Risk Management Design: Airline Company Project and Strategies

This report details the design of a risk management system (RMS) tailored for a new airline company, emphasizing the complexities of large-scale projects in the aviation sector. The RMS focuses on identifying critical risks, including project scope definition, technical knowledge gaps, quality issues in leased items, market competition, project delays, budget constraints, regulatory compliance, investment risks, safety concerns, and environmental impacts. A risk prioritization matrix is presented, ranking risks based on impact and probability, with risk owners assigned for each. The report outlines comprehensive risk mitigation strategies addressing human resource acquisition, project scope management, project delay prevention, budget control, quality assurance, market competitiveness, regulatory compliance, investment strategies, safety protocols, and environmental impact assessments. These strategies involve talent acquisition programs, stakeholder involvement, project automation, budget tracking, expert inspections, market research, competitive pricing, regulatory integration, and environmental impact studies, ensuring a proactive approach to managing various risks associated with launching and operating a new airline.

Running head: DESIGN OF A RISK MANAGEMENT
DESIGN OF A RISK MANAGEMENT
Name of student
Name of university
Author’s note:

1DESIGN OF A RISK MANAGEMENT
Risk management system for a new airline company:
Overview of a risk management system:
Risk management system refers to an integrated approach for identification of risks and it
provides techniques for mitigating those risks associated with a project. It is important to
design an effective risk management strategy to ensure that the execution of the project is
successful. Risk management provides context to analyse activities in business in details and
identify if there is a risk aspect which might affect the business process. It also helps to
identify risk prioritization and therefore makes it easy to deploy resources for managing risks
effectively and efficiently. Therefore, risk management is a systematic approach for
identifying and managing risks in a business context.
Application of risk management system for this project:
The projects that are considered by the airline companies often require large infrastructure
and resources which makes these projects complex. Therefore, these projects require proper
strategies for ensuring that risks are properly identified in different aspects of the project.
Along with this, in airline projects, it is required to consider the safety of passengers and
therefore, design of a proper risk management system is of prime importance in this context.
Features of the risk management system:
The important features of the risk management system are:
 Risk identification framework
 Risk prioritization process
 Risk mitigation strategies

2DESIGN OF A RISK MANAGEMENT
Identification of risks for the project:
The following risk frameworks will be considered by the risk management system to identify
risks for this new airline project:
Project scope is not properly defined:
This is one of the most significant risks for the project and the risk management system
identifies if the project scope is properly defined or not. This is important in the project
because if the scope of the project is not clear to the project team, the project execution might
not be consistent with the project goal and the project objectives.
Lack of technical knowledge:
When employees are employed for executing airline services, the requirement is such that
these peoples require detailed technical knowledge to ensure that they are capable of
managing aircraft and its associated equipment. However, talent acquisition is a significant
issue in the airline industries. It is not only enough that people that are employed have the
proper technical knowledge, but a number of people that are employed also needs to be
consistent with human resource requirement.
Quality issues in the items leased:
As the items are not new and leased, there might be quality issues which will affect the
quality of the service provided and along with that it might affect the safety of the passengers
and therefore this risk management system considers this as an important risk aspect of the
project.
Competition in the market:
Another important risk aspect that this RMS considers is market competition. If the airline
company is not capable of ensuring quality service and that too in affordable price, then it is

3DESIGN OF A RISK MANAGEMENT
not easy to ensure consumer satisfaction and this will affect market position as well as the
business of the company. Therefore, the project will not be successful in terms of the
financial performance of the business.
Delay in the project:
Large projects are often delayed and therefore identification of project delay is an important
strategy for identification of project risks and therefore, it is considered for the risk
management system designed for this project.
Project budget is not proper:
As the airline project requires large infrastructure and these projects are technically complex,
if proper budget is not ensured then the project will not be successful. Therefore,
identification of project budget is an important strategy to identify project risks.
Regulation in the industry:
If the airline company do not comply with the required regulations then they will not be
allowed to offer commercial services to the consumers and therefore analysis of regulatory
compliances is required as it is an important risk source for the project.
Investment risk:
In large projects like offering commercial airline services to the consumers, significant
investment is required but ensuring a proper return on investment is not that easy and
therefore increases the risk of the project as well.
Safety risk:

