowson 2002), program changes, passenger re-accommodation, and also to yield management functions, Etihad Airways is utilizing Amadeus Altea. This has resulted into Etihad improving its decision making abilities and hence enabling the airline to increase yield in addition to reducing its operational costs. Amadeus Altea is a leading international technology giant in travel and tourism industry and therefore successful implementation of Amadeus Altea inventory for Etihad has come with a number of benefits. For instance, implementation of the new generation IT solution has strengthened Etihad Airways’ ability of maximizing returns of each seat. Essentially, integration of IT solutions for Etihad e-ticketing as well as reservations system assists the airline in operating more effectively through management of operations such as sales, fares, flight timetables and all allied inventory of the services. Through adoption of the centralized system, this will increase online marketing network because it is able to access it worldwide. Therefore, this has led to saving time and money, convenient to customers, improving yield that has resulted to a considerable rise in sales (Johnston 2005). Existing problems and weaknesses in the current operations management system At times, there is congestion at Etihad airports. Congestion within air traffic control as well as ground operations basically inhibits growth within some areas. Bureaucracy is another problem in Etihad’s current operations management system. Even though bureaucracy is necessary for a company for operational purpose, a high level of bureaucracy takes a lot of time in completing an otherwise simple and not-time consuming task. Etihad Airways is extremely bureaucratic and this at times leads to delays in offering services to its passengers and customers in addition to internal cross functional departments. In such a setting, inter-dependency is decreased among diverse cross functional via good individual and professional relationship for even functioning of daily operations (Johnston 2005). Thirdly, even though Etihad has partly become online services provider, paperless office is challenging state for the airline. Furthermore, some survey outcomes indicate that severally passengers gave had delay of their flights. This indicates that the airline spends a lot of money compensating waiting customers. The airline also has a few old aircrafts and this causes increased maintenance and operation expenses, and imposes higher insurance premium rates. It is extremely complex to operate and airline with old aircrafts. Also various types of aircrafts results to higher operations costs. Etihad does not have a very big fleet and has different kinds of aircrafts; Etihad is compromised of different kinds of aircrafts manufactured by various manufacturing companies. To sustain this fleet, Etihad Airways is required to employ various classifications of pilots, engineer as well as utilize various types of spare parts. This results to the airline into experiencing higher operating expenses (D’ Angelo 2010). Reorienting Operations and the Theories Operations can be reoriented through improved network planning and control as the basis for improved punctuality. The initial step to tackling poor planning and control is developing an integrated planning procedure, whereby all the planning departments work within the same context and also utilize the same systems and similar rotational plans (Richard 2010). Harmonizing the level of detail utilized in the entire planning process will be valuable because the plans for all functions should connect seamlessly to those of prior as well as successive functions. Generally, accomplishing a high level of detail early within the process can be weighty but it will lead to a more stabilized operational platform. A comprehensive network structure and suitable block, ground and slack time deployment are a key to an effective operational plan. Addition of slack time is costly. A probable solution is: identifying the flight numbers where the punctuality effect on the entire schedule is the highest and some suitable buffers for them and on the other hand tighten time frames for other, less important flights. Additionally, operational processes on “day zero” are important success factor. Outlining an operations control is very important. Etihad still operates distinct planning and control centers for the main operational functions. In reorienting operations at Etihad, these should be centralized or work closely together and operate using integrated processes, systems in addition to a common command structure (Richard 2010). Specifically, hub operations struggle a lot with on-time performance during peak times when networks overlap with peak traffic ladings. In order to manage this problem, Etihad Airways should explore new ways of sharing the airspace, either in intensive actions with other airlines, ATC providers, airport operators as well as regulators or through driving for new market driven procedures of time allocation. In numerous instances, Etihad schedule is rarely implemented as planned. Basically, airline schedules are normally subject to interruptions because of adverse weather conditions, aircraft breakdowns, crew delays, in addition to security breaches. When the schedule of the airline is interrupted, it is essential for the airline to mitigate the effect of the interference and recover the schedule for it to go back to its usual operations (Richard 2010). In order to recover the schedule every time there is a disruption, Etihad should consider a number of objectives. For instance, Etihad Airways is supposed to reduce the deviation from the planned schedule through reduction of flight delays, cancellations along with crew swapping. Additionally, it should not just observe to the maintenance requirements of various aircrafts at the appropriate time, but it should also follow the regulations governing the work regulations of the crew on varying flights. What’s more, Etihad should comply with air traffic control guidelines and schedules that control and manage traffic within the airspace as well as at airports. Lastly, Etihad Airways should reduce the total cost of recovery