AVIATION MANAGEMENT - 21AE61

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Module -3

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By
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Dr. Anand S N
 Airline Marketing Environment

Airline is part of the travel and tourism service industry, where rivals compete to offer the best
experience in spite of similar end products. Unlike organizations that sell tangible products such
as cars, stationery, or food brands, the airlines sell elite experience to their customers. The
experience that they provide to the customers is intangible as well as invisible.

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Airline − Marketing

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The airlines find out insights of the marketing environment using a powerful model of analysis
called the PEST analysis.
PEST Analysis
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The field of marketing comes up with a useful model for the study of an organization’s
Marketing Environment. This model proposes that the factors should be categorized into
Political, Economic, Social, and Technological (PEST).
This model turns up reliable for the airline industry to understand
➢market growth or decline,
➢ business position, and
➢direction for operations.

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➢Political Factors: Fear of terrorism, political instability in the country, deregulation of

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government policies.
➢ Economic Factors: Economic growth or instability in the country.
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➢Social Factors: Aging population, change in holidaying tastes, change in family structures,
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uncertain labor.
➢Technological Factors: High-speed electronic devices, fuel-efficient aircrafts, Internet.
Knowing the Airline Customers
To market their service, the airlines works on understanding their customer’s psyche,
demographics and needs.

Airline Customer Segmentation

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The airline customers are divided into the following segments:

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➢ Old Travelers: They are aged customers probably retired and go on holidays frequently.

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➢Business Travelers: They are frequent flyers and form a large segment.
➢Budget Conscious Travelers: They look for the most inexpensive airline without knowing
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much about the different airline services.
➢Loyal Travelers: They travel frequently and as they travel frequently with the same airline,
the airline offers some benefits to them and also the miles.
➢Urgent Travelers: They share a small market segment and do not fly frequently. They fly only
for unexpected causes.
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What do Customers Expect Before, During, and After the Flight?
Here are few considerations the customer thinks of before selecting an airline service:
➢Timeliness in Service: Delays at baggage counters and in flight departure create a
lasting negative impact on the passengers.

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➢Assurance of Reliable Service: The airline staff committed to service and highest

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customer satisfaction. The quality of service is always up.

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➢Convenience: Easy check-ins systems and ticket reservations.
➢Attentiveness: The airline staff that recognizes needs and works a step ahead to meet
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them constructively.
➢ Comfort: Adequate knee and leg room around seat.
➢Meals: Free in-flight meals of satisfactory quality.
➢Safety and Security: Emphasis on safety and security.
Customer Psyche and Airline Marketing
For airline businesses, it is very vital to retain the customers, increase their loyalty, and
facilitating the spread of positive word of mouth.

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The airline marketing staff reads the apparent needs and true needs of the customer.

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The airlines can do this by providing them the best experience of flying with them as the
customers rely mostly on their own experience with the airline.
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If the airline is successful in meeting its customers’ needs, then it makes a notable name
and money for itself.
 Airline Marketing on Social Media
➢All the airlines around the world understand that today’s customers are tuned to Internet
almost all the time hence, the airlines tend to make a striking presence on Internet. The airlines
are leveraging ways to reach their customers using social media too.
For example,
➢Cathay Pacific Airways has created a Facebook page to display deals, promotions, limited-

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period offers, and videos about the airline.

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➢Qatar Airways has a strong presence on Twitter with sharing news, events, up selling, and
conveying the information on how the company is doing.
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➢Turkish Airlines marketing policy depends on using hashtags for building relevance and
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authenticity, whereas Emirates is using Instagram.

Maintaining presence on the social media is a 24x7 work for which the airlines hire people, who
know business strategies, write powerful content, and have the knowhow of brand positioning.
➢The airlines use Meme Jacking, the concept that spreads from person to person via
Internet. It is an effective way to create a buzz around the brand.
➢The airlines also create webpages and videos based on the customers’ location and
culture. The videos go viral and work without bringing out the customers from their
comfort zone.

