This report discusses the challenges and opportunities in aviation in the global context, including airport strategies for gaining competitive advantages. It also explores the implementation of biometrics, blockchain, artificial intelligence, and robotics in airports.
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1 AVIATION IN THE GLOBAL CONTEXT Table of Contents Introduction....................................................................................................................2 Discussion......................................................................................................................2 Challenges and opportunities.....................................................................................2 Airport strategies for gaining competitive advantages...............................................7 Conclusion....................................................................................................................10 References....................................................................................................................12
2 AVIATION IN THE GLOBAL CONTEXT Introduction This report aims to discuss the topic of aviation in the global context. A critical evaluation of the opportunities and the challenges by the airport planners in the present time with the comparison and the contrasting of the differences in the non-liberalised environment is executed briefly in this report. The assessment of the response of the airport operator for meeting the requirements of the dynamic market and the customers is briefly discussed in this report. lastly, this report concludes with an appropriate conclusion for this report. For predicting the direction of the international air transportation and it is important for the airport planners to analyse the present conditions and plan accordingly. There has been significant changes in the sectors of the transport in several countries and it imposes immense changes in the methods of transportation that is favoured by the passengers (Graham 2013). Any airport consists of the huge variety of the major facilities, users, systems, rules, regulations and workers. Just as the cities flourish on the commerce and trade with any other city, the airports become successful by fulfilling their part with the ability of being lucrative to the location where any passenger or cargo travels. Discussion Challenges and opportunities The airport planners face several challenges and there are various opportunities in the airport management. The simulation of the flow of passengers in any airport terminal is a major issue in any airport and the airport planners face this issue and discover the solution for this problem. Some of the common issues faced by the airport planners in the recent time are:
3 AVIATION IN THE GLOBAL CONTEXT Airport management and marketing It has been considered by the airport planners that the trends that are established would grow towards the liberalisation and the deregulation and almost towards the end of the time-scale of ten years, it might encompass the changes that are overdue in the control rules and the ownership that would allow the aviation in ultimately take the appropriate place among the global industries (Schlenker and Walker 2015). It has been predicted by the airport planners that the technology would affect the airlines significantly. This industry of aviation has faced significant challenges in the past and but at the reduced scale in comparison with the present times. The major problems for the conventional airlines would be that majority of the traffic would be carried by small number of the giant global integrators instead by them. When the aspect of the property management is considered, the demands of the shareholders of the airport and the owners is growing at the significant rate, this leads to the increase in the importance of the non-aeronautical associated income in the airports. The environment of marketing of the industry of airline would most certainly prevail difficult and volatile. In future, it has been considered that the ability of building and maintaining the strong brands would be an essential requirement for the success of the airline industry (Adler, Liebert and Yazhemsky 2013). For achieving the effective success of the industry it would require the spending of the communication among the airport planners that is substantial, well planned and viewed in the strategic, long term method instead the tactical exercise that could be reduced or might be ditched quickly before it becomes difficult. This method helps the airport planners in managing the license, rental, concession and the lease associated interests. This offers the required information for undertaking the essential business decisions associated to the property. Airport privatisation
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5 AVIATION IN THE GLOBAL CONTEXT airlines do not own the airports. This provides the advantage of holding the investment of capital that is required for the operation, but is has a significant disadvantage which emerges due to the coping of the practises, regulations and the policies of every airport. The airlines that are mostly the tenants at airports therefore becomes the enmeshed in financial problems of that airport. The deregulations has stimulated the trend towards the small aircraft that increases the flight numbers required for serving the provided number of the passengers (Molotch 2014). The deregulations has tended in encouraging the operations of hub-and- spoke where any carrier chooses any airport as any hub and then it attempts numerous of inbound flights in feeding the traffic for any outbound flight. The airport planners face the issue of the growth of the traffic in the airports and it leads to the increase in the demand of effective management of the airports. Due to the fact that the factors would be observed from foregoing, the airline economics and the airport economics are closely related. Automation Another issue that is faced by the airport planners in the recent times is the addition of the automation in the airports. The advancement of the ICT has provides simplification from the operations of the airport. Due to the advancement in the ICT, it results in the demand of addition of the applications of ICT to the airport operations for improving the crucial functional personnel and departments in any airport for accessing the critical information of the airport for supporting the resource management, maintenance and engineering, operations and financial management and any other activities of decision support (Sheard 2014). The management of any revenue stream of the airports could be increasingly complex and challenging task. The designing of the billing module of the airport is done for widely simplifying the billing and collation of all the non-flight and flight associated revenue. The airport planners face the issue of the automation as these incidents are common due to the increasing occurrence frequency. The errors of data-entry, the failures of monitoring, the
