Aviation Crisis Management Toolkit Research Paper

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Table of Contents

Global Crises
Useful Sources
Preliminary Literature Review
Reference List

Global Crises

Hall’s (2010) review of crises begins with the impact of the 2007 financial crisis. Following on from this Hall (ibid) goes on to recount a number of well-known global crises that have had lasting impacts on international passenger flows.

Concurrently, Aviation has evolved in terms of technologies, sectors and route networks, with once popular destinations now struggling to appeal to potential passengers and previously less visited destinations seeing an upturn in arrivals.

Organisations have arrived in the industry, and disappeared, as crises take their toll.

UNWTO (2019) estimates that worldwide international tourist arrivals increased 6% to 1.4 billion in 2018. In relative terms, the Middle East (+10%), Africa (+7%), Asia and the Pacific and Europe (both at +6%) led growth in 2018. Arrivals to the Americas were below the world average (+3%).

The current global pandemic has impacted on the Aviation industry more so than any crisis since WW2. However, alongside Covid-19, the Aviation industry is existing in a time where shocks, the result of a range of crises, are creating a turbulent and unstable business environment.

Crises have wide ranging ramifications for Aviation organisation. The impacts on these organisations vary considerably depending on the type of crisis, the severity of the crisis and the way in which the organisation has planned for, and responded to the crisis. The resilience of the Aviation industry is in question.

The questions that form this assessment toolkit are designed for you to critically examine a range of Crisis Management themes within the Aviation industry and within the context of a global turbulent environment.

Useful Sources

UNWTO library / IATA – Crisis Communication in the Digital Age / WTTC economic tools / Toolbox for Crisis Communications in Tourism / Skift / CAPA / World Economic Forum – Global Risk Report 2020.

Preliminary Literature Review

The word crisis comes from the Greek “krisis” meaning differentiation or decision (Glaesser, 2003). Crises can be identified as ‘wildcard (events)’ – high impact, low probability (Cooper, C & Hall M, 2019), therefore they are events that require important and immediate decisions to be made.

Triangulation is the use of more than one method of research to add depth to data and analysis, contributing to greater confidence in findings (Bryman, Bell, & Teevan, 2009).

Preliminary Literature Review

A crisis denotes a progressive process that leads to the disruption of various physical aspects of a given system while threatening its basic assumption and its overall existential core (Al-Dahash, Thayaparan, & Kulatunga, 2016). Over the years, the term crisis has been interchangeably used with the term ‘disaster.’ It implies that in the event of any crisis, there is often an associated disaster that affects the internal and external factors of a given system or organization (Mikusova & Horvathova, 2019). Therefore, a crisis is linked with business interruptions, emergencies, accidents, and catastrophes. The existence of these factors, in turn, leads to vulnerability results that are facilitated by various factors from economical factors to technological, financial, political, and social factors in addition to human error.

The Aviation industry recognizes that a variety of risks to stakeholders are prevalent globally and that safety issues exist anywhere people travel (IATA 2018). Hazards include, but are not limited to hurricanes, earthquakes, tsunamis, and floods; health risks such as SARS, pandemic flu and localized outbreaks; as well as actions such as technological / industrial failures, accidents, terrorism and political unrest.

	Crisis Impacts on Specific Aviation Organisation.
Organisation: Monarch Airlines Crisis: Economic (Financial) Crisis	Impacts of Crisis on Aviation Organisation: Monarch Airlines has received a lot of literal research over its financial crisis that led to the airline’s collapse. In 2015, the airline had already started experiencing financial issues leading to a need for investment to take it out of its financial turmoil (Casey, 2017). Due to this, an investment company known as Greybull Capital infused a total of £125 million into the company, making it a majority shareholder. Although the management team within Monarch Airline tried to turn around the company’s fortune, it still experienced an increased loss making it a loss-making company. Later in 2016, there was a further investment into the airline of £165 million (Casey, 2017). The investment helped the company renew its Air Travel Organizer’s Licencing scheme. Nevertheless, various external factors still depressed the airline leading to more losses. For instance, some of the leading factors that led to the increased losses in Monarch Airlines are the high competition in the airline industry and the terrorist attack at the airline’s most favored destination (Ash, 2019; Reuters, 2017; Finance Monthly, 2017; Routes Online). The airline’s chief executive, Andrew Swaffield, supported this by revealing that outside influences affected the company. The resultant effect led to the airline’s bankruptcy and later collapsed.
Organisation: Southwest Airlines Crisis: Technological Crisis	Impacts of Crisis on Aviation Organisation: Southwest Airlines is considered one of the best low-cost carriers airlines globally. However, recently, the airline faced a technological crisis or malfunction that led to the loss of one life. Fladung (2018) states that “On April 17, 2018, on Southwest Airlines Flight 1380 at 30,000 feet on the way from New York to Dallas, an engine ruptured. Shrapnel broke a window and passenger Jennifer Riordan was sucked headfirst into that opening. She would not survive” (para.4). The statement reveals that the flight experienced a technological malfunction when its engine ruptured, leading to a broken window that cost one passenger’s life. The resultant effect of this malfunction was an immediate public uproar. Before the plane got to the ground to provide the passenger with emergency services, the technological malfunction went public (McAndrews, 2019; Cameron, 2017; Diermeier & Heinze, 2017). Within the plane, the passengers were all attempting to put on their oxygen masks while others focused on sending last messages to their loved ones. The event led to a lot of criticism of the airline. The public highly criticized the airline’s inability to guarantee safe flights and its inability to prevent technological malfunctions. The story went viral, necessitating Southwest Airlines to have immediate crisis management to prevent further effects on the company’s image and reputation. Besides that, the reports on the crisis cost the airline $100 million of its total revenue.