4DESIGN OF A RISK MANAGEMENT
It is always a challenge for airline companies to ensure the safety of the consumers and if this
is not ensured then not only the company need to pay for that but they also might need to
consider legal consequences as well.
Environmental risk:
These type of projects impact the environment significantly if proper strategies are not
ensured. If the project has an adverse impact on the environment safety, then the government
will not allow executing this project and therefore this need to be considered while
identifying risk for the project in this context.
Risk prioritization techniques:
The risk management system or the RMS provides a risk prioritization matrix for prioritizing
risks according to their impact on the project in terms of project execution and project quality
as well.
Risk ID Risks Impact Probability Risk Owner
1 Employee lacks the
technical knowledge
required for the project
Very high High Project manager
2 Quality issues in the
items leased
Very high Medium Quality
assurance team
3 Competition in the
market affects the
business process
High High Marketing
manager
4 Project is delayed Very high Very low Project manager

5DESIGN OF A RISK MANAGEMENT
and team leader
5 project budget is not
proper
High Low Project manager
6 Lack of regulatory
compliance
Very high Very low Project leader
7 Return on investment
is not proper
Medium Low Project manager
8 Safety assessment is
not proper
High Medium Project manager
and team leader
9 Assessment of
environmental impact
is not proper
High Medium Resource
Manager
Risk mitigation technique:
The risk management system or the RMS will deploy the following techniques for mitigation
of risks with reference to various risk sources identified through risk identification framework
of the RMS.
The risk mitigation strategy for risks related to human resource acquisition:
 In order to mitigate risk related to human resource acquisition, it is required to design
an effective talent acquisition program and one of the most important thing that needs

6DESIGN OF A RISK MANAGEMENT
to be considered is to identify the resource requirement so that required number of
people are employed for this project.
 While selecting the employees, it is required to categorize people according to their
qualification and it should be analysed whether their knowledge and expertise are in
accordance with the requirement of the project. When employees are selected through
this strategy, it is easier to ensure that employees are capable of executing the
requirements of the project.
 Along with this, it is required to provide training to those employees so that it is easier
for them to identify what are their job responsibilities and what activities they need to
do in the project. This will not only provide a comprehensive idea to the employees,
but they will be confident in the application of their technical knowledge which will
ensure that the activities required in the new airline projects are executed effectively
and efficiently.
The risk mitigation strategy for risks related to project scope:
 Project team will be involved while defining project scope
 Project manager along with team leaders will ensure that communication with the
project team is proper
 Project manager will ensure that coordination within project teams is effective and
efficient as well
The risk mitigation strategy for risks related to project delay:
 Project objectives will be defined in details to ensure that project is executed
according to the schedule
 Resource requirements will be analysed in details and will be procured accordingly

7DESIGN OF A RISK MANAGEMENT
 Stakeholders will be involved in the project planning to define a proper project
schedule
 Project automation software will be considered for reviewing project progress and
identify project delay so that it does not affect the execution of the project
The risk mitigation strategy for risks related to project budget:
 identification of resource requirement and define budget accordingly
 ensure additional budget for the project
 deploy budget tracking software for effective management of budget
The risk mitigation strategy for risks related to quality issues in the items leased:
 items after leasing will be checked by experts
 once items are checked, they will be integrated and checked as an overall system for
identifying if there is any quality issues
The risk mitigation strategy for risks related to competition in the market:
 extensive research will be conducted for identifying market demands
 competitive pricing will be offered for ensuing consumer satisfaction
The risk mitigation strategy for risks related to regulation in the industry:
 requirements for regulation will be first identified and integrate that into project
execution
 regulatory permission will be ensured from the government before introducing service
in the market
The risk mitigation strategy for risks related to investment risk:

8DESIGN OF A RISK MANAGEMENT
 market opportunities will be first identified and investment will be made accordingly
 while offering competitive pricing, it will be decided with reference to the investment
made in the project
The risk mitigation strategy for risks related to safety risk:
 quality assessment will be conducted for items procured for the project
 safety awareness program will be designed for employees as well as for the
consumers
The risk mitigation strategy for risks related to environmental risk:
 an detailed environment impact will be conducted before executing the project
 experts will be conducted to identify opportunities for designing an effective program
to ensure that the environment is not affected for the execution of the project
 it will be ensured that the recommendations of the experts is integrated in the project
effectively and efficiently as well