Proactive Management Must Prevail In The Ever-Evolving Airline Industry
Change is inevitable. How change is managed differentiates leaders from followers. Many airline industry leaders are taking a more proactive management approach that is built around short- and long-term strategies. Transitioning from a reactive state is not an easy task. Therefore, many airlines rely on external consultants to help develop strategies and drive the transformation.
Whether an airline enlists the services of a consulting firm or develops its own proactive management plan, the investment and time spent to convert from a reactive to a proactive operation are well worth the efforts and can have a profound impact on every department across an airline.
In the areas of pricing and revenue management, for example, leading carriers are adapting a competitive pricing strategy based on utilizing real-time data for their markets. Through enhanced technology and the creation of new business processes, the result is “active” fares management, where pricing is adjusted in reaction to competitor pricing within the same market. Recent trends indicate that carriers are investing in Big Data to create real-time pricing models, which allow them to react quicker to market changes. Insights gained from the data result in the ability to formulate a longer-term strategy based on current market trends.
Big Data For Quicker Reaction Times
Many airlines around the world are leveraging Big Data to develop real-time pricing models in an effort to react much quicker to market changes.
From a profitability perspective, leading-edge technologies enable airlines to examine their current network and identify underserved destinations that could allow for potential expansion. A market evaluation is another important element, which allows airlines to closely monitor market demand, capacity, flight frequency and type of schedule. The data collected during a market evaluation allows for forward thinking and how to best position for revenue growth.
Operations, in its nature, is a reactive department, but the use of proactive processes and communications increases efficiency and benefits travelers. According to masFlight, an aviation consulting and data analysis group, since January, flight delays and cancellations within the United States affected more than 47 million passengers. Many of these delays or cancellations can be attributed to inclement weather. These weather events, both routine and extreme, serve as an excellent example of how different departments must have the necessary proactive communications channels to successfully function.
For example, ground operations and scheduling must work closely together to ensure that delays are minimized and quickly resolved while communicating with customer service so customers can be promptly notified. Having the correct proactive communication channels in place as well as a well-defined irregular operations strategy minimizes the effect on an airline’s operations and its customers.
Proactive Communications Channels
During the first quarter, more than 47 million passengers in the United States were affected by flight delays and cancelations. Regardless of the cause of these schedule interruptions, it’s critical for an airline to implement proactive communications channels across various departments, such as ground operations and scheduling.
Keeping the pulse on the customer is critical to any business, and with the advent of social media; it is imperative that airlines understand what their customers think and actively monitor how they are meeting customers’ expectations.
In doing so, airlines often seek assistance from independent resources, such as business consultants, to conduct a baseline assessment of individual customers, which includes measuring their Net Promoter Score (see related article: Voice Of The Customer). As part of this process, in-depth research, analytics and business consulting should be conducted to benchmark the airline and understand its customers’ expectations and satisfaction levels. This provides a holistic view of customers and helps identify the key areas where customer experience efforts should be focused. Using the Net Promoter Score, in addition to measuring the attributes that influence an airline’s score, consultants can quantify and show not only how the airline can soar above its competitors, but the benefits it will gain from having a short- and long-term plan.
Promoting A Positive Work Environment
To avoid excessive employee turnover and the inability to hire skilled talent who will contribute to an airline’s success for the long term, an airline must keep employee morale high as part of its proactive management strategy.
Going from a reactive to proactive setting may look like a daunting task, but it is achievable and requires a firm structure. Because an airline’s leaders and employees are heavily involved with the day-to-day challenges; fixated on solving problems as they arise, they often reach out to an objective, outside resource, such as a consultant, to help manage the transition through some direct steps:
- Plan and Prioritize. One of the first critical steps is taking advantage of time and creating a prioritized scheduled, which gives airlines the ability to anticipate problems. Consultants can help an airline plan through having first-hand experience of dealing with large and complex carriers. They know the main issues airlines face, industry best practices and the necessary solutions that need to be adapted.
- Define Processes. One of the most important parts of a proactive setting is clearly defined processes, which help ensure that all departments are aligned and run efficiently. Well-documented processes provide more structure and reduce the potential for problems. A consultant understands that no two airlines are alike, therefore, he or she can tailor processes to fit an airline’s specific needs to achieve maximum efficiency.
- Manage Risks. Despite having robust processes in place, carriers will still face certain issues that require more attention than others. Planning activities and highlighting the areas where risk is involved helps avoid problems and determine what departments will be impacted through the changes. A consultant will be able to develop a plan for all of an airline’s departments to efficiently manage risk from high to low probability levels.
- Employees are Key. Morale must be high for any company to achieve long-term success, otherwise employee turnover may be high and it will be difficult to attract professionals who can help strengthen and grow the business. In a reactive management setting, morale can be low from the large amount of high pressure situations. Providing encouragement and promoting a positive work atmosphere will help transition to a proactive environment.
- Continuous Improvement. One of the key factors for any company is to constantly evolve; creating an environment for continuous improvement. It is essential to encourage employees to look for ways to innovate and improve their areas of the business.
- Reporting. Reporting will identify root causes of problems that need to be addressed as well as identify opportunities. This information should be shared across the organization. Consulting can assist with the development of reports and continuous feedback loops to drive Six Sigma/Lean Initiatives.
Carriers must approach the future with a proactive standpoint, which can range from long-term flight scheduling to evaluating additional markets to serve. A proactive management style will help lessen the amount of stress within the company and encourage employees to be innovators.