Airline Alliances

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An alliance necessarily means an agreement between the airlines to work in cooperation

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substantially.
Why Airlines Form Alliances?
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Working in alliances has benefits for both the airline and also the travelers.
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Benefits of Alliance for Airline
➢ Reduction in maintenance cost
➢Reduction in operating staff
➢Reduction in investment and procurement costs
Benefits of Alliance for Traveler
➢ Lower ticket prices due to lowered operational costs.
➢ More options for departure times to choose from.
➢ More destination options.
➢ Shorter travel time.

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➢ Access to a large range of airport lounges shared with alliance members.

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➢Faster mileage rewards in single account on several different carriers.

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Major Airline Alliances
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There are three major airline alliances:
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❖Star Alliance (founded in 1997, 27 member airlines)
❖Oneworld (founded in 1999, 15 member airlines)
❖SkyTeam (founded in 2000, 20 member airlines)

Air India is a member of Star Alliance.

 Airline Loyalty Marketing
Many companies around the world earn more than 75% business from their loyal customer
base of about 20%.
What is Airline Loyalty Marketing?

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It is a business practice of the airlines to build trust among frequent customers by rewarding

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them so that they conduct business with the company continually.

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Loyalty marketing motivates the customers to remain loyal to the business by adopting loyalty
programs.
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For example, “the customers are given an electronic account with the airline where the
airline can deposit frequent flyer miles which can be redeemed for the next trip”.
For Which Airline Customers Loyalty Marketing Works?
Loyalty marketing works with the customers who need to fly frequently or who choose the
business with a particular airline because it successfully satisfies customer requirements
uninterruptedly.
 Total Quality Management in Aviation Industry
Total Quality Management (TQM) defines a management concept for long-term success through
customer satisfaction.
In a TQM effort, all members of an organization participate in improving processes, services and
their work culture with a goal to meet or exceed the expectations of their customers.

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Modern airports have acknowledged the importance of ensuring a positive customer

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experience.
Focusing on passenger satisfaction rankings and passenger spending, airports should review
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their strategies for the future to incorporate the concepts of TQM and customer experience.
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Hence, “TQM is the ideal mechanism for airports to combine, coordinate and integrate quality
management initiatives in the diverse airport activities while ensuring continuous quality
improvement.”
➢Customer service and experience has evolved into an integral component of every airport’s
strategy and has similar principles with TQM.
➢Both require a holistic approach and can become sources of competitive advantage and
brand differentiation.
When we look across other industries - for example, Uber and Airbnb – we can see great

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examples of how customer experience design and thinking can make significant, positive

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changes to a brand and an industry; all by putting the customer at the center of their business.

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“Participation of every member of an Aviation industry in the field of enhancing services,
products, processes and the way in which they can handle the work is called TQM.”

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THE EIGHT BASIC ELEMENTS OF TOTAL QUALITY MANAGEMENT

1 FOCUS ON CUSTOMERS:
Quality level is decided by the customers. Whatever a firm does to enhance quality
development—practicing talented workers, incorporating quality into the design
function,enhancing computer software, or handling new mathematical tools, the

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consumer has the final say if the efforts were worthy.

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2 INVOLVEMENT OF EMPLOYEES:
Every employee should participate in giving their fullest to achieve their collective
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objective. The commitment of all employees will be achieved only if they can be brave
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enough in the workspace, when entitlement has arisen, and has been enriched with good
ambiance.
Work systems with high performance incorporate with repeated enhancement attempts
handling common business functions.
3 ACTIVITY-ORIENTED:

4 INTEGRATED SYSTEM:
An organization consists of various functional specialties which are often structured into
structured areas, it is the process which is intercorrelation with these operations which
is the prime objective of TQM.
➢ Larger processes are combined from micro processes, and all these processes join to

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form into a business processes which is mandatory for structuring and executing

