Abstract
The administration of airline operations and planning is a complex subject encompassing many tasks. Long-advanced strategic decisions are the foundation of the planning process. Demand forecasting is an instance of a planning issue characterized by an extended lead time (Thomas et al., 2016). The operations phase commences one to two months after the planning phase concludes. Consequently, in the aviation industry, operations management is a critical component in executing airline and other strategic plans. In the aviation industry, in addition to strategic planning and operations management, other elements, such as airport administration efficiency, also contribute to airlines’ success. One of the primary obstacles that impact the aviation industry is the presence of airport delays and challenges (Thomas et al., 2016). This paper aims to examine the problems that arise when the operations management process fails in the aviation industry, focusing on ten OM decisions.
Delta Airlines Inc. was compelled on September 25, 2018, to suspend all domestic flights in response to a technical malfunction that disrupted specific airline systems and operations (Schlangenstein & Lee, 2018, para 2). One hour later, Delta announced that it had reinstated all policies and that the technology malfunction had not caused any flight disruptions or safety concerns. Nevertheless, extant data indicates that Delta has encountered several of these systems, each of which has caused operational disruptions. For example, Delta was compelled to suspend its domestic flights in January 2017 due to a comparable system failure. Due to the system malfunction, over two hundred flights were canceled, stranding many passengers in various locations throughout the United States. Furthermore, a significant breakdown of Delta’s worldwide computer systems occurred in August 2016, resulting in many flight cancellations.
Introduction
Delta’s operations in Atlanta were significantly disrupted in April 2017 due to a severe storm. However, the situation was further exacerbated when the company’s staff location and assignment systems failed, resulting in extensive delays (Golzer & Fritzsche, 2017). As an expression of remorse and to satisfy their clientele, Delta was compelled to award twenty thousand bonus frequent-flier miles or $200 flight vouchers to tens of thousands of passengers impacted by the over 4,000 canceled flights. The numerous technological malfunctions that have caused operational disruptions at Delta suggest that the company has incurred substantial financial and reputational losses due to its heavy reliance on technical systems. Delta is not the sole airline in the United States to have encountered operational difficulties due to technical malfunctions. For example, in December 2018, a substantial electrical disturbance caused by a fire at the Atlanta International Airport rendered operations inoperable and stranded tens of thousands of passengers flying Delta and Southwest. As a result, technological system dependence constitutes a substantial OM challenge for the aviation sector. The paper thoroughly examines the operation management issue in its analysis of ten OM decisions using scenario samples from Delta Airlines.
Narrative Body/Literature Review
Goods and Services
Operation management in the aviation industry, whether at an airline or any other firm, should prioritize implementing strategies to maintain uniformity in costs, quality, and resources across all business divisions. The technological malfunction has hindered Delta Airlines and other impacted airlines from maintaining uniformity in expenses, excellence, and available assets. Delta Airlines has been compelled to distribute flight coupons and frequent-flier miles bonuses to customers as an apology for delayed flights due to issues with the OM system and other technological difficulties.
Quality Management
Airlines must comprehend consumer demands and fulfill their expectations in this area of OM. Client expectations are ensured to be fulfilled through quality control on products and services, whereas market research aids in comprehending client requirements. The recurrent technological issues that Delta has encountered impede the airline’s progress in this domain of OM. The technological issue-induced flight cancellations and delays indicate that the airline needs to fulfill customer expectations. When passengers purchase an airline ticket, they know the carrier will transport the item on time. As a result, customers are frequently dissatisfied with operational issues that result in flight cancellations and delays, such as the system problems Delta encounters (Golzer & Fritzsche, 2017). Flight vouchers and apologies may not fully compensate for the financial losses experienced by specific customers due to flight cancellations or delays. Specific clients, particularly those undertaking business travels or engagements, incur enormous losses following rescheduling their excursions. Many customers whose schedules were disrupted by Delta’s flight delays vented their discontent on social media, demonstrating the degree to which the airline is impeded in its ability to implement sound quality management practices due to technological issues.
Process and Capacity Design
The decisions in this domain of Operations Management mostly revolve around formulating policies that align with all production objectives, encompassing resources and technology—such decisions aid in optimizing the operational efficiency of an airline. The technological problem responsible for cancellations and postponements of flights poses a significant challenge to Delta’s operational efficiency (Hyun Park et al., 2017). The occurrence of system failures that impact flight schedules is a reason for concern for Delta Airlines. Delta’s operations managers must comprehensively understand all possible approaches to resolving system failures, such as a total overhaul, to safeguard the airline against future operational deficiencies.
