Managing Innovation in the Airline Industry

This report examines future developments in the airline industry till 2020 and beyond, along with the capabilities of organizations to innovate and sustain in the market. It discusses the future of the airline industry, organizational innovation, and innovation capabilities.

MANAGING
INNOVATION

EXECUTIVE SUMMARY
This report will examine future developments in airline industry till 2020 and after that along
with capabilities of organisation to innovative and sustain in market.

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Future of the Airline Industry.................................................................................................1
Organisation Innovation.........................................................................................................3
Innovation capabilities............................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Innovation management is process by which organisation manage its innovation
procedures from starting stage of planning till the last phase of implementing. It includes
decisions, practices and activities so that implementation of innovative strategies is effective.
Ryanair is Irish based airline company situated in Ireland which is owned and managed by
Ryanair holdings. It is largest European airline with more than 24,000 flight in a day which
enable it to have lower fares with safety record of 34 years (Tidd and Bessant, 2018). In this
report airline industry which provides services like carrying passengers and freight from the
route of air and with air-planes and helicopters. Thus report will discuss future of airline industry
till 2020 and even after that which will examine future developments. Thus it also explore
innovations that organisation required to have competitive advantage and sustainability till 2020
and after that also. To come up with innovation business needs to develop strategies that will
help Ryanair to have capabilities for innovations. The main purpose of this report is to find out
developments that airline industry will undergo till 2020 and beyond so that Ryanair can plan
strategies and develop capabilities to have sustainable and competitive advantage in industry.
MAIN BODY
Future of the Airline Industry
Globally Industry: The demand for services provided by airline industry is expected to
increase by 4.3% per year which will create growth for companies and economic development of
society. It is estimated that industry will generate 15.5 million jobs which lead to increase in
GDP of the country. There will be different factors that will impact future of airline industry like
data, security, environment, values, technology, business model, etc (Biemans, 2018).
UK airline industry: UK has one of the largest aviation network in the world which contribute
most to its economy and supports in generating employment. Thus government helps in growth
and development of this industry so that it provides better benefit to the society. Demand for the
aviation services are growing on a very high rate thus it can be seen that growth is sustainable. In
UK it is important that government, industry and other third parties have to work together so that
comprehensive strategies are framed to manage the sector. The government of UK wants airports
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to have local economies and global connectivity so that benefits can be maximise for local
communities and consumers.
Factors affecting industry: there are many elements that have positive and negative impact on the
development of aviation industry. Increase in demand of services is positive factor which will
help industry in future to grow sustainably. Financial risk is a negative factor which causes
problems related to funds such as interest – rate, currency – rate and fuel prices. Changing in
customer expectations, there is a need that like any other industry, airlines sector also analyses
and understand what customer wants and provides services according to that. It will have
positive effects as if companies able to analyse the expectations and meet effectively then it will
bring success for the organisation (Mendi and Costamagna, 2017). On the other hand if company
fails in meeting the expectations and it will have poor brand image and decrease in sales
revenue.
Drivers to Change: these are those forces which help changes to get implement effectively.
Growth and development of aviation in future are also dries by these factors. Latest technology
cool development like artificial intelligence, machine learning, voice to lose are Creating more
opportunities in the aviation industry and assist in future development also.
Main competition: this aspect will find out that what factor will dominate the development in
future for aviation industry. The main factor that will dominate industry is the new entrants that
will cause issues for many established companies changes in business model are also going to
prove this challenge due to which industrial face problems in future as well. Rising in fuel prices
due to environmental factors will also create obstacles and part of future growth and
development for the airline industry (Aalbers and Dolfsma, 2015).
Capabilities and characteristics: In future the most important factor that will impact airline
industry is to support regional growth and connectivity. Thus there is a need that airport connect
lesion, provide employment opportunities to local communities and enhance sector by providing
qualitative training to the employees.
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Organisation Innovation
Future plan: the dinner airline will make sure that it will gain the position of low fare airline in
the industry so that it can have competitive advantage. This will also help company in future
innovation and development.
Many challenges: due to rise in price of fuel, company struggling with keeping its fair as low as
possible. Thus this is one of the major challenges that company is struggling to overcome. The
main cause of this challenge is environmental factors due to which natural resources are
becoming scarce (Mousavi, Bossink and van Vliet, 2018).
Main opportunity and threat: runner airline will face uncertainties in the future while innovating
services. Opportunities like artificial intelligence to operate services and machine learning
so that operations can be automated. This will help Company to have competitive advantage
and gain its position as low fare airline in the industry. Threat is from new entrants and that
can employ updated technology and provide services in lower prices and attractive packages
to capture market share of Ryanair airline.
Product: due to technology kill advancement and innovation in the new near future in airline
industry new and creative products will be introduced. To beat competition and have
sustainable functions Rainer airline need to be creative as well for this the runner app is
introduced. This will help customer to easily access many of the services of airline without
any human interaction. This will help company to increase customer satisfaction and
innovate so that it can grow and develop its market share.
Target: the main and foremost target of regional airline is to maintain low fare airline image.
This will help company to build customer loyalty and have sustainable growth and
development in future (Epstein, Buhovac and Yuthas, 2015).
Capabilities required: there are number of abilities that are pre-requisite So that innovation can
be introduced. For Rainer airline it is the app by which customer satisfaction level will
enhance and for this it is required that company is technological Advance. From the above
strategy of becoming low fare airline and achieving it with the technology of flights and
cost-effective methods it can be clearly understood that it is one of the strength of company.
Thus in future to innovate and have growth and development in industry company is capable
enough to make strategies and achieve organisational objectives. There is need that
entrepreneurial capabilities are also developed so that is taking ability is high and solutions
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are more creative and innovative then traditional ideas. Experimentation leads to
implementing such solutions that are based on research activities of the organisation. One of
the basic capabilities that is required for future is learning from past experiences and failures
that company has faced (Lin, 2015).
Innovation requirement: in order to have sustainable and competitive advantage in the industry,
any company needs to innovate. In case of Ryanair airline where competition is high and
threat from new entrants is increasing makes innovation essential for survival. In industry
where there are many companies trying to attract customers with new and attractive services
without innovation a business model cannot survive (Dodgson, 2018). There are many
challenges also which leads to higher prices and boo quality of services that need to be
overcome with innovative solutions. In case of rain and airline increasing fuel prices is one
of the concerns of the management so to survive and gain its position of flu fare airline it
should come up with innovation. From the above discussion it is clear that innovation is
required by the company.
Future: due to rapid growth of aviation industry worldwide and in UK market it can be seen that
there are many opportunities that will be coming in business environment. Due to increase in
demand of aviation related services and luxury lifestyle of individual industry tends to grow.
Innovation capabilities
Capabilities: There are number of ways by which company can build its capability for future
development. Just in case of Ryan air in line there are number of factors which can be developed,
some of them are as follows:
Strategic priority: businesses can have competitive advantage is this focus on building basic
capabilities (Cohendet, Parmentier and Simon, 2017). For example project management and
legal operation are some of the ability that needs to be improved in case of future growth
and development. Seen in case of rain area airline it is important that its operation and
management are the priority so that future growth in the industry can be given.
Alignment: Even after having complete understanding about capability that need to be
developed, company failed in executive. It is very important for rain and airline that after
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framing Saturday decisions they need to be implemented effectively and should align with
vision and mission of the company.
Effective training method: in order to be successful in future the most important capability any
business needs to develop is human resource (Guhl, 2016). Future is full of uncertainties and
to grab opportunities it is important that employees are effective in their job role. Thus there
is a proper need that runner airline develop effective training methods and implement them
efficiently so that skills can be developed for organisational success.
Engage senior management: in order to be effective in growth and development management
needs to be engaged at every level of the organisation (Holloway, 2017). Strategic decisions
are taken at top most level and it is important that while implementing senior managers
supervise and control activity. This will ensure that processes are in direction of achieving
growth and development strategy for organisational success in future.
Future insight: One of the most basic and important capability that any organisation need to build
is looking ahead. It is important that categories and operations are planned in such a way
that it Infosys on achieving future goals and objectives. Same in case of rain and airline
management need to make strategy for future and should analyse business in moment to
grab opportunities it is to have sustainable advantage in future.
Capabilities that help in Innovation: The present capabilities of the organisation will also help
in innovation for future. Some of the essentials of innovation that again are airline possess
are as follows:
Not difficult: it is not a secret that innovation is easy to attempt for already established company.
Due to strength and skilled employees it is easy for them to become better innovators. In
case of Ryanair airline they have a team of skilled, expertise and talented workforce working
at ground level to increase customer satisfaction. This is one of biggest strength of the
airline which will also help it in future innovation.
Aspiration: one of the basic motivation for innovation is aspire to reach up to a certain level
(Siachou and Flouris, 2015). There should be Target for innovation and strategy should be
planned so that it can be achieved effectively. In case of Ryanair airline it has Aspire to
become low fare airline in the industry, and plan accordingly and achieve that effectively.
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This strength of achieving organisational targets with aspiration will also help company to
innovate in future.
Discover: innovation required different actions so that it can discover creative solutions. In order
to innovate, company needs to think out of the box and scrutinise different areas of business
to find scope (Russell, 2016) In case of Ryanair Airline, company has developed business
model in which different number of flights are employed so that they can become least fair
service provider in the industry. This strength of finding creative solutions to the business
objectives will also help company to innovate in future.
All above points clearly defined that manner airline is effective in present capabilities and this
will also help company to innovate in future so that it can have competitive advantage in
market.
SWOT Analysis: It is important that business analyse existing performance and capability so
that it can innovate in the future. In order to do this swot analysis is done so that strength
and weaknesses can be recognised to grab opportunities and identify threats in the market
(Tidd and Bessant, 2018).
Strength: The biggest strength of the company is strong brand name because of its effective and
attractive customer services. Due to its management strategy which are innovative in nature
lead Ryanair airline to become first low-cost airline. All this help company to be competitive
in the marketplace in operating its activities.