through avoiding costly decisions like flight cancellations, calling extra crew, as well as passenger rebooking on different airlines. Therefore, the facilities at the airline’s airport ought to be planned effectively to accommodate the planned flight program economically (Richard 2010). Etihad Airways can adopt other systems in order to boost its operations efficiency. A recommendable system that the airline can adopt is GE Aviation for implementing new “FLOW Project” management system. This will enable Etihad Airways to lower both fuel and delay expenses. In addition, this management system can optimize Etihad Airways’ traffic flows in the existing air traffic control system by providing the airline with an elevated control regarding their arrivals as well as hub timetable and this can assist the airline in considerably reducing its operation costs. Still, Etihad can implement other systems in the airline business that can raise efficacy on the airline’s part and also uphold enhanced customer service (Richard 1997). According to the chief operations officer of the airline, within the coming ten years, the number of its flights will triple and hence it is important that Etihad implements a modern crew planning systems in order to heighten crew operation. An advanced modern crew planning system can assist the airline in increasing operational efficacy and in improving its strategic resource planning procedures with the eventual aim of sustaining its long-term business strategies (Jay 2008). Recommendations and Implementation of the Changes For enhanced performance and saving working hours, Etihad Airways is supposed to implement an all inclusive computerized operational system in the organization as this will reduce vast paper work. More importantly, the effective manpower of Etihad Airways is tacking the tasks extremely efficiently in the vast competitive market. Etihad Airways should provide all its employees with modern technologies such as computer, internet facilities and such. As a result, this will facilitate quicker customer services from the part of the workers. However, it is good to note that the management of Etihad Airways has recognized the need of technological improvements. Moreover, congestion in the airlines’ airports can be reduced by offering flights from less congested airports; technological enhancements like a constant descent approach should be able to do away with local congestion. Implementations of a comprehensive structural change within facilities like air traffic control. All essential further airports and skilled staffs will be available during the course of the forecast duration; short-term growth rates underlying the forecast entirely consider the rate at which these resources will be availed. Etihad Airways should consider modernizing all its operations. The airline should introduce and implement modern cost effective inventory control system. The company should also update its websites constantly as this will enable the customers to access the most recent and complete information from the company’s websites. The airline should also introduce and implement e-ticketing, e-reservation as well as procuring of spare parts. For flight schedule delays, the management of Etihad Airways is supposed to always carry out a delay analysis as a routine procedure and also take appropriate steps to retain the flight program within an acceptable delay range. Etihad Airways is supposed to improve its in-flight services. Steps can be carried out to make sure there is complete complement of cabin crew, competence among the cabin crew and provision of suitable flight crew training to make sure that the cabin crew is in a position to provide quality services to its customers all through. Finally, the Etihad Airways’ management should engender a restructuring program aimed at improving the airline’s operations. This can be accomplished through using the latest technologies in running the airline as well as through the skilled and devoted manpower of Etihad Airways with appropriate supervision and guidance from the management. Conclusion Operations management at Etihad Airways is exceptional. Through implementation of the latest technology, minimizing maintenance, training and repair expenses and flying to airports with less costly landing charges, the Etihad has passed on big saving to their clients and this has resulted to effective utilization of the airline’s resources. In addition, through selling of the flight tickets electronically or through the telephone, the budget of Etihad’s marketing expenditures are also reduced because there are no travel agent commissions that are paid and also no printing and posting of paper tickets. However, there are few problems in Etihad’s operations management system and this includes mismanagement of information, inadequate fleet planning, and poor flight scheduling and such. Even though Etihad Airways is one of the first choices for flights t several customers, in several aspects, the operations of the airline need improvement. As a result, below recommendations are have been proposed to be taken into consideration for future improvement and development of an exceptional operations management system within Etihad Airways. Bibliography Burke, R., 2003, Project Management: Planning and Control Techniques, John Wiley & Sons, West Sussex, England. Comtex, 2005, UAE-cooperation: Etihad Airline to consolidate economic relations with SA. Qatari New Agency. D’ Angelo, A, 2010, Good new for Etihad customers as the UAE airline heads, Business Report. Jay, H., 2008, Principles of Operations Management, 8th edition, Pearson/ Prentice Hall. Johnston, R., 2005, Service Operations Management: Improving service delivery, 2nd edition, Prentice Hall, New Jersey. Richard, M., 2010, Introduction to Airline Management, Sage, Los Angeles: Lee, J., 2005, Operations Management: strategy and analysis, 7th edition, Prentice Hall, New Jersey. Lowson, R., 2002, Strategic Operations Management: The New Competitive Advantage, Routledge, New York. Richard, J., 1997, Operations Management: customer focused principles, Richard D. Irwin, Chicago. William, J., 2007, Operations Management, 9th edition, McGraw Hill, New York. Read More