Airlines provides the only transportation network across the globe and it is crucial for global business development and tourism enrichment. Air transportation is one of the most important services to offer both significant social and economic benefits. By serving tourism and trade, it contributes to economic growth. It also provides jobs and increases tax revenues. Air transportation is essential for the fast movement of people and cargo shipments around the world. As the number of air travelers and the volume of air cargo is expected to continue to grow, there is also an increase in the pressure on all the contributors to the air transportation service to take advantage of opportunities and efficiently manage their service.
For proper management, there are a number of rules that the airline must follow. First, airline management must comply with the regulations of the airline’s home country. It must also take into consideration and comply with the regulations of the governments of the countries where the airlines fly to and from, and whose airspace they cross. governments typically watch competition between airlines and control airlines’ strategic decisions, such as merging, acquisition between carriers, market entry or exit and pricing, environmental regulations, security regulations, maintenance, and safety requirements.
Airline management should carefully consider the terms of their agreements with the different airports they serve. several factors affect these agreements, including available infrastructure (gates, runways, baggage handling, and so on), expected traffic, airport charges and incentives, competition from nearby airports, available landing slots, congestion, and operational curfews.
The needs and preferences of its potential customers, the travelers must be considered for effective management. For instance, the airline should consider schedule convenience, competitive fares, onboard services, punctuality, and efficient customer service. Failing to fulfill the needs and preferences of customers might lead to losing them to other competing carriers or other modes of transportation.
It is also imperative for the airline to participate in one or more alliances to expand its network coverage or share resources with other airlines. Several forms of alliance are available that reflect the level of cooperation between participating airlines. it is important for an airline to decide which alliance to participate in and how to share its resources efficiently with each member in the alliance to promote profitability.
Suppliers are crucial to the continuation of the airline’s operation. Airlines depend on suppliers to provide important items such as aircraft, fuel, spare parts, meals, employee uniforms, and so on. Also, in many cases, airlines outsource to vendors some of their jobs and services, such as aircraft maintenance, aircraft cleaning, ground handling, and sales. Therefore, an airline has to keep healthy relationships with its suppliers to continue operating successfully. Another entity in the air transportation industry that an airline has to deal with is unions. Different groups of workers form unions to achieve stronger negotiation power with airline management in terms of salary, benefits, or working rules. Keeping a good relation with labor in order to guarantee smooth operation of the business is one of the main objectives of airline management. Conflicts with unions might typically lead to negative actions by the unions, such as work slowdown or strikes, which usually impair the airline’s operation significantly. Finally, in most markets, there is tough competition between several airlines. typically, airlines continuously monitor the decisions of their competitors that relate to providing capacity, fare levels, fare restrictions, and departure times. in many situations, the decisions of the competing airlines proceed in a leader-follower pattern, where one airline takes an action and the other competing airlines try to find the best way to respond to this action. However, if airlines follow these steps, they could beat their competitor.