Weaknesses: each and every company has some loop holes but needs to be overcome. Such in
the case of runner airline, change in policies of compensation and labour relation,
misleading of the official website And no free food services has lead to create weaknesses
for the organisation. This is also hindering brand image in the mind of customers.
Opportunities: due to rapid growth and development of aviation industry in the world it is
creating a opportunities to expand business. As a result Ryanair airline will implement
different strategies so that it can grow in future (Kerzner, 2019). For this it will frame
different management, expansion, competition and reduction strategies so that it can become
low-cost airline in the industry.
Threats: there are different threats for Ryanair airline which can lead to decrease in profitability.
Competition is one of the biggest threat, entrance of new companies, changes in customer
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preferences and risk management all these can serve as obstacle in future growth and
development.
Thus the strength of strong brand image and lower fare airline in the industry will help company
to innovate in future and have Sustainable advantage in the industry (Leavy, 2015).
Leadership: In order to develop innovation in organisation leaders and their leadership style
plays an important role. Employees who implement top level decisions and strategies into
profit making face many challenges. Thus there is need that leadership style should be
effective enough so that equal participation can be encouraged. For this Ryanair airline can
adopt different types of leadership style like participative, democratic and transformational.
In participative leadership style, equal participation from each employee is encouraged
while making strategies so that they feel empowered and motivated. Another is democratic
in which along with responsibilities authority is also provided so that employee can take
decisions and make changes (Awadalla, 2017). Last is transformational leadership style
which is most suitable in case of Ryanair airline as business will implement changes for
innovation that will provide communication and influence behaviour so that resistance is
less. This will also help company to have sustainable advantage in future.
Competition: The main competition is from different companies that will grow its business and
have competitive advantage in industry. Ryanir airline in future due to increase in customer
demands about aviation services will also lead to entrance of new firms (Lüke, Walther and
Wäldchen, 2018). Due to future developments in innovation and technology possess
challenge to airline as competition in the industry. To mitigate this and have innovative
services in future company has to strengthen its driving factors so that it can have
competitive advantage in market.
CONCLUSION
From the above discussion it is concluded that airline industry is concerned with providing
movement of people and fried from the route of air. It is one of the rapid growing industry in the
world with the help of innovation. Innovation in simple words can be defined as new and
creative thinking that leads to solution of a problem in an organisation. Innovation management
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is a process which leads to managing innovation related procedures in the company. There are
different capabilities of organisation like effective training method, strategic priority, senior
management engagement, etc. which need to be billed for future development of the company.
There are different abilities also that help companies in innovation such as Aspiration and,
discovering which are strength of company. SWOT analysis helps in analysing internal and
environment of the organisation to find out its strength, weaknesses, opportunities and threats.
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REFERENCES
Books and Journals
Aalbers, R. and Dolfsma, W., 2015. Innovation networks: Managing the networked
organization. Routledge.
Awadalla, H., 2017. Managing Innovation in the Service Sector in Emerging Markets.
In Promotional Strategies and New Service Opportunities in Emerging Economies (pp.
144-163). IGI Global.
Biemans, W., 2018. Managing innovation within networks. Routledge.
Cohendet, P., Parmentier, G. and Simon, L., 2017. 13. Managing knowledge, creativity and
innovation. The Elgar companion to innovation and knowledge creation. 197.
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and
internationalization in innovation. Routledge.
Epstein, M. J., Buhovac, A. R. and Yuthas, K., 2015. Managing social, environmental and
financial performance simultaneously. Long range planning. 48(1). pp.35-45.
Guhl, L., 2016. Managing Corporate Culture for International and Global Competitive
Advantages in the Airline Industry. GRIN Verlag.
Holloway, S., 2017. Airlines: Managing to make money. Routledge.
Kerzner, H., 2019. Innovation Project Management: Methods, Case Studies, and Tools for
Managing Innovation Projects. John Wiley & Sons.
Leavy, B., 2015. Three ideas for creating new value through managing risk in today’s dynamic
environment. Strategy & Leadership. 43(1). pp.16-25.
Lin, Y. H., 2015. Innovative brand experience's influence on brand equity and brand
satisfaction. Journal of Business Research. 68(11). pp.2254-2259.
Lüke, K. H., Walther, J. and Wäldchen, D., 2018, June. Innovation management methods in the
aviation industry. In International Conference on Innovations for Community
Services (pp. 161-177). Springer, Cham.
Mendi, P. and Costamagna, R., 2017. Managing innovation under competitive pressure from
informal producers. Technological Forecasting and Social Change. 114. pp.192-202.
Mousavi, S., Bossink, B. and van Vliet, M., 2018. Dynamic capabilities and organizational
routines for managing innovation towards sustainability. Journal of cleaner
production. 203. pp.224-239.
Russell, W. E., 2016. Managing Innovation Search and Select in Disrupting Environments.
Siachou, E. and Flouris, T., 2015. Managing the risky matter of business model innovation in the
context of the airline industry. International Journal of Aviation Management. 2(3-4).
pp.183-194.
Tidd, J. and Bessant, J. R., 2018. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
Tidd, J. and Bessant, J., 2018. Innovation management challenges: From fads to
fundamentals. International Journal of Innovation Management. 22(05). p.1840007.
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