How a stakeholder responds to a crisis often affects the public’s perception of the stakeholder, Chang et al (2018). Thus, how to effectively deal with complicated crisis situations is of the utmost importance in order to restore image and reputation after the crisis. Effective crisis management during a crisis has a positive effect on a stakeholder reputation and brand equity, and will facilitate the recovery after the crisis (Grundy and Moxon, 2013; Hansson and Vikström, 2010).

Evaluation of the response strategy utilised by an organisation of your sub-sector.

One of the main response strategies utilized by Southwest Airlines is the social media strategy. Over the years, social media has become one of the most important platforms used by millions worldwide. Due to the extent of social media, organizations have employed it as a mechanism for crisis communication and response strategy. It has supported this by facilitating communications within organizations and organizations to its external stakeholders and the public (‘Crisis Management Plan’, n. d). The tools employed by social media include various technological applications such as Instagram, Youtube, Facebook, and Twitter. Besides that, other tools include telecommunications and its capability for social interactions. Since social media also has various formats from pictures to video, audio, and texts, organizations can effectively carry out their response strategies. Scholars reveal that communication plans such as those within response strategies and crisis management have been made easier through social media (Cheng, 2018; Reuter & Hughes, 2018; Luna & Pennock, 2018). Although these approaches have limitations, organizations have proved to social media as their main mode of the response strategy.
Immediately after the Southwest Airlines technological crisis that cost the life of one passenger, the company took immediate action by releasing a message through social media platforms, particularly Youtube and Twitter. According to McAndrews (2019), “A message from Gary Kelly, Southwest Chairman & Chief Executive Officer, was released to Youtube. The airlines’ website banner and Twitter profile image also changed from their red, yellow, and blue heart logo to a gray, broken heart in the wake of the tragedy. The airline also halted their normal marketing of deals and promotional messages via Twitter, emails, and commercials to release sensitive flight information” (para.2). The statement reveals that immediately after the crisis, the Chairman and Chief Executive Officer of Southwest Airlines Garry Kelly released a statement on Youtube to manage the crisis. Southwest airlines, through its Twitter account, also gave its comments.
Notably, Southwest Airlines effectively used social media as its response strategy. It employed crisis communication as the main response approach proving its efficacy (Anthonissen, 2008; Coombs, 2015; Crisis Communication Guidelines). The company, through its management, issued reports immediately after the event happened, noting their quick response. After the airline took an emergency landing to cater for the affected passenger, the airline issued another report stating the emergency landing. The announced death of the passenger also led to an immediate social media announcement from the management and later from the airline’s captain and first officer.

In early 2019, Lonely Planet named Sri Lanka as its #1 Destination for 2019, a potential boost for passenger flows into the country. On April 21^st 2019, seven suicide bombers struck a number of churches and three luxury hotels within the country.

In April 2018, 29 airlines were serving Sri Lanka offering 300 flights a week. However, following the Easter attacks, the connectivity was reduced to 239 flights a week, which amounts to a loss of … 8,000 [seats] per week,” Jayaratne, J (2019). As an attempted recovery strategy, the Sri Lankan Government has announced that it will reduce the price of aviation fuel, ground handling and embarkation fees for six months at Colombo airport, to encourage airlines to reinstate schedules, increase the number of flights and lower ticket prices.