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strategies. Everyone should get along with the mission, the quality policies, the guiding
principles, and crucial activities of the firm. Performances of business should be observed
and conveyed continuously. U
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➢ After the Baldrige National Quality Program criteria, an integrated business system can
be modelled and incorporated with the ISO 9000 standards. Each and every firm has a
special work custom, and good quality custom has been implemented. To increase the
predictions of the consumers, workers, and other shareholders, an intercorrelation system
connects business enhancements dimensions in a way to radically enhance.
5 ANALYTIC AND SCHEMATIC APPROACH:
Analytic and Schematic approach is understood to be the most critical area of the quality
management to gain an organization’s mission, and targets. It also involves the formation of an
analytic plan that also incorporates quality as the most critical area.
6 RECURRENT ENHANCEMENT:

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Recurrent enhancement is the major part of TQM. Recurrent enhancement also drives a firm to

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be both statistical and innovative to become more ambitious driven and more advantageous at
catching up with the predictions of stakeholder.
7 REALITY-BASED RESOLUTION MAKING: U
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It is important to understand how good a firm is working; performance measures facts are
necessary. An organization that gather and interpret facts in order make accurate decisions,
achieve consensus, and predict based on history is required by TQM.
8 COMMUNICATIONS:
When there is a change in organization or in everyday operations, successful communications
play a key role in handling self-esteem and in enhancing confidence level in employees at their
best heights. It also involves analytics, timeliness, and [Link] dimensions are recognized
to be so important to TQM that many firms structure them in such a way that as a series of
important values and facts on which the firm is to be functioned.

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GENERAL STRATEGY MODEL FOR IMPLETING TQM SYSTEMS
➢ The higher administration studies and makes decisions to be committed to Total Quality
Management.
➢The company examines the present cultures, fulfilment of clients’ needs, and assurance.
➢ The higher administration visualizes broader and standards that need to be followed and
conveys them.
➢ Total Quality Management main idea is expanded on the base of procedures above.

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➢ The company visualizes and higher priority for customers’ demands and solution to satisfy the

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customers.

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➢ The administration shows the important steps by which the company meets the fulfillment of
the clients.
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➢Management foresees how the team is formed for improvement of step effort.
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➢The impetus of the Total Quality Management efforts is headed by the guiding council.
➢ The heads provide separately to the efforts by hosting outlining, practicing, tutoring, or other
ways.
➢ DPM and stabilization takes place.
➢Advancement is examined, and the plans are corrected as required.
➢Continual staff apprehension & responses on statuses that are given, and a token of
appreciation is accepted.
 ADVANTAGES OF IMPLEMENTATION OF TOTAL QUALITY MANAGEMENT

➢Improvement in the organizations' stature – mistakes & issues are determined fast.
➢Increase in fulfillment of clients, which brings to more sales.
➢A certain decline of waste resource

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➢Increment in productiveness since the employees efficiently uses their time.

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➢Increment in the readerships on a lengthier time.
➢The workforces are motivated by more work, hard work of the team and in making
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certain decisions based on Total Quality Management.
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➢ Reduction in cost.
➢There should be a continuous improvement in the growth.
To overcome that all problems and make a company successful may implement following
things:
➢ The way the staffs view the management by the company.
➢ administrative style.
➢ execution of changes.
➢ Connection

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➢ Methods and procedures.

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➢ Provisions and conditions.

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➢ Attitude of staffs.

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 Strategic Management
Strategy - Meaning
“Strategy is the determination of the long term goals and objectives of an enterprise and
the adoption of the course of action and the allocation of resources necessary for carrying
out these goals”.
Strategy is management’s game plan for strengthening the organization's position,

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pleasing customers, and achieving performance targets.

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Definition:
The term ‘strategic management’ is used to denote a branch of management that is
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concerned with the development of strategic vision, setting out objectives, formulating and
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implementing strategies and introducing corrective measures for the deviations (if any) to
reach the organization’s strategic intent. It has two-fold objectives:
➢To gain competitive advantage, with an aim of outperforming the competitors, to achieve
dominance over the market.
➢To act as a guide to the organization to help in surviving the changes in the business
environment..
 ❖Strategy comes from Greek word “ Strategos ” which means a plan to compete

with enemy .

❖Strategy means that a plan of action designed to achieve a long term overall
Introduction:

goals.