6 AVIATION IN THE GLOBAL CONTEXT workarounds of the systems and misapplication of the mode that faults commonly occurs in the isolation or deprived of the contributing factors (Appold and Kasarda 2013). The planners came to a conclusion that the solution for the automation issues are the training, awareness, by the application of the standard procedure of operation and the coordination among the crew. Cargo issues Some of the issues in the field of air cargo deserves the special notice like the inflation, multilateral agreements of the cargo and impact of the trade agreements, policy of the fuels, hazardous cargo and the cargo alliances. The airport planners claims that this issue is inherent in the business of air cargo (Daugman 2015). Among the business of the air cargo, the imbalance of direction, absence of the innovative dedicated aircraft of the freight, noise regulations at the airport and dependence in several domestic markets on the belly cargo and therefore on the schedules tailored for pleasing the passengers. Capacity constraints The capacity constraints includes not solely the restricted physical infrastructure like the runways and terminals but it also contains the administrative restriction such as the curfews at night, emission and noise budgets or the release and noise restrictions that limits the complete level of the demand of air travel that any airport is potentially capable of serving (Lin and Chen 2013). Furthermore, the choices of the airport differs significantly when any travellers faces the restriction of the capacity and therefore it relies on gap among the potential of any demand of any airport and the demand at the level of capacity. The opportunities that are obtained by the airport planners is due to the growth of the popularity of the method of air travel, the number of customers are increasing exponentially
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7 AVIATION IN THE GLOBAL CONTEXT with time. This would help the airport planners to predict the correct stage of the airports in the near future. Airport strategies for gaining competitive advantages The airports implemented several technologies for meeting the customer expectations andthecopewiththedevelopmentofnewtechnologies.Theairportsarepresently implementing the advancements in the technology for gaining significant advantages in the competitive market. Some of the responses provided by the airport operators for fulfilling the demands of the customers are: Implementation of the biometrics in airports: the potential of the biometrics in the sector of air transport is significant in recent times. It has gained immense popularity from several sectors. The development towards to the biometric enabled processing could be viewed around the world (Chang, Yu, and Chen 2013). The airport Heathrow installed over 36 biometric-enabled boarding gates that are self-service in several terminals. In several airports, the biometric technology has been installed at all the crucial passenger touch-points and the Sydney Airport mutually shared with the FTE for trial in the end-to-end biometric enabled processing of the passengers from last year (Triebel et al. 2016). In some places, the implementation of the biometric-based recognition has been done at entrance of the airline lounges and the integration of this technology has been done into signage and the FIDS for providing the customers with the personalised information and any other offers. The airports from all around the world have implemented the technology of biometrics for providing the ease of information to the customers. Implementation of the blockchain in airports: Blockchain is the fastest growing technology in the recent times. It has been used significantly in the air transport sector for providing the customers with the personalised information and provide efficient services. The
8 AVIATION IN THE GLOBAL CONTEXT technology is closely related with the cryptocurrency but still the aspect of the blockchain is greater than the bitcoin (Redondi, Malighetti and Paleari 2013). As the technology of blockchain principally provides the digital ledger that is secured about the agreements and the transactions, this holds the potential in the project that includes the data sharing. The Heathrow airport, Miami International Airport and the Geneva airport implemented the blockchain technology for providing the customers with the advanced measures and facilities. Artificial intelligence: 2017 was the year when the technology of artificial intelligence was implemented and used in the air transport sector (Samà , D’Ariano, and Pacciarelli 2013). The airports and the airlines became to use this technology extensively for providing the customers with enhanced security and enhance the journey of customers. The chatbots were implemented in the airports for allowing swift conversation among the customers and the airport staff. The AI technology is used for complementing the efforts of the social media service agents. The automated answers for the straightforward questions could be provided by the AI that provides the easy answers for all the queries of the customers at airports. This also helps in freeing of the human agents for dealing with the increased complicated enquiries (Allroggen and Malina 2014). The technology of artificial intelligence consists of significant potential in several aspects of the airports like the updated pricing using predictive methods, the predictive aircraft maintenance and the efficiency in the operation on airports. The airports also benefit from the advancements of the AI, which is proved by the Beijing Capital International Airport, where the technology of artificial intelligence is used for solving the issues related to congestion. Robotics: The use of robotics in the airports are increasingly becoming important as this technology provides the ease of providing services to the customers (Gil et al. 2014). The robots provides the on-the-spot assistance to the passengers but still it perhaps in the roles of operation that would be most impacted by the robotics. The robotics are most extensively
9 AVIATION IN THE GLOBAL CONTEXT used in the airports of the country Japan where it is used for providing the real time assistance to the customers and the passengers. These robots could perform various tasks that ranges from the transportation of the luggage to the proactively identification of the potential risks in the security of airport (Stewart and Mueller 2014). The final goal is the deployment of the fleets of the robots in the terminal for gaining competitive advantage in the air transport sector. It is commonly perceived by several researchers and airport authorities that the use of the robotics in the effective handling of the baggage could be done more easily with robotics and it could be transformed by the replacement of the centralised conveyor and then track and tray the systems with the system built around the transportation robots of individual baggage (Bilotkach 2015). Baggage:Thetechnologicaladvancementsarehelpingsignificantlyinthe development of the enhanced baggage space. The bag drop using the self-service is presently vastly used in the airports all around the world. The implementation of the electronic bag-tag is widely done for processing the baggage claims at the airport. Augmented reality: the use of AR, VR and the MR is widely done in the airports all over the world as it provides the passengers with the ability of airport wayfinding and the remote control centres in the airports. The Gatwick Airport unveiled the navigation using the blue dot and the wayfinding using augmented reality that provides the passengers with the ability of using the function of camera on their personal devices for viewing the augmented reality directions for gaining an understanding of where they need to go (Merkert and Assaf 2015). Several other airports have implemented the technology of augmented reality for enhancing the experience of the passengers and provide them with the ease of navigation to the customers.
