According to the article “The regional airline sector is likely to emerge smaller but stronger,” opined Munetsi. “The next five years are critical for the SADC aviation sector in that policies have to be aligned with the reality of the airlines that serve the markets. Many studies have demonstrated the inarguable catalytic effect of aviation to the gross domestic product of any country. As the region’s economies strive to regain the momentum of the pre- pandemic era, the authorities must realise that the airlines are an integral part of the solution. Southern African airlines will find themselves at the forefront of ensuring the recovery of economies through their role of providing uplift for passengers and goods. This will enhance the intra-region and, by extension, continental trade which will result in the growth of economies.”As an operations analyst in the office of the CEO of Airlink, you have been tasked to undertake a comprehensive analysis of Airlink’s operations strategy. The primary objective of the analysis is to establish how well current operational capabilities match the post-COVID-19 requirements of customers. Secondly, the analysis is expected to address the need for improved understanding and practice of operations strategy in order to position Airlink as an airline that provides superior value to customers at an affordable price in a manner that responds to the needs of customers. Please note: Your discussion should emphasise the following: (1) a meaningful definition of, and elaboration on, the concepts of ‘operations strategy’ and ‘operations strategy analysis’ as well as, (2) a detailed step-by-step evaluation of operational capabilities. It is important that your discussion is made relevant to Airlink rather than a generic discussion that has no bearing on the Southern African airline industry. AASA has been lobbying SADC States to standardise regional travel requirements andprotocols.But Covid-19 is still casting its shadow over the airlines, both regionally and globally. "Ifwe talk about human resources, there should be no doubt that the pandemic-drivenretrenchments and furloughs globally across the industry have created a negativeperception of the airline industry as a secure career choice," points out Munetsi. "Evenbefore 2019, the industry in Southern Africa was grappling with a looming skills shortageand a diminishing talent pool. It is going to be even tougher attracting bright youngtalent, especially in countries such as South Africa and Namibia, where thoseperceptions were reinforced by State-owned airlines laying off hundreds of staff. Webave to redouble our efforts to make the airline industry attractive again."For South Africa in particular, an issue is that, during the pandemic, government allowedthe country's two air service councils (one for domestic operations, the other forinternational ones) to lapse. This prevented those South African airlines that wereoperating from opening new routes, or increasing the number of services they couldoffer on their existing routes. Although new councils have now been appointed, they facemassive backlogs of applications to clear. Each application must be advertised in theGovernment Gazette, after which affected parties have 21 days to file objections, whichmeans that clearing the backlogs will take some time.Further, many State-owned national carriers scaled down their route networks,particularly cutting international (beyond Southern Africa) and intercontinental (beyondAfrica) flights. Currently, only four Southern African and Indian Ocean airlines flyintercontinental routes - Reunion-based Air Austral, Air Mauritius, Air Tanzania andTAAG Angolan Airlines. They operate these routes primarily to serve their home marketsand do so with small fleets. In no way are they competitors to the global 'megacarriers"What is of more value and importance for the region's carriers is the ability to pick upand provide onward feed traffic from and to the foreign intercontinental carriers thatserve the region," affirms Munetsi. "Over the past two years, we have seen a number ofcommercially cooperative agreements signed between some of the region's strongercarriers and their long-haul partners."Major BottlenecksGlobally, the sector's recovery is proving far from trouble-free. The loss of skilled staffafflicted the air traffic management, airport and ground handling sectors, as well as theairlines themselves. And, because of the perils of terrorism and organised crime, evenunskilled staff working at airports need to be subjected to security vetting and clearance.This has put a major bottleneck on ramping up international air travel in a.purober.ofcountries, even resulting in the cancellation of flights. With Southern Africa laggingbehind other regions, in terms of a full recovery in long-haul intercontinental flights, thismeans, Munetsi notes, that SADC countries have the opportunity to learn from theseexperiences and, by properly capacitating local police, security and intelligenceagencies, ensure that the requisite vetting and clearance of airport and associated staffis done timeously, so that the kind of bottlenecks now being observed overseas do nothappen here.Meanwhile, airline input costs have soared, particularly fuel prices, which are averaging$136.8/pbl for the year to date and which the International Air Transport Association(IATA) calculates will add $122 8-billion to the industry's total 2022 fuel bill, comparedwith last year. Rising inflation is an important issue. A major cause of thesedevelopments is the Russo-Ukrainian War, which is also driving international politicalshifts. Airlines are particularly vulnerable to major changes in international relations,although for Southern African carriers it is too early to tell if either inflation or the global REBECCA CAMPBELLTo all practical intents and purposes, the Covid-19 pandemic hit Southern Africa just overtwo years ago. The pandemic and the measures adopted by the region's governments to tryand counter it have had a severe impact on the Southern African airline industry (and indeedon all sectors associated with it, including airports and tourism). Although Covid-19 did not,on its own, drive any of the region's airlines out of business, it proved the last straw for anumber of carriers that were already in financial trouble before the disease struck.Since the end of 2019 (the last pre- pandemic year), two of the region's operators, AirNamibia and SA Express, have gone into liquidation. Four have undergone, or are stillundergoing, business rescue (the local counterpart to Chapter 11 bankruptcy protection inthe US): Air Mauritius, Comair, South African Airways (SAA) and Mango (the low-cost carriersubsidiary of SAA). Currently, State-owned Mango is not operating and the joint businessrescue practitioner at Comair (operator of British Airways in South Africa and Kulula brands)has given notice to affected persons indicating that they "no longer believe that there is areasonable prospect that the company can be rescued"."Financially, the pandemic-driven disruption to normal airline operations and business putcarriers under immense pressure," highlights Airlines Association of Southern Africa (AASA)CEO Aaron Munetsi. "All airlines, without exception, were adversely impacted by thepandemic. AASA, in conjunction with other airline representative associations, appealed tothe Southern African Development Community (SADC) governments to provide financialrelief to all airlines, regardless of ownership, by way of cash injection or through otherinstruments such as the waiver or reduction of statutory taxes, levies and charges. It isregrettable that most governments in the region have not seen their way to support anindustry that is intrinsic to the economic health and sustainability of every modern andaspiring country.""Ours is a business that is classified by high costs and slim margins, and when revenue isnot forthcoming, the costs associated with our asset base can be crippling," explainsFlySafair chief marketing officer Kirby Gordon. "Operating costs can also be massive."AftermathThe recovery of the regional airline sector has, however, begun, as more and morepeople get vaccinated against the pandemic. This recovery is being led by domestic andregional traffic, although an issue is that each country within the SADC has gone its ownway regarding Covid-19-related travel protocols, complicating matters for the airlines andtravellers. AASA has been lobbying SADC States to standardise regional travel

Tactics happen on a much smaller scale than strategy. An organization's or an individual's career…

According to the article “The regional airline sector is likely to emerge smaller but stronger,” opined Munetsi. “The next five years are critical for the SADC aviation sector in that policies have to be aligned with the reality of the airlines that serve the markets. Many studies have demonstrated the inarguable catalytic effect of aviation to the gross domestic product of any country. As the region’s economies strive to regain the momentum of the pre- pandemic era, the authorities must realise that the airlines are an integral part of the solution. Southern African airlines will find themselves at the forefront of ensuring the recovery of economies through their role of providing uplift for passengers and goods. This will enhance the intra-region and, by extension, continental trade which will result in the growth of economies.” As an operations analyst in the office of the CEO of Airlink, you have been tasked to undertake a comprehensive analysis of Airlink’s operations strategy. The primary objective of the analysis is to establish how well current operational capabilities match the post-COVID-19 requirements of customers. Secondly, the analysis is expected to address the need for improved understanding and practice of operations strategy in order to position Airlink as an airline that provides superior value to customers at an affordable price in a manner that responds to the needs of customers. Please note: Your discussion should emphasise the following: (1) a meaningful definition of, and elaboration on, the concepts of ‘operations strategy’ and ‘operations strategy analysis’ as well as, (2) a detailed step-by-step evaluation of operational capabilities. It is important that your discussion is made relevant to Airlink rather than a generic discussion that has no bearing on the Southern African airline industry.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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