Logistics and Supply Chain Management in the Airline Industry

This comprehensive report delves into the intricate relationship between airports and airlines, focusing on logistics and supply chain management within the industry. It begins with an overview of the airport and airline sectors, examining their interconnectedness and the role of suppliers. The report then explores airline operations, including major components, factors influencing airport choices, and strategies for achieving operational efficiency and competitive advantages. It investigates areas for improvement in airline operations, proposes solutions for enhanced airport performance, and highlights the importance of information sharing and collaboration. A case study of Hamad International Airport illustrates strategic decision-making and operational performance. The research methodology, including research design, techniques, data collection, and analysis, is thoroughly explained. The report concludes with a discussion of research limitations and offers valuable insights into the complexities of the airline industry's logistics and supply chain.

Running head: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Logistics and Supply Chain Management
Name of Student:
Name of University:
Author’s Note:

1LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Table of Contents
1. Introduction:................................................................................................................................3
1.1 Overview of Airport and Airline industry:............................................................................3
1.2 The extent of relationship between airport and airlines:.......................................................5
1.3 How suppliers are connected to the airport:..........................................................................6
2.1 Airline operations and its major components:.......................................................................7
2.2 Factors behind choosing an operational airport:....................................................................7
2.3 Airport Operational Efficiencies and operational performance management:......................9
2.4 Factors behind gaining airline competitive advantages:......................................................10
2.5 The areas for improvement in airline operations:................................................................11
2.6 Some solutions for better performance for airport operations:............................................12
2.7 Information sharing, collaboration and integration:............................................................13
2.8 A case study about Hamad International airport: HIA and its operational performances
with strategic decision:..............................................................................................................14
2.9. Conclusion:.........................................................................................................................17
3.0 Research Methodology:...........................................................................................................18
3.1: Research Design:................................................................................................................19
3.2 Research Type:....................................................................................................................20
3.3 Research approaches:...........................................................................................................21

2LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Deductive Research Approach:.............................................................................................22
Inductive Research Approach:...............................................................................................22
Abductive Research Approach:.............................................................................................22
3.4 Research techniques and ethics:..........................................................................................22
3.5 Study Population:.................................................................................................................23
3.6 Sample Population:..............................................................................................................23
3.7 Sample Techniques:.............................................................................................................24
3.8 Data Collection Instruments, sources and method of administration:.................................24
3.9 Primary Data:.......................................................................................................................25
3.10 Design of questionnaire:....................................................................................................25
3.11 Interviews:.........................................................................................................................26
3.12 Secondary Data:.................................................................................................................28
3.13 Method of Data Analysis:..................................................................................................28
3.14 Limitations of research:.....................................................................................................29
3.15 Conclusion:........................................................................................................................30
References and Bibliography:........................................................................................................31

3LOGISTICS AND SUPPLY CHAIN MANAGEMENT
1. Introduction:
1.1 Overview of Airport and Airline industry:
The airlines industry is responsible for facilitating passage by air by providing the
required service to the flight travellers and cargo by the utilization of aircraft that come in the
category of the helicopters and airplanes. It is the 400 B.C. when the origin of the airplane had
been identified. This was during the time of invention of the kite. The airline industry is
structured into three main components namely general, commercial and military. Commercial
airlines might put focus on the different areas of business that pertains to crop dusting, fighting
the forest fires and also in case of operations that are in the nature of rescue. According to the
trade organisation airlines of America, commercial aviation is responsible for driving more than
$1.5 Trillion per year in the economic activities and more than 10 million of jobs. General
aviation includes personal and business or executive flights and the instruction of flights. The
subsectors of the airlines industry comprise of operations, maintenance, finance and marketing
divisions (Belobaba, Odoni & Barnhart, 2015).

4LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Figure 1 : Construction of the Hamad International Airport
There is a possibility of air transportation to be either planned or non-programmed.
Mostly all business-related airlines operate based to a particular schedule, fly regular routes
even in case when the plane is not full. Air carriers which do not function based on a particular
schedule usually fly at the time of non-peak hours. There is more amount of suppleness
concerning choice of airport, flight times and load factors. There are several available jobs within
the industry and provides employability to a record number of people. The airline industry is
characterised by intense antagonism with strong price pressure which causes a continuous
obligation for the enhancement of efficiency. In parallel it can be stated that the industry is
continuously growing with more and more passengers who travel much more frequently.

