Aviation Managment

• Normative Company Policy (Development of vision, mission statement, code of ethics)
• Strategy (Development of strategies, company, business segment, competition)
• Business Model (Development of value mechanism)
• Operative Planning (Development of budgets, processes and structures)

1. Full Service Network Carrier (All services included, Supplementary services)-->Quatar, Etihad, Singapur
2. Niche Carrier / Regional Carrier (Wet lease, Regional networks, ancillary services, supplementary services)
3. Point to Point (Unbundled products, no frills, ancillary services, Easy Jet, Ryanair (high innovation))-->LH, AirFrance

The industry competitiveness is very high:

• Many companies
• Little product differentiation
• Excess capacity
• High fixed/variable costs
• Cyclical fluctuations of demand

Pressure from every side.

• Niche market on SH flights
• Dense point to point network (serving primary and secondary airports)
• Focus on mass market (business and leisure pax)
• Positioning only on the price
• Dynamic prices (early booking=cheaper price)
• Less service
• Strong visible brand
• Direct sell of tickets
• Modern fleet with only two types of AC (Low maintenance costs) which operate at full capacity

• Extensive market coverage and growth due to network effects
• Alliances
• Ability to adopt homogeneous processes and quality

• Niche destinations
• Flexible cooperation in alliances
• Cost efficiency
• Dominance on regional markets

• Easy processes
• Cost efficiency
• High flow of traffic

• Relation to/integration in tour operators
• Cost efficiency
• Integrated management of capacity

The accessibility of the airport.

Der Non-Aviation Sektor an Landesflughäfen: Kostendeckungsgrad > 100% Dank der Querfinanzierung des Non-Aviation Sektors (166%).

• Strong level of competition and business models
• High efficiency
• Low subsidisation - high level of cost recovery
• Rather low share of external costs

• Energy consumption and climate change costs
• Vulnerability (Safety, Security, Noise)
• Some advantages in taxation

If the airline passes on the taxes to the pax, they will change means of transportation or change the airport.

If an airline does not pass on the taxes the economic balance might get worse.

Airport related activities:

Direct Impact on airport and Indirect Impact, Suppliers off-airport=Induced impact (Consumption, expenditures)

Improved accessibility: Leisure/Tourism und Business

Value added=Turnover minus intermediary inputs

• Broadly, ethics is the discipline that examines one’s moral standards or the moral standards of a society to evaluate their reasonableness and their implications for one’s life.
• Business ethics is a specialized study of moral right and wrong that concentrates on moral standards as they apply to business institutions, organizations, and behavior.

• Systemic: ethical questions about the social, political, legal, or economic systems within which companies operate.
• Corporate: ethical questions about a particular corporation and its policies, culture, climate, impact, or actions. I.e. corporate ethics of Swiss and Ryanair: Hire pilots from agencies like Ryanair.
• Individual: ethical questions about a particular individual's decisions, behaviour or character.

• Ethics applies to all human activities.
• Business cannot survive without ethics. Minimum standards are not always the best, it is better to give a little extra effort.
• Ethics is consistent with profit seeking. Ethics contribute to profits.
• Customer, employees and people in general care about ethics.

Ryanair creates a value for customers and for the society. But it creates some challenges within the company. If they are not ethical with healthy people it is ok but what happens with people in a wheelchair? Could be a huge hysteria in the media if one day a person in wheelchair is refused to bord a Ryanair AC.

Also what is going on with the crew is not good. The time on the ground is not enough to prepare the next flight. This is also a safety issue and could lead to a catastrophic situation (time bomb?).

Yes, I think it is sustainable. They will still exist in 20 years. But somehow it is a risky way to do business because it is just a matter of time until something bad happens like an accident or incident.

• Actions and policies should be evaluated on the basis of the benefits and costs they will impose on society.
• The only morally right action in any situation is that whose utility is greatest by comparison to the utility of all the other alternatives.

Utility=Benefits - costs (Explicit and implicit benefits, it depends on time if you take a direct or indirect flight)

• Can be violated even when "no one is hurt".
• Are correlated with duties others have toward the person with the right
• Provide individuals with autonomy and equality in the free pursuit ot their interests
• Provide a basis for justifying one's actions and for invoking the protection or aid of others
• Focus on securing the interests of the individual utilitarian standards.

Not the consequence, but the interior motivation counts

Problem: How can we objectively find out the real intention of a person's behavior?

For Kant, the basic right, the basic value is more important than the consequence.

• Captain was not honest on his job application--> if he was honest he would not have been hired or he would have received additional training.
• If the airline had more closely enforced training requirements and also paid a more reasonable salary-->the crew would have been technically better prepared as well as not sleep deprived.

• Humans are goal directed
• Human actions are judged to be morally right or wrong, good or bad, according to the consequences that those actions produce.

• Fundamental: Distributes benefits and burdens equally to equals and unequally to unequals.
• Egalitarian: Distributes equally to everyone
• Capitalist: Distributes according to contribution
• Socialist: Distributes according to need and ability
• Libertarian: Distributes by free choices
• Rawls: Distributes by equal liberty, equal opportunity, and needs of disadvantaged.

• Utility
• Rights
• Justice
• Caring

1. Does the action, as far as possible, maximize social benefits and minimize social injuries? (Utilitarian standards)
2. Is the action consistent with the moral rights of those whom it will affect? (Right treatment of individuals)
3. Will the action lead to a just distribution of benefits and burdens? (Standards of justice)
4. Does the action exhibit appropriate care for the well-being of those who are closely related to or dependent on oneself? (Standards of caring)

=Aviation Governance: "Leading a corporation". Holding the balance between economic and social goals as well as individual and communal goals.

It is also a set of relationships betweena company's management, its board, its shareholders, and other stakeholders. System by which companies are strategically directed, integratively managed, holistically controlled in an entrepreneurial and ethical way.

• In the sense of organisational control: Uppermost constitution of business management, i.e. appropriate specification of the tasks and functional structuring and formation of the topmost management bodies
• In the sense of organisational correlation: Relationship of the uppermost management bodies to the shareholders and to business relevant shareholder groups

1. Appropriate relationship between owners and management
2. Efficiency in management and control: Clear tasks, precise skills and responsibilities increase clarity of leadership.
3. Reduction of the leadership effort: Clear tasks and roles reduce tensions in the management.
4. Improvements of ratings for banks: New banking regulations require detailed audits of clients and transactions. Improvement of creditworthiness.
5. Reduction of insurance premiums: Company benefits from reduced insurance premiums.
6. Strengthening customer relationships: Stable relationships.
7. Improvement of supplier relations
8. Simplification of cooperation: Transparent and well documented organisations.
9. Liability prevention: "Business Judgement Rule" is applied in court.
10. Imrovement of ethic conduct: Corruption and bribes cannot be ruled out with clear guidelines, but at least be reduced.

1. Consequent risk management
2. Focus on compliance
3. Financial planning and controlling: Aviation enterprises require high financial resources.