Many experts and academics see the “recovery” stage as the final part of the crisis process for stakeholders. It is at this point that stakeholders adopt policies to normalise operations in the hope to moving forward from the crisis.

Analyse a recovery strategy carried out by an organisation from your sector. (500 words)

Crisis recovery denotes long-term crisis actions that organizations take after a crisis to help them return to their normal operational level while mitigating any potential impact for future crises. In retrospect, organizations employ a crisis recovery strategy as a strategic approach to help them overcome the crisis. Besides that, the recovery strategy also helps the company regain the confidence of its internal and external stakeholders. Scholars such as He and Rui (2017, p.370) reveal that the recovery strategy is often measured through the organizational processes. Communication also plays a crucial part during the implementation of the recovery strategy—both the internal and external need to gain their confidence in the airline. According to Danik and Hryschuk (2018), in this instance, the company must also effectively address its failures using honesty and transparency. The crisis recovery strategy of American Airlines after the American Airlines Flight 191 crisis exhibits these facets.
American Airlines Flight 191 technological crisis denotes the 1979 accident where the flight crashed, causing 273 fatalities. The flight had a regular schedule operating from the O’Hare International Airport to the Los Angeles International Airport. However, in early 1979, the flight took off from the runway as usual but crashed. The main cause of the crash was the detachment of the left engine (Zumbach, 2019; Rumore & Berlin, 2020). The resultant effect was the death of a total of 13 crew members and 258 passengers. Besides that, two people were killed on the ground, making a total of 273 fatalities. According to the National Transportation Safety Board, the aircraft’s left engine separated from its left-wing, severing the hydraulic fluid lines leading to the accident.
The American Airlines’ recovery strategy proved instrumental to the company. The accident acted as a representation of an effective recovery strategy and how airlines should learn from their experiences. After the incident, the National Transportation Safety Board makes a point of extensively investigating every aircraft in case of any incident, no matter how minimal. To date, the board still uses this approach in every investigation before providing the final findings of any incident. Besides this, American Airlines has also introduced stringent strategies to avoid future accidents. One notable approach that the company has incorporated is stronger maintenance standards (Danik & Hryschuk, 2016). The American Airlines Flight 191 technological crisis identified one of the leading factors that facilitated the accident was maintenance. The airline found that maintenance is crucial within the airline industry. It also assessed that cutting corners, particularly in maintenance processes, could lead to catastrophic events.
Therefore, the American Airlines Flight 191 crisis emphasizes the need for a crisis response strategy in such catastrophic accidents. It reveals that companies such as American Airlines should always attempt to learn from their crisis to prevent future accidents and restore the public’s confidence in the company. According to Beirman (2018, p.290), the portrayal of legitimacy and restoring the public’s confidence in the company is crucial after a catastrophic crisis. Notably, all players involved in the American Airlines Flight 191 crisis, including the American Airlines, the National Transportation Safety Board, and McDonnell Douglas, among others, could have employed a better crisis management strategy. It shows that the crisis response should also aim at streamlining the company’s crisis management and communication. Today, American Airlines has a crisis communication strategy that is vital in any unavoidable future crisis.

The International Civil Aviation Organisation (2018) state that in order to be resilient, industries need to move from managing a disaster, to managing risks and building resilient infrastructures that are sustainable.

The resilience of the Aviation industry in relation to crises.