Location
Establishing an operational strategy is an essential decision in operations management. An organization should consider procurement and logistics when selecting a location strategy; this includes how supplies will be gathered and the transmission of goods and services from the organization to the designated destination and vice versa. Additionally, the location strategy must consider the responsibilities of public relations and sales in the chosen areas. Delta’s advertising techniques are significantly impacted by technology issues, as evidenced by the frequently canceled or delayed flights that cause considerable consumer dissatisfaction (Hyun Park et al., 2017). The numerous system failures tarnish Delta’s reputation, which can negatively impact the airline’s market share in the fiercely competitive airline industry. Hence, the technological challenge Delta currently needs to grapple with impedes its ability to effectively execute its location strategy objectives.
Layout Design
Decisions about the arrangement, distribution, and utilization of resources at workstations are critical elements of OM as they dictate the movement of products and services. Delta maintains a pleasant atmosphere for both its employees and customers. The provision of premium travel services that are satisfactory to the passengers of regional aircraft ensures that the organization’s layout is well-suited to this demographic. Additionally, business class tickets are available for intercity travel, contributing to the organization’s overall efficiency. The organization has been on-trend by ensuring that its clients are comfortable. Aside from the peculiarities of the cabin’s design, the initial service is intended to astound the guests. The cabin designers create luxurious places bearing the logos of aircraft manufacturers and appeal to customers of all social classes and ethnicities.
Delta has implemented a recognition strategy consistent with the overarching flight plans, organizational vision, and core values. The organization employs three methods: formal and informal, daily, and one accompanied by a documented recognition procedure. Delta Airlines considers credit a collection of programs comprising local recognition, milestone events, output, result management, corporate enterprise, and customized locally-tailored rewards. These programs are not a single program but an umbrella of initiatives that evaluate and consistently enhance performance (Spring et al., 2017). The organization’s upper management heavily supports the definition and documentation of the organization’s recognition strategies and policies.
Additionally, it aids and participates in the recognition of employee efforts. Furthermore, the senior management team’s responsibilities include identifying and allocating resources to maintain the company’s reputation and popularity. The management team evaluates the program’s results and implements any necessary adjustments to ensure the organization’s continued success.
Effectiveness-based evaluation of the Delta acknowledgment program’s results about the organization’s strategy and the program’s specific objectives. The employee and manager engagement rates, contacts of recognition, satisfaction ratings, and the program’s frequency and performance metrics comprise the models of measurement (Sanya & Shehab, 2015). The primary aim of Delta’s communication approach was to ensure that the organization’s recognition programs achieved effective branding. The objectives are being met by utilizing the media to promote independent programs and establishing MyDeltaRewards as the Delta brand’s recognition. The organization has demonstrated its commitment to its brand through various initiatives, including providing educational resources, training junior staff and senior management, and educating and assisting individuals at workstations regarding appropriate corporate conduct. The organization has established guidelines and a protocol to govern informal gatherings, formal events, and community engagements.
Additionally, the organization has formulated strategies for adaptability and change. Each program within the organization is strategically developed to achieve a specific business objective. The organization employs a standardized form for program development, performance evaluation, and deployment. This conclusion is drawn from the informal and formal assessment of the program.
The organization modifies its recognition program in response to the varied needs of teams and employees. Therefore, the company’s experiences could be more exceptional within the global business community. Aiming to serve and acknowledge a substantial workforce of approximately 50,000 individuals from different nations who speak distinct languages, the organization operates in a highly competitive environment that presents a formidable challenge. Organizationally, the recognition program is a critical component and a priority for all businesses. While acknowledging the existence of this phenomenon, it faces competition from various financial constraints, operational business priorities, and the institution’s capacity to provide and sustain it. Throughout periods of success and difficulty, the organization has endeavored to surmount numerous critical obstacles while maintaining a steadfast commitment to the value of its personnel. Despite the prevailing economic and leadership circumstances, the organization has upheld its dedication to acknowledging employees for significant achievements, routine contributions, and performances linked to the company’s business strategy and outcomes.
Human Resources and Job Design
A multitude of human resource administrators possess a variety of perspectives and abilities that facilitate the execution of the organization’s daily operations. Delta requires the person in charge of human resources to allocate time to ensure that every staff member consistently utilizes identical tools for recognition. Human resource managers are primarily responsible for identifying the organization’s comprehensive recognition strategy, understanding its recognition resources, elaborating on the plan’s suitability for an airline performance monitoring system, providing self-evaluations of employee capabilities, and elucidating the scientific principles underlying recognition and employee rewards.
Typically, upon commencing employment with Delta Air Lines, newly hired personnel complete the online enrollment process for MDR, the overarching digital infrastructure that facilitates all operations. The structure comprises over twelve reward and recognition programs, of which only three are readily available to each active employee. Therefore, it serves as an exceptional introduction to the company for newly hired personnel (Cook & Billig, 2017). The human resources department ensures executives know the organization’s strategy and provides consistent operational updates. The Operational Updates provide critical performance metrics, business updates, and recognition of exceptional performers and their achievements.
Service Acknowledgement at Delta Air Lines allows one to acknowledge extraordinary administrative accomplishments. Service Recognition is an annual event; the awards are augmented annually. While these recognition programs provide advantages for employees and management, their fundamental purpose remains improving customer satisfaction, inspiring executives, and acknowledging their diligent endeavors. Customizing the experience and involving the top management in the awarding procedure requires considerable effort. From the initial year to year five, the recipients are presented with ten to fifteen redesigned lapel badges accompanied by an individual message from the CEO. An anniversary pendant is unique for each year. The manager designated for that department bestows the insignia upon the recipients. Upon reaching the ages of twenty and forty, the staff is presented with a lapel pin that allows them to choose an item from various honors. The additional festival is subject to the scrutiny of each director (Jaffe, 2016). After a Delta employee retires, the coordination of a recognition ceremony is entrusted to the supervisors; this ceremony must adhere to the individualized Delta Employee Recognition Guidance Principles.
Supply Chain Management
The organization applies a systematic supply chain management strategy to the pricing and distributing of the requested products. The Delta supply chain system evaluates various agents regarding their conflicting objectives, the healthy balance of their supply chain linkage, and their income distribution agreement in the face of fluctuations in demand. The organization’s system incorporates decentralized partner networks and agile systems that operate autonomously yet collaborate. The system connects the airline with customers in real-time. Additionally, the organization has expanded the capacity of its facilities to accommodate both the current demand and the projected future increase in departures. The organization’s supply chain comprises technological advancements and human processes (Orasanu, 2017). To reduce the number of items passengers misplace on board, Delta’s management innovated in implementing RFID labeling on customer baggage and has made substantial investments in digital technology and supply chain management. By effectively utilizing acquired information, it possesses a highly effective method for forecasting demand (Kanki et al., 2019).
Additionally, Delta has informed shareholders that the company’s future profitability will be enhanced due to the reduced fuel purchases, which will result in fuel hedging contracts and, consequently, lower fuel prices. Delta anticipates a pre-tax profit increase of over 11 percent in the upcoming fiscal year, including fuel cost reduction’s net benefit. Presently, jet fueling expenses have decreased by one-third.
Inventory
Delta Airlines follows an inventory accounting methodology that includes fuel stocks, expandable component inventories, and supply inventories. The fuel inventories consist of refined goods, feedstock, and blend stocks, which represent final products that are transferred at a price that can be recovered. The corporation procures jet fuels from refinery companies through a third-party exchange platform. These fuels include gasoline, diesel, and other refined petroleum products the refinery facility produces. The calculation of costs is done using the first-in, first-out (FIFO) method. The expendables, referring to the aircraft kit stocks, can be affordably recycled, repaired, or reconditioned once removed from the airplane. The items are valued using the Moving Average Cost method and recorded as expenses during the activities (Kanki et al., 2019). The linked fleet’s remaining lifespan includes an allowance for obsolescence.
Scheduling
The airline operates more than 325 routes spanning six continents worldwide. The schedule contains the precise times and dates related to the airport. It is crucial to consult the airport monitor for the most current information, as the software allows for modifications to both schedules and gates. Additional flights may be available during holidays to accommodate the increased number of passengers and those listed in the itinerary. Additionally, there may be planes that are now undergoing repair or experiencing other unavoidable circumstances (Loukopoulos et al., 2016). The company also arranges itineraries for international as well as domestic flights.
Maintenance
Delta Airlines’ maintenance operations are conducted by the TechOPs division. The division comprehensively oversees aviation maintenance, repair, and refurbishment. The division is fully equipped and equipped to provide services to the airline with over 10,000 seasoned professionals who are extensively knowledgeable about aviation systems. This division’s operational proficiency guarantees that clients are provided with exceptional service, thereby facilitating the organization in sustaining its industry-leading position and that of its entire fleet. The personnel, supervisors, engineers, and technicians have over two decades of extensive professional background. They are equipped with all the necessary resources to provide the client with high-quality services (Orasanu, 2017). In addition, the organization has completed comprehensive quality security and compliance protocols, attaining all industry-required certifications. The organization has established maintenance as a fundamental component of OM.
Conclusion
Airlines worldwide have been encountering setbacks resulting from the aforementioned operational management considerations. Airlines have faced various harsh conditions in the global commercial climate. Based on the analysis, Delta Airlines must address these deficiencies to enhance its competitiveness within the airline sector. Technology has significantly transformed the aviation business and improved service delivery. Over the past decade, insufficient allocation of funds towards technology has led to several difficulties arising from system malfunctions and computer downtime. These problems tend to hinder the airline’s functioning for long durations severely.
References
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