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10 AVIATION IN THE GLOBAL CONTEXT Some other strategies that are implemented by the airports for staying ahead in the competitive environment are: Cost leadership: This strategy intends to implement the organisation among the producers of lowest cost. This aspect is realised by the reduction of the costs, like the reduced cost inputs, reduced distribution and the costs of the location by the offering of the standardised product and then by the achieving the increased volumes of sales and the scales of the economies (Lai et al. 2015). This strategy would provide the company to provide the reduced costs to the customers than the competitive organisations. Differentiation:Thegenericstrategicoptionisthedifferentiationwhenany organisation would create any product or products that are understood as being unique or different from the competitors (Wanke, Barros, and Nwaogbe 2016). This is increasingly suitable for the increasingly price insensitive market. It might be achieved using the enhanced features of the service, image of the brand, technology, distribution and the promotion. In the industry of the airport, it appears to be significant scope in pursuing the strategies of differentiation. For instance, the development of any new airport might be done in any centre position of any city with the uniqueness that is in the proximity to urban population. Focus or niche: The third strategy that is majorly used in several airports additionally with the differentiation and the cost leadership is focus or the niche strategy that is built around the satisfying of any specific small target market (Tsui et al. 2014). Conclusion Therefore, it can be concluded that the airports are increasingly using the technology for enhancing the experience of the customers and provide enhanced services. There are several challenges that are faced by the airport planners in the recent times. This industry of aviation has faced significant challenges in the past and but at the reduced scale in
11 AVIATION IN THE GLOBAL CONTEXT comparison with the present times. The major problems for the conventional airlines would be that majority of the traffic would be carried by small number of the giant global integrators instead of by them.It has been discovered by the airport planners that the airports are increasingly relied on private sector for providing the services as the method of reducing the costs and then improving the range and quality of the services that are provided. The aspect of the privatisation refers to the altering responsibilities and functions of the government that might be completely or partly for private sector. Almost all the airports and airlines are operated and owned by subdivisions of the state government or the state governments like the cities, countries or the airport authorities. Unlike the railroads, bus lines and the freight carriers that should own their terminals, the airlines do not own the airports. Another issue that is faced by the airport planners in the recent times is the addition of the automation in the airports. The advancement of the ICT has provides simplification from the operations of the airport. Some of the issues in the field of air cargo deserves the special notice like the inflation, multilateral agreements of the cargo and impact of the trade agreements, policy of the fuels, hazardous cargo and the cargo alliances. The capacity constraints includes not solely the restricted physical infrastructure like the runways and terminals but it also contains the administrative restriction such as the curfews at night, emission and noise budgets or the release and noise restrictions that limits the complete level of the demand of air travel that any airport is potentially capable of serving.
14 AVIATION IN THE GLOBAL CONTEXT Triebel, R., Arras, K., Alami, R., Beyer, L., Breuers, S., Chatila, R., Chetouani, M., Cremers, D., Evers, V., Fiore, M. and Hung, H., 2016. Spencer: A socially aware service robot for passenger guidance and help in busy airports. InField and service robotics(pp. 607-622). Springer, Cham. Tsui, W.H.K., Balli, H.O., Gilbey, A. and Gow, H., 2014. Operational efficiency of Asia– Pacific airports.Journal of Air Transport Management,40, pp.16-24. Wanke, P., Barros, C.P. and Nwaogbe, O.R., 2016. Assessing productive efficiency in Nigerian airports using Fuzzy-DEA.Transport Policy,49, pp.9-19. Yim, S.H., Stettler, M.E. and Barrett, S.R., 2013. Air quality and public health impacts of UK airports. Part II: Impacts and policy assessment.Atmospheric Environment,67, pp.184-192. Yu, M.M., Chern, C.C. and Hsiao, B., 2013. Human resource rightsizing using centralized data envelopment analysis: Evidence from Taiwan's Airports.Omega,41(1), pp.119-130. Zhang, A., Hanaoka, S., Inamura, H. and Ishikura, T., 2017. Low-cost carriers in Asia: Deregulation, regional liberalization and secondary airports. InLow Cost Carriers(pp. 55- 69). Routledge.
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