Risk Management System for Airline Company

Risk management system 1
Risk management system
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Risk management system 2
Risk management system
Risk refers to the uncertainty of an occurrence which result to financial loss, injury or
damage to the object subjected to the occurrence. Therefore, risk management systems can be
described as the process of identifying, assessing and controlling various threats to the business’
operational activities like financial resource, human and other resources involved in the
production and operation process within the organization. (Bromiley, et al, 2015, pg. 275).
Risk is categorized into three groups based on the impacts on operation and production
activities to the organization that is financial risk, business risk and lastly non-business risks.
Financial risk is associated with financial loss to the business upon its occurrence hence it causes
capital loss to the operation of the business while the business risk is types of risks which are
taken up by the business enterprise themselves in attempt to maximize shareholder profits and
value. For instance, a business taking high-cost risks while marketing its new product to the
audience to gain high profits. (Falkner and Hiebl, 2015, pg. 133).
Non-business risk is a type of risk that is not under the control of the firm. They arise due
environmental influence. They are caused by political and economic imbalance.
The thesis of the term paper presented entails risk management plan for the newly started
airline company to aid in identification, control and treatment of various risks associated with
flight management.

Risk management system 3
Risk management plan
The risk management plan for the Australia airline company is very essential for the
management body since most common risk associated with flight operation includes economic
risk, legal risk, compliance, reputation and strategy risk hence a well-defined management and
treatment plan for risks are necessary.
In managing risk related to Airline Company’s operation, risk manager has the responsibility
to design a risk management plan to manage speculated risk to the company. Risk management
process includes steps like risk identification, analysis of the related risk, evaluation of risk,
treatment of the identified risk and lastly monitoring the process of the management plan.
(Farrell and Gallagher, 2015, pg. 655).
Risk identification
This is the first step in the risk management process. The risk manager will be expected by
the management body and the stakeholders of the airline company to identify the potential risk
associated with the operation of the company. Risk identification process can be defined as the
process of listing possible company risks and their characteristics.
In identifying the potential risks associated with the flight management, risk manager is
expected to design various techniques which he may apply in identifying potential risk within the
company. The designed techniques for identification of risk are discussed in the context below.
(Giannakis and Papadopoulos, 2016, pg. 473).