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❖ So, the Strategic management meant that making an action plan to achieve

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the organizational goals effectively and efficiently.

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❖ We can say that it a game plan of any organization to compete with
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competitors and stay for long time in market on top position.

❖ It is an integrated system, which focuses on all departments of an

organization (marketing, finance ,production ,R&D and so on ..) to achieve the

organizational goals successfully.

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➢ Strategic management involves the planning, implementation, and control of an
enterprise in order to achieve its long-term objectives.
➢Strategic management is utilized to assess the internal and external factors affecting an

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enterprise, forecast potential situations, and enhance the enterprise's future

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performance.

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➢Strategic management consists of designing, implementing and evaluating the cross-

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functional decisions and defining the objectives of the organization.
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➢Strategic management involves the gathering of on-going activities comprehensively
and focuses on integrating the management, accounting, production, marketing, research
and information systems to achieve an organizational goal
Steps of Strategy Formulation
The steps of strategy formulation include the following:

Levels of strategy formulation

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Environmental Threat and Opportunity Profile (ETOP)
What is ETOP analysis?
ETOP analysis (environmental threat and opportunity profile) is the process by which
organizations monitor their relevant environment to identify opportunities and threats
affecting their business for the purpose of taking strategic decisions.
Example of ETOP Analysis
Lets take the example of the environment analysis of Hindustan Aeronautics Limited (HAL)

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Benefits of Strategic Management
1. Strategic management is the process of formulating, implementing and evaluating
strategies to achieve its organization objectives.
2. Organization acts proactively rather than reactive to any situation.
3. Communicates the mission, vision, objectives and policies to all the employees to
understand the purpose of organization

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4. Gathers information from external and internal environment assists in formulating

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strategies for the future success of an organization

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Dis-advantages of Strategic Management
1. Time Consuming
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2. Ignorance of other Managerial Functions
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3. Unsatisfaction in employees
4. Depression due to failure in target
5. Protest of employees
6. Demand for more reward and facilities
7. Dependability on-practical planning
8. Changes in technical factors
 Supply Chain Management

The supply chain is commonly regarded as a sequence of material suppliers, production facilities,
distribution services and customers which are linked together by the flow of goods and
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"Supply chain management covers the flow of goods from supplier through
manufacturer and distributor to the end user."

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Supply chain management (SCM) in the aviation industry plays a crucial role in ensuring the
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efficient and effective flow of parts, materials, and information from suppliers to manufacturers,
operators, and ultimately to end-users (airlines and passengers).
 Goals and Objectives of Supply Chain Management
The goals and objectives of SCM in the aviation industry include:
Cost Efficiency: One of the primary objectives is to reduce costs throughout the supply chain
process. This involves optimizing procurement, transportation, and inventory management to
minimize expenses associated with parts and materials.
Quality Assurance: Ensuring that all components and materials meet stringent quality standards

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is essential to maintain the safety and reliability of aircraft. SCM aims to establish robust quality

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control processes and select reliable suppliers to uphold these standards.
On-time Delivery: Timeliness is critical in aviation to prevent disruptions to operations. SCM
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focuses on achieving on-time delivery of parts and materials to ensure aircraft maintenance
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schedules are met and downtime is minimized.
Risk Management: Aviation SCM aims to identify and mitigate risks such as supply chain
disruptions, geopolitical issues, natural disasters, and supplier bankruptcies. Strategies include
developing alternative sourcing options and establishing contingency plans.
Inventory Optimization: Balancing inventory levels is crucial to avoid stock outs while
minimizing excess inventory costs. SCM uses forecasting techniques and demand planning to
optimize inventory levels and ensure parts availability without overstocking.

➢Compliance and Regulatory Requirements: The aviation industry is heavily regulated, and
SCM must ensure compliance with aviation safety standards, environmental regulations, and

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customs regulations across different countries.

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➢Supplier Relationship Management: Building strong relationships with suppliers is essential

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for effective SCM in aviation. This involves collaboration, communication, and performance

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monitoring to foster trust and reliability.
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➢Sustainability: Increasingly, sustainability and environmental considerations are becoming
integral to SCM in aviation. This includes reducing carbon emissions through efficient logistics
and selecting suppliers with sustainable practices.
➢Technology Integration: Leveraging advanced technologies such as RFID, IoT, and blockchain
can enhance transparency, traceability, and efficiency in aviation SCM. Integrated systems
improve real-time data visibility across the supply chain.
➢Continuous Improvement: Lastly, SCM in the aviation industry emphasizes continuous
improvement through performance metrics, feedback mechanisms, and process
optimization. This iterative approach helps in adapting to changing market conditions and
improving overall supply chain performance.

“Overall, the goals and objectives of SCM in the aviation industry are geared

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towards enhancing operational efficiency, ensuring safety and quality, minimizing

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costs, and maintaining compliance while adapting to the dynamic and complex
nature of the aviation sector”.
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Technology plays a crucial role in optimizing inventory management across the aviation supply
chain, leveraging advancements such as blockchain, IoT (Internet of Things), and AI (Artificial
Intelligence).
Each of these technologies offers unique benefits that address different aspects of inventory
management, benefiting various stakeholders including manufacturers, suppliers, airlines, and
maintenance organizations.
COMPONENTS OF SUPPLY CHAIN MANAGEMENT

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Block chain:
Blockchain technology facilitates secure, transparent, and efficient transactions and data sharing
across the supply chain. In aviation, blockchain can be used to:
Supply Chain Traceability: Blockchain provides an immutable record of transactions and
movements of parts, ensuring the authenticity and traceability of components from suppliers to

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end-users. This transparency reduces the risk of counterfeit parts and improves regulatory

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compliance.
Smart Contracts: Automating contract execution through smart contracts can streamline
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procurement processes and payments, reducing administrative overhead and ensuring
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compliance with contractual terms.
Data Integrity: Blockchain ensures that data related to parts, maintenance history, and
certifications are tamper-proof, thereby enhancing reliability and reducing errors in inventory
management.
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IoT (Internet of Things):
IoT involves connecting physical objects embedded with sensors, software, and other
technologies to collect and exchange data over the internet.

In aviation, IoT can:

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➢Real-time Tracking: Sensors on components and equipment can provide real-time location

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and condition monitoring. This capability enables predictive maintenance, reducing
downtime and optimizing inventory levels by accurately predicting part replacements.

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➢Inventory Optimization: IoT sensors can monitor inventory levels in real-time, triggering
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automated replenishment orders based on actual usage and demand patterns. This
minimizes stockouts and excess inventory, optimizing working capital.
➢Enhanced Efficiency: IoT-enabled devices can automate routine tasks such as inventory
counting and monitoring, freeing up human resources for more strategic activities.
AI (Artificial Intelligence):
AI encompasses machine learning algorithms and techniques that enable systems to learn
from data and make intelligent decisions. In aviation supply chain management,
AI can:

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➢Demand Forecasting: AI algorithms can analyze historical data, market trends, and external

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factors to forecast demand accurately. This capability helps in optimizing inventory levels and

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reducing the risk of overstocking or stock outs.
➢Predictive Maintenance: By analyzing sensor data from IoT devices, AI can predict
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equipment failures and maintenance needs. This proactive approach minimizes unplanned
downtime and ensures that the right spare parts are available when needed.
➢Optimization Algorithms: AI-powered optimization algorithms can optimize inventory
placement, routing, and logistics to minimize costs and improve efficiency throughout the
supply chain.
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Save money

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Win of time Enhance the customer experience

Benefits Across Stakeholders:
Manufacturers: Improved visibility into demand patterns helps manufacturers optimize
production schedules and reduce lead times. Blockchain ensures compliance with quality
standards and regulatory requirements.
Suppliers: IoT and AI help suppliers forecast demand more accurately, optimize inventory levels,
and streamline logistics, reducing costs and improving service levels.

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Airlines: Real-time tracking of parts and predictive maintenance capabilities reduce aircraft

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downtime, enhance safety, and improve operational efficiency. Blockchain ensures parts

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authenticity and traceability.

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Maintenance Organizations: AI-driven predictive maintenance improves fleet reliability and
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reduces maintenance costs. Block chain ensures transparency in parts procurement and
compliance with regulatory [Link] conclusion,
“The integration of block chain, IoT, and AI technologies in aviation inventory management
enhances transparency, efficiency, and reliability across the supply chain. By leveraging these
technologies, stakeholders can optimize inventory levels, reduce costs, improve service levels,
and ultimately enhance the overall operational performance of the aviation industry”.
A TYPICAL SUPPLY CHAIN MAP FOR AVIATION INDUSTRY

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Introduction to Aircraft
Maintenance
Management

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Effective aircraft maintenance management is
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crucial for ensuring the safety, reliability, and
longevity of aircraft. This field encompasses a
wide range of responsibilities, from regulatory
compliance and parts inventory to workforce
planning and data analysis.
Regulatory Compliance and
Safety Standards

Regulatory Oversight Safety Culture

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Aircraft maintenance operations Fostering a strong safety culture

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are heavily regulated to prioritize among maintenance personnel
safety and airworthiness. is critical, emphasizing vigilance,
Adhering to guidelines set by attention to detail, and a
aviation authorities is essential.
Ucommitment
improvement.
to continuous
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Auditing and Inspections

Regular audits and inspections help ensure compliance and identify areas
for improvement in maintenance practices.
Maintenance Planning and Scheduling

Predictive Maintenance
Reactive Maintenance
Leveraging data and advanced analytics to
anticipate and schedule maintenance based Addressing immediate, unplanned

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on predicted component failures. maintenance needs to keep aircraft

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operational and airworthy.

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1 2 3
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Preventive Maintenance

Proactive, scheduled maintenance to

address known issues and prevent potential
problems before they arise.
 Inventory and Parts Management

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➢Procurement ➢Warehousing ➢Logistics

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Efficiently sourcing, Optimizing storage Coordinating the
purchasing, and
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and organization of timely delivery of parts
receiving replacement inventory to ensure to maintenance
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parts and parts are readily facilities, minimizing
components. available when aircraft downtime.
needed.
Maintenance Workforce Management

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➢Staffing ➢Training and Development ➢ Scheduling

Ensuring the right mix of U

Providing ongoing education Coordinating technician
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skilled technicians, and skill-building schedules and shifts to
mechanics, and support opportunities to keep the optimize productivity and
personnel to meet workforce up-to-date and minimize downtime.
maintenance demands. adaptable.
Predictive and Preventive Maintenance
Strategies

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❖Condition Monitoring
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❖Scheduled Inspections ❖Proactive Maintenance
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Continuously analyzing Regularly scheduled Performing preemptive
aircraft systems and maintenance checks to repairs and replacement
components to detect identify and address of parts to prevent
early signs of issues before they unplanned downtime
degradation or failure. become problems. and optimize aircraft
availability.
Data Analytics and Reporting

1 Maintenance Tracking 2 Predictive Analytics

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Collecting and analyzing Leveraging data-driven

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data on maintenance insights to anticipate and
activities, component plan for future maintenance
performance, and aircraft needs.
utilization. U
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3 Reporting and Dashboards

Presenting maintenance performance metrics and trends

to support decision-making and continuous improvement.
Continuous Improvement and Optimization

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✓Enhancing Processes Evaluating and refining maintenance procedures to

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increase efficiency and reduce errors.

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✓Leveraging Technology Adopting innovative tools and techniques to

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streamline operations and boost productivity.
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✓Fostering Innovation Encouraging a culture of continuous learning
and problem-solving to drive advancements in
aircraft maintenance management.
Electronic Centralized Aircraft Monitor (ECAM)

Aircraft Communications,
Addressing and Reporting
System (ACARS)

Air Traffic Services Unit (ATSU)

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Real-Time Managed
Distribution Service (RTMDS)

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SOURCE: Capgemini