The aviation industry has been of significant importance to the local and global economy. Different players use the information system to support their activities to remain competitive in a dynamic and competitive industry. Airlines are faced by a cyclical and tightly regulated environment which is also exposed to external factors that affect their operations. Such companies must identify ways that can help them to remain competitive in a changing environment. Different types of information systems help in the management of the companies in the aviation industry allowing them to be efficient and also satisfy the needs of their customers and therefore remain competitive in an ever-changing world. Focus airline is a low-cost international airline company operating in America, Europe, Asia, and Africa. The company has been successful in competing with other low-cost carriers serving the same market. Focus Airline has managed to expand its operations to new markets using its pricing strategy and exemplary service which has contributed to its rapid growth in the domestic and international market. Most of the customers served by the airline are domestic who need quick service and fast movement across different states. The company’s ability to sustain continued growth in the market in different economic conditions can be attributed to its adoption of management information system. Some of the notable systems are decision support system, cloud computing database management system, customer relationship management system, and transportation management system and enterprise data warehouse.
Decision Support System
Focus airline has capitalized on the capabilities of decision support system that assist the management of the company to make timely and relevant decisions. Such capabilities have enhanced the ability of the airline to remain competitive and continue offering low costs flights and still focus on quality. Decision support system has become an integral part of the planning and operations of the company. The system currently plays a significant role in scheduling activities where multiple constraints and objectives are considered and then optimal solutions that have proved to be beneficial over time are obtained. The system also considers the operational accepted time limits. The scheduling process for the airlines is established during the annual planning processes and continues throughout the year. The company tries to allocate its resources optimally and therefore realize improved performance and growth. The system considers the crew, aircraft, airport slots, ground equipment, and maintenance facilities.
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The scheduling decision remains one of the most challenging for the company. The company divides its scheduling activities into different stages which include network development, crew scheduling, fleet assignment, revenue management and maintenance planning. The company makes its decisions sequentially allowing the use of the results of one stage to be the input of another. The decision support system in use helps to solve some of the problems in one or more stages. Despite addressing the challenges that arise at the different stages, some of the output is suboptimal and conflicts between the outputs might lead to inefficiencies. Trying to fix the decisions of earlier stages eliminates flexibility in the subsequent stages which can lead to poor results. The company also faces some problems when it ignores some of the restrictions at the early stages as it can lead to infeasible solutions later where the management has to go through different manual feedback loops to obtain an acceptable solution.
The company has continued to employ operations research algorithms to improve the quality of accessible hardware creating an opportunity to combine the identified scheduling challenges to obtain workable solutions which could otherwise be difficult to obtain using the consecutive approaches. Integration has contributed to the standardization of the stream of information while simplifying communication processes and ensuring enhanced administration of different business practices. The airline has continued to work on integration by integrating the decision support system to capitalize on the opportunities of the system. Integration has also enhanced data storage as well as manipulation, the setting of business objectives and performance measurement and organizational structure and process.
Integrating decision making has enhanced the ability of the company to make relevant decisions in a timely manner concerning its scheduling processes. The airline has benefited from demand driven dispatch where fleet assignments are combined with revenue management. The flights, in this case, are assigned to different aircraft type to ensure that the schedule is operational and realizes maximum profits. The process is usually completed in advance, for example, three to four months before the operations begin whereby it is conducted on an aggregate level for example for a typical day or week. Passenger demand forecast is conducted and the outcome is used to estimate the revenues of the airline. Predicting the level of demand combines competition and network effect to develop an overview of the entire market without employing fine adjustments. The company monitors the progress of the schedule versus the developments in the market. it is common practice for Focus to realize few days to departure that the aircraft type that was assigned to a flight is suboptimal. The flight can be over or under-capacitated.
Revenue management for the airline operates from a detailed level where information on each flight is included. Information includes the departure date for the booking period, the point of sale and the fare class. As the scheduled date nears, the bookings for a flight are observed and the airline has accurate information of the expected load. The information can then be used to make fleeting decisions to ensure that the assigned capacity matches the expected demand. The final decisions must be made carefully as the scheduling stages that follow the assignment of the fleet are at an advanced stage by this time and it is not possible to adjust the results for the new assignments. The scheduling and revenue management practices have contributed to annual revenue increases of 3%.
Focus Airline completes its network development in advance which involves decision making in identifying the network structure where new markets to be served are selected and dropping some of the current markets served by the airline. The decision is usually in line with the business model of the airline. Evaluating the performance of a given market is affected by macroeconomic and service related issues. Selecting a market is connected to the optimization of codeshare agreements which has the potential to enhance the network of the airline. The airline determines service frequencies for the local markets and makes appropriate decisions on how to increase its frequency share and therefore enhance its demand share. The airline also ensures that the decision on the departure and arrival time of its flights maximizes its network connectivity. Such decisions affect the originating and terminating passengers through service delivery at the convenient time and also ensuring that the connecting customers are no inconvenience. The decision support system assesses the performance of the entire network. It ensures that the revenue potential for the company is maximized and operates with available resources.
Decision support system also supports integrated rooting by ensuring that flights that are served by similar aircraft are linked together. It enhances the sequencing of flights to pairs that are then assigned to different pilots or even cabin crew members. Such approaches ensure that there are minimal disruptions. The airline routes the aircraft and crew simultaneously to ensure that disruptions are avoided and also the crew cost is minimized. Flight connections with the lowest crew cost yet satisfy the constraints of operating the aircraft while maximizing revenues are prioritized to ensure that the system uses the maximum number of connections allowing the crew to stay in the same aircraft. The airline has managed to reduce the crew cost by 1% while ensuring that scheduling remains robust. The airline has also integrated routing decisions with gate assignment as well as maintenance scheduling processes.