The resilience of the Aviation industry can be portrayed through the crisis management approaches employed by various airlines. For instance, one of the factors that show that the aviation industry had increased resilience in relation to crises is its ability for crisis communication and management. Notably, crisis communication and management are crucial factors that determine the resilience of any industry or company (‘Analysis of Airport Stakeholders’, n. d). Although the aviation industry has not been devoid of various forms of crises from political to technological, economic, and social crises, they have proved to have effective crisis communication and management. For instance, in 2017, Emirates Airline, a premium airline, experienced a crisis linked with a fatal airline accident. The incident gained a lot of negative press, making Emirates Airline a source of criticism. However, the crisis helped the company to develop effective crisis management strategies. Over the years, Emirates Airlines Company has proved successful in alleviating various crises by ensuring that it improves passenger satisfaction while minimizing any negative emotion or perception aimed towards the company (UNWTO, 2018). Emirates Airlines has achieved this through the development of strategic approaches and an effective crisis management strategy.
Companies within the aviation industry have today developed a step-by-step crisis management process if they experience any form of crisis. Companies such as the American Airlines since the Flight 191 crisis, Southwest Airlines, and Emirates Airlines are examples of organizations within the aviation industry that have proved resilience by developing a step-by-step crisis management strategy they use in the event of any crisis (Crandall, 2014). For instance, the Emirates Airline Company has a crisis management tactic that includes a response approach immediately a crisis has occurred. The company begins by giving a press conference immediately after a crisis has occurred to assure its customers and stakeholders that the top management effectively manages the crisis. The company employs a situational crisis communication approach to take responsibility for the crisis and reveal the coping mechanism the company bids to adopt to mitigate the strategy. According to Dehbi (2018), airlines such as Qatar Airways also use the situational crisis communication approach. However, the study also adds companies within the aviation industry also stem their crisis management strategies from past global crises to evaluate the relationship between the crisis and the resultant response. The study found that a crisis response strategy based on the acceptance of responsibility positively influences regaining the public’s trust and stakeholders’ confidence.
Consequently, the resilience of the aviation industry is also reflected in their use of contemporary crisis communication and management approaches aimed at retaining the public’s confidence in a given company after a crisis. One of the most common strategies employed is the use of social media. According to Cohn (2014), social media has played a crucial role in the aviation industry over the past decade, particularly in facilitating crisis management and communication. Social media has offered companies within the aviation industry the benefit of quickly responding to crises that have occurred minutes or, in some cases, seconds after it has just occurred. It is difficult for companies to send out representatives to an accident site immediately after the accident has occurred in most cases. Therefore, when companies within the aviation industry have experienced a crisis such as accidents due to technological difficulties, they can easily use social media as an effective tool to mobilize volunteers in the site to assist in any way possible. Therefore, social media offers the aviation industry benefits such as accuracy, reliability, and the delivery of timely information. An example of a company within the aviation industry that has effectively used social media is Southwest Airlines. After the 2017 accident, the airline issued a report via Twitter while calling for a press conference as a crisis management and communication strategy (McAndrews, 2019, para.3). The use of social media proved effective since the public had impromptu information, thereby avoiding further rumors.

The WEF (2020) writes “today’s risk landscape is shaped by an unsettled geopolitical environment in which new centres of power are forming—as old alliances and global institutions are being tested”. For the economy, “ammunition to fight a potential recession is lacking, and there is a possibility of an extended low-growth period. Climate change and related environmental issues are ranked highest in terms of likelihood.

	Identification and Analysis of Potential Crises.
Organisation: American Airlines	CHINESE AIRLINES-POLITICAL One of the potential crises that may affect airlines today is the financial crisis. After the beginning of the COVID-19 pandemic, countries globally, including the United States, issued regulations and restrictions regarding air travel. When the pandemic started, a few cases were causing no cause of panic. However, when COVID-19 started to spread and its mechanism identified, there was a worldwide panic. Although all industries were affected, the aviation industry was severely affected. In the initial phases, the country with the most COVID-19 cases was China. Therefore, companies that operated to and from China were adversely affected. For instance, American Airlines, one of the largest low-cost carriers in the United States, was adversely affected. Although the aviation industry is one of the most lucrative industries globally, low-cost carriers are often not that profitable. They are reliant on airfare and other facets to produce benefits in the industry. However, when the flight is not allowed to travel to one of its primary destinations, it incurs losses. Notably, American Airlines is one of the most lucrative low-cost carriers that travel to China. However, since the flight and travel restrictions, the company has experienced a lot of losses. These factors, coupled with trade restrictions in other countries, have led to the airline experiencing an all-round loss. Customer perception has also changed, making most travelers afraid to travel to China. The perception and preferences of customers are significant in determining the profitability or lack thereof in a given company. Therefore, a continued loss and negative customer perception would lead to the company having a financial crisis. Since the aviation industry is highly competitive, a financial crisis would decrease American Airline’s competitive advantage and market share that may, in the long run, render the company bankrupt.
Organisation: Air China	Since the onset of the COVID-19 pandemic, there has been an increasingly negative perception of China. The pandemic began in China, where it spread to the rest of the world. Since the origin of the pandemic that has led to hundreds of thousands of fatalities and millions of people having health issues linked to the Coronavirus, most people have developed negative attitudes and perception towards China (Alshahrani, 2021). In turn, this has led to a resultant negative attitude towards Chinese companies. Low-cost carriers such as Air China have, over the years, been the backbone of the Chinese aviation industry. However, the current political crisis and effects can negatively affect Air China and its operations in other countries. Therefore, Air China could undergo a political crisis that would damage its image, thus affecting its normal operation and, by extension, its profitability.

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