5LOGISTICS AND SUPPLY CHAIN MANAGEMENT
From the time there has been the increase in the traffic, the airline industry has been
noticeable by high growth and there has been a continuous increase in the productivity. Both
globalization and privatization have a suitable impact on the airline industry (Phellas, Bloch &
Seale, 2011).
1.2 The extent of relationship between airport and airlines:
The basic fact which can be stated with respect to airports and airlines is that they share a
common goal. With the passage of time the relationship between the two has distorted. Airports
were much more bigger but the balance has transferred to the airlines due to the enforcement of
deregulations. In case of airports which have limited slot access, there is a risk of air routes being
suspended immediately. For the maintenance or expansion of airline routes it is necessary for
support of airport costs in a suitable way. For the expansion of complex at airports it is necessary
to draw foreign airlines which do not possess their base in the country as well as national flag
carriers (Teodorovic, 2017).
The important things to keep in mind when airports intensify a business with air carriers
are that the airports are obligatory to offer each company with a fair surroundings for business.
Therefore only one company alone cannot be kept under focus. It also needs to be kept in mind
that airports and airlines are different entities and so no laws can be violated or treated through
their cooperation. For a few decades after the completion of World War 2, both airports and
airlines were protected by the designation of the airlines which were allowed to operate and
restrictions on the establishment of routes pursuant to the government authorization were
protected (Mahadevan, 2015).

6LOGISTICS AND SUPPLY CHAIN MANAGEMENT
In the backdrop of greater selection and concentration within the industry, fewer airports
have the required capabilities to become airline hubs. More and more airlines are forming
alliances and it has become possible for the airports to expand their networks despite the cases
where they are not utilized by the airlines. In the prevailing circumstances, there must be much
more factors and reasons for the airports to attract different airlines and routes than the mere
reduction or exemption of facility charges (Wu, 2016).
1.3 How suppliers are connected to the airport:
The suppliers remain connected to the airport at all times. There are number of providers
for incorporated IT business solutions and communication services for the air transport industry.
There are close monitors on every segment of the airline industry and there is the innovation,
development and management of business solutions over the most extensive network of the
world. The specialists in the air transport infrastructure and IT solutions make it possible for the
complete addition of technology systems at the airports. Resultantly there is a proper
collaboration with all the necessary stakeholders, involving airlines and concessionaires in order
to augment the efficiency, capitalize on passenger fulfilment and advance the overall fiscal
performance.
There are all round facilities of overall communication, monitoring of traffic and control,
the implementation of the data link requirements in order to attach to the networks providing
data and voice communications with suitable customer aircrafts. Proper care is taken to ensure
that there is connectivity and a sense of reliability established within the minds of all the
stakeholders.

7LOGISTICS AND SUPPLY CHAIN MANAGEMENT
2.1 Airline operations and its major components:
Airline workings require the highest principles of safety, dependability, competence as
well as comfort. There is a increasing need for air traffic, a high concentration of movements and
only a limited place available for handling the operations. It is a prime requisite to implement
optimized actions and technologies and a close connection of all relevant stakeholders. The
airline operations consist of all the factors which are relevant to the system. Airlines were
administration owned before the time of liberalization, many airlines were known to be flag
carriers due to the reason that the airports were commercialized and now the airport operations
are supported. The profit margins for the airports are also greatly result the increased profit
margins of the airports.
Airports were conventionally a civic entity because of the massive change within the
airlines, the airports were suddenly originated and seen to be operative towards
commercialization. At the time the airports began to move commercially it was from one
building but with the growth of the industry and the influx of the passengers, there was an
inevitable need to increase in size. The proper revenue management and the type of situations in
which the airplanes need to run are to be considered. Airports and airline facilities are a crucial
aspect of the overall impact of the system.
2.2 Factors behind choosing an operational airport:
There might be several components which need to be kept in mind at the time of
choosing a particular operational airport. The most important choice factor is that of price. Apart
from price there are several factors which can impact the choices of an operational airport.

8LOGISTICS AND SUPPLY CHAIN MANAGEMENT
One crucial factor is that of distance from important locations and the right conditions in
the airport. The best located airports have the chances of more people flocking to the places to
wither catch flights or go to some places. Parking facilities are also important in the operational
airports and their choices. In case the cost of parking in a particular airport is higher than
another, then it might be added to the base price of the flight at the time of price comparison
between different airports. For trips which are loner, free or inexpensive parking can cause huge
savings amounting to hundreds of dollars. Therefore those airports with free and easy parking
facilities need to be chosen at all times. The time and gas money lost to pouring of additional
distance is possible to be improved very speedily.
Another important factor is that of public transit. Every person does not like to take
public transport to the airport. There might be a lot of luggage to the airport specifically at the
time of travelling to far off destinations. It might however work suitably for some customers as
well. Public transit can prove to be a safety valve for many of the routine hassles for air travel. In
case of cancelled flights for which the individuals have no backup plan to go home, flights at odd
hours and at times which a person’s family cannot receive him or her might get salvaged in case
there is the option of a quick ride to the local train station.
The airport tolls are also considered in cases where the airport has to be chosen based on
the price. The travellers who mostly frequent airport management need to use an airport hotel for
some specific reason or another. At times when there are very early flights or at times of flight
delays there might be problems in asking family or relatives to come over. A particular airport
with enhanced choice of nearby hotels and short rides on hotel shuttles can also save the riders
from the tougher issues of air travel.

9LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Another crucial factor which needs to be considered at the time of airport choice is that of
security. After a certain number of trips to any particular airport, there is a clear understanding of
how the security check points are run, how many checkpoints are there and the security crews as
well as configurations (Mertens, 2014).
Handling of baggage at the airports is a crucial factor which the people need to keep in
mind at the times of their choice of airports. The quality of handling of baggage is very crucial in
which an airport is managed. There has been hugely differing assessments on the baggage
handling quality at several airports. In certain airports there also are night curfews in order to
reduce the noise and traffic in the surrounding neighbourhoods. Usually curfews are not major
problems at the airport as they are manageable according to the particular situations
2.3 Airport Operational Efficiencies and operational performance management:
The aviation industry is inflowing towards a new era of change as there is the aim to
fulfil the environmental challenges. The operational efficiency includes different aspects like the
delay against the schedule, availability of flight time, and also the cancellations of flight. A
suitable amount of importance is given to airline costs which are incurred as the result of delays
against the schedule as well as the additional time that the airlines build into their schedules in
the anticipation of delay. The types of estimation of the costs fall under two particular categories.
The “cost factor approach” applies the cost factors to the delay quantities. Different cost factors
might be used for different types of delay which are based on the place where the delay occurs.
There needs to be a type of delay at the time of investigation, the type of aircraft as well as the
duration of delay (Rizzo, 2013).

10LOGISTICS AND SUPPLY CHAIN MANAGEMENT
The problems with the cost factor approach include the limitations in the data which are
necessary for the categorization of delay. The problems include the limitations in the data which
are necessary for the categorization of delay incurred by the airline flights. Another reason is the
limited basis for the determination of the cost factors. Another approach is based on the
aggregate cost and considers the sort of relationship between the total airline cost as well as the
amount of delay. These issues might be incurred at any time by the airline flights. The recent
research which has been conducted recently states that there is a nature of relationship between
the factors to be investigated using the methodology of statistical cost estimation. The estimates
of the total cost of delay to the airlines based on the aggregate approach might be more than what
is based on the cost factor approach. However the differences in the total cost are more or less
fair. The suggestion of the latter approach does not allow in the capturing of much of relevant
information (Farhadi, Ghoniem & Al-Salem, 2014).
Not only the price but the operational cost also needs to be maintained at the airline
facilities. It is crucial for the airline industry to ensure that the operational transits are managed
well and all the components of the aircrafts are well maintained in order to avoid any sort of
delay.
2.4 Factors behind gaining airline competitive advantages:
At the present scenario, more and more people aim to fly and this number is increasing
with each passing day. This is responsible for the economic growth and the rise of opportunities
and also brings challenges to the industry. There needs to be a proper provision for suitable
airport performance from the time of approach to the departure. There are several years of
experience which helps all the airports worldwide. The airports need to create intelligent, highly
integrated airport operations that are responsible for raising the performance continuously. At

11LOGISTICS AND SUPPLY CHAIN MANAGEMENT
present more and more people are opting to use airlines for their travel. The ease and the
feasibility with which the airlines are utilized are a most important contributing factor for the
expansion of airline industry and also for it gaining a suitable competitive advantage.
2.5 The areas for improvement in airline operations:
The aviation industry is changing at a rapid pace. The airports around the world are
challenged to manage the increase at the time of staying profitable as well as maintaining safety.
The airports and airlines need to be facilitated to do more than what they already possess. It
needs to be endured that all parts of the airport are working together. The airport should be
turned into an interactive one. The throughput of the airport needs to be expanded. By letting all
the parts of the airport work together as a single unit it is possible to help the unlocking of the
hidden potential for the airport traffic and its expansion. With the leading solutions for the gate,
airfield, tower as well as service, connectivity of the entire airport needs to be secured and there
need to be more and safer aircraft movements.
There needs to be a proper system integration to ensure that the airline systems are
properly integrated to beat airport congestion. Actually it can be said that congested airports
solved the problem by leading the way for the building of new infrastructure. At present the
airports are finding new ways to overcome the challenge without proper infrastructure
investments. One of these is the proper use of the effectual utilization of several independent of
successive IT and operational improvement steps. It is desirable that there is a proper tailored
approach to boost the performance at the airport. Each airport is diverse and one solution will not
suit all. The solutions must be best suited according to the demands of each airport,
environments as well as business objectives. The totality of the airline programs should be such