The ability to match the capacity of the fleet and the demand has enabled Focus Airline to remain competitive in a dynamic market that is faced by numerous challenges that threaten the performance of airlines. Fleet capacity management decisions are critical to the success of the companies in the industry. Decision support system is helpful in the decision concerning expansion or even reduction of the fleet capacity where Focus can decide to purchase, lease or dispose of some of its aircraft. The decision support system adopted by the company is of different categories which include data-driven, knowledge-driven, model-driven, document and communication driven (M.MohieEl-Din, I. Ghali, Sadek & A. Abouzeid, 2015). The different categories support unique activities within the company to ensure that the decision support system achieves its intended purpose. It enhances the ability of the management to make informed decisions on the best course faction for the airline.
Cloud Computing Database Management Systems
The aviation industry has embraced cloud computing in its operations. The companies require timely and relevant information which can be used to make decisions. Focus Airlines has exploited the benefits of cloud computing to enhance its operations. Cloud computing is a technology that involves the accumulation of massive resources in large data centers and interconnecting the same to provide consistent, secure and inexpensive services through the internet. The main resources involved include applications, storage, and databases, networks, computers or host. Cloud computing has emerged to be a critical element of the aviation industry by providing faster solutions to a changing environment and eliminates the need to invest in the entire infrastructure allowing companies to pay only for the services that they use. Cloud computing has also allowed Focus to simulate the components of each aircraft rather than having a physical prototype. The company maintains a huge set of data which is gathered, ranked and extracted for timely decision making. The company, however, faces challenges of fully deploying cloud computing due to communication issues through the internet as it is online satellite communication that is used (P & Guruprasad, 2015).
Cloud computing has been useful to the company as highly critical data maintained in the cloud is used in real time analysis for predicting weather conditions and traffic. Focus Company has built an advanced dedicated core system that helps in reservation management, finance, baggage management, customer relationship, safety and crew scheduling. The traditional approach posed serious challenges for the company as fight information and crew increased. The system was inefficient, had low security and used more power. The company decided to shift to cloud computing where the solution has a cloud data center with 500 VMs that efficiently manages the airline.
Cloud computing has enhanced the abilities of the company to minimize its costs and reduce its workforce. The use of agile processes has enhanced the ability of the airline to use low-cost strategies while delivering high-quality services. Focus Airlines has enhanced its ability to use information technology in luggage drops, self-boarding gates, and label printing. The ability to achieve such functionalities is supported by generated data from check-in, bookings as well as reservation systems. The system also maintains customer information which is maintained for visas as well as securities. Service providers are able to provide elastic services and scalability as required by the airline and enhancing access to authorized people only. The airline has also reduced the need for software update and upgrades allowing it to focus on its core business.
Cloud computing has also been successfully used by the airline in aircraft maintenance where ordering, replacement and servicing a wide array of aircraft components while ensuring that the company is using the latest technology, regulatory compliance and safety guidelines. Additionally, cloud computing has been useful in travel time estimation, emission control, aircraft identification, integrated fare management customer loyalty programs as well as optimizing the assets of the company.
Customer Relationship Management
Customer relationship management involves the use of customer information to enhance customer relationship by continuously refining insight to meet customer needs economics and habits. It also involves developing tailored value which is targeted based on their information and focusing the resources of the company towards building long-term value. Focus airline collects and refines customer related information and also gathers actionable insight in addition to their application. The company develops an understanding of how it can fulfill customer expectations to enhance its service offerings. The company engages in customer relationship management as a way of enhancing its bottom line (Eid & Zaidi, 2010). According to Focus CRM is a market pull strategy that identifies the needs of the consumer and addresses them. The company engages in programs that enhance their free marketing giving its customers an incentive to continue using the services of the Focus Airline.
Loyalty programs have the ability to generate high cash returns and have turned to profit centers. Such programs drive traffic and the ability to share customer information allows the company to develop strategies that meet their needs and address the challenges they face. The company can also data mine to obtain relevant information that can be used to develop real-time marketing and customized products for different segments (Eid & Zaidi, 2010). The use of customer relationship program enhances the company’s ability to handle complains appropriately and in a timely way.
Customer relationship management enables the company to segment its market and develop appropriate products and services that exceed the expectations of each market segment. Customers' can be segmented by lifetime value thus ensuring that the objectives are met. Lifetime value-based segmentation allows the determination of customers based on their importance to the company. Modern marketing activities by the airline industry intend to obtain and maintain a competitive advantage by meeting the needs of the customers. The players achieve this by enhancing the services offered to their customers. Customer relationship management is part of modern marketing and forms the foundation of customer-oriented business activities.
Companies in the airline industry cannot disregard customer relationship management. It is an indispensable element of company strategy and helps in differentiating airlines in the eyes of the customers. It is an interactive process that tries to obtain an optimum balance between the investments of a company and customer satisfaction. Companies try to maximize their profits. Having a customer relationship system has enhanced the abilities of Focus Airline to serve its customers with customized services and in determining the most profitable customers that need to be maintained to realize maximum value form them.
Transport Management system
It is a subset of supply chain management which is concerned with transportation and might form part of enterprise resource planning system. it helps in automating functions like the selection of the carrier, routing, and rating thus helping to reduce shipping as well as labor costs. It works between the airline and the shipper order. It examines different transportation scenarios that minimize costs and ensures timely delivery. It helps the company by suggesting routes and selecting the carrier. It also manages load tendering audit freight bill and conducts the required analysis. The airline can now perform ship in-house something that was previously done through third parties. The application was leased by the company and operates as a cloud-based allowing cost management and reduced investment in infrastructure. The arrangements ensure that the airