Airline Industry As An Economic Booster

By Author: Anthony W Bills
Total Articles: 158
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Airline Industry as an Economic Booster
Executive summary
The airline industry is one of the most significant economic boosters among the nations in which its impact springs to all corners of the world. As it has been revealed by Coyle & Bardi (1998), the airline industry is one of the most complicated in the industrial sector, by having the widest range of interconnected links to the other sectors in the economy. Basically, the services offered in the airline industry ought not to be taken slightly; as they impact massively on the entire world economy. Precisely, the airline industry is both directly and indirectly related to the sectors like aircraft manufacturing industry, oil industry, tourism industry as well as to trade and international business activities.
However, the airline industry has been faced with a number of crises which have adversely affected its operations; particularly its profitability. Through its virtual relationship with other sectors in the economy like the crisis in the world’s oil and aircraft manufacturing industries, its decline in performance has been greatly attributed ...
... to these other related industries to a great extent. This has been contributed by various economic crises experienced in most parts of the world; reducing the efficiency and profitability accrued in the airline industry, as held by Glaskowsky et al. (1999). More so, the high rate of airline regulation in most parts of the world has adversely affected its performance to a great extent.
Generally, Handfield et al. (1998) reports that; the crisis facing the airline industry has been attributed by the failure of its interlinked sectors, which have severely been faced by inefficiency following the currently faced economic crisis. Basically, the drastic fall in the performance in the airline industry can be accrued to the inability of its complementary industries. In this regard, the airline industry should strive at reinstating its performance by pursuing ways and means of satisfying its customers. More specifically, there should be devised better customer oriented strategies aimed at making the airline industry more popular among the people across the globe.
Introduction
Following the current economic crisis across the world, the airline industry has not been spared, since it its performance has been adversely affected. As revealed by Coyle & Bardi (1998), there have been significant decline in the productivity in the airline industry as a result of low productivity in its complement industries; which have been facing serious crises. In this respect therefore, the activities carried out in the airline industry ought to be well managed through the application of various procurements in the aviation logistics.
Perhaps, the currently experienced soaring oil prices have badly affected the performance of the airline industry at a great deal. Coyle & Bardi (1998) reveals that, the high operational costs incurred in the airline industry has generally attributed to the decrease in the popularity of the airline industry, as air traveling rates have been increasing beyond the affordability of medium income earners. As a result, there have been declines in the number of clients who book into the airline industry, resulting into its low productivity. Certainly, the airline industry stakeholders ought to come up with strategies aimed at reinstating the productivity of the airline industry across the world.
In this regard therefore, Glaskowsky et al. (1999) suggests that; airline industry managers ought to be well equipped with information about aviation logistics as well as remaining interconnected to their suppliers and clients. Certainly logistics like supply chain, warehousing and packaging ought to be properly managed in aviation so as to ensure ultimately good performance of the airline industry across the world. Basically, modern procurement techniques in aviation ought to e devised in the airline industry with accordance to the experienced economic crisis in its related sectors. So as to reinstate the performance in the airline industry, air traveling rates should be lowered, there should be modern cargo picking machines, efficient and spacious warehouses among others. This would be facilitated by the involvement of both the governments private sectors in the airline industry among the nations; so as to ensure the crisis facing the industry is well coped with.
Further, there should be more modern carriers in the airline industry so as to ensure the satisfaction of their clients by offering more satisfying services. For example, the popularity of traditional carriers like BA and Lufthansa has not been as high as for the modern carriers like Ryanair and Early Jet among others. This is because, the modern carriers have been revealed to have more comfortable seats and clients feel better to use them in their air travels than using traditional ones. As suggested by Coyle & Bardi (1998), the modern carriers have also been revealed to be oil efficient, and therefore would be more economical; considering the experienced high costs of oil across the world.
In this regard therefore, the aviation industry should ensure the provision of the most current aircrafts which have been revealed to utilize fuels more economically than the old ones. By so doing, the aviation industry would be increasing its utility with regard to the increasing demand of its services. According to Glaskowsky et al. (1999), aviation logistics should be regularly updated so as to enhance the relevance and reliability among its clients, following the currently increasing demand of its services. This is necessitated by the currently increasing demand for aviation services as a result of globalization and international transactions. Precisely, the current interactions among nations in trade and cultural integration have led this increased demand for the aviation industry services.
Considering the current economic crises globally, supply chain in the airline industry should be strategically managed in order to ensure the reinstating of the performance in the airline industry. According to Handfield et al. (1998), this should be done through the process of monitoring, executing and controlling all supply chain activities with an aim of increasing their net value, enhancing competence and leraging various aviation logistic values. Basically, supply chain management aims at addressing various problems involved in distribution process of commodities and services in the airline industry which would enhance the configuration of distribution network among its clients.
Coyle & Bardi (1998) held that, the management of supply chain more effectively enhances proper allocation of supplies, distribution centers, production equipments and cross docks among others. By so doing, the supply chain management would thus be ensuring good coordination among its clients through enhancing the access of their services and commodities with ease. In this respect, utilities like time, form, place and value would be facilitated. Precisely, delivery schemes should be properly chosen with respect to the available supply points so as to enhance effectiveness and efficiency in the operations. Specifically, a well maintained supply chain would be facilitating the distribution of its services and commodities by creating a well linked network with its clients. In the aviation industry, distribution strategy would be addressed when more airports are constructed in various points with regard to the number clients available in such areas.
More so, according to Glaskowsky et al. (1999), logistical activities in the airline industry during the time of trade off would be better coordinated when a supply chain is well managed with respective modifications whenever necessary. Particularly, the achievement of low logistic costs would be enhanced by good management of the supply chain. The decisions made would be on the basis of the truckloads ordered by the customers and the conditions attached to each truckload. For instance, the rates involved in full truckloads are more economical than the rates involved in less than truck loads. In this regard, a supply chain ought to be economical in terms of the logistics involved in each transaction. Further, a well maintained supply chain should address the rate of cash streams in the aviation industry.
In order to increase efficiency in aviation logistics, Glaskowsky et al. (1999) suggests that; there should be appropriate carriers and warehouses; which ought to be adequately equipped in order to enhance the provision of services by the airline industry. As it has been revealed, the modern airline carriers have been observed to gain a lot of popularity in the airline industry than the modern ones. As it has been reported, the old airline carriers like the BA and Lufthansa have become less popular with the introduction of more efficient modern airline carriers Babybmi and Easy Jet which have been very competitive. Basically, such high fuel efficient airline industries have been found to be effective and more efficient despite the currently experienced world crisis in various aspects.
As it has been revealed by Coyle & Bardi (1998), many air travelers have found much more comfort in using the modern airline carriers than the traditional ones. In this respect therefore, it is of great importance for airline mangers to consider introducing the modern carriers in the industry so as to maintain high number of clients, as well as enhance efficiency in the industry. This would really be achieved through investing much capital in acquiring the modern airline carriers; which in the long-run would prove to be far much economical.
Meanwhile, spacious warehouses in airline industry would be appropriate to facilitate the storage of large bundles of commodities on transit as various transactions are being processed. In particular, warehouses in the aviation industries should be efficient enough to accommodate large volumes of cargo without interfering with their quality by being properly equipped. Specifically, there should be appropriate storage facilities in the warehouses to handle various types of commodities, as suggested by Glaskowsky et al. (1999). For instance, there should be refrigerating facilities for perishable commodities so as not to interfere with their quality and value. In this respect therefore, aviation warehousing facilities should be properly equipped in order not to interfere with their quality.
Further, aviation warehouses should be strategically located in order to ensure efficiency and easiness in the movement of cargo in or off transit. With reference to Coyle & Bardi (1998), the aviation warehouses should be near the on-loading and off-loading zone in order to reduce their movement costs from the warehouses to the on-loading point. On the other, the ware housing facilities in aviation industries should be near the offloading zone to reduce the cost of transporting the cargo from the point off-boarding to the warehouses. In this regard therefore, warehouses should be near the loading points so as to be economical in their operations in terms of cost and time.
Conclusion and Recommendations
As it has been revealed, the current economic crisis facing the various parts of the world has adversely affected the performance of the airline industry to a greater extent. Basically, the currently faced high oil prices and economic crisis facing many countries, the profitability of the airline industry has really been declining significantly. In this respect therefore, it is recommended that, the airline carriers be oil and space efficient as evidenced in the modern carriers like the Easy Jet among others. In addition, the airline industry should reduce the air ravel rates so as to ensure their affordability by moderate income earners. This would also enhance global businesses as business people would be in a position to move from one country to another in various business activities.

Reference list
Coyle, J. & Bardi, J. (1998). Airline Industry Logistics and Global Economic Crisis. New York:
South-Western Publishers.
Glaskowsky, N. et al. (1999). Business Logistics, 3rd Ed. Sydney: Wadsworth Publishers.
Handfield, W. et al. (1998). Introduction to Supply Chain Management. New York: Prentice Hall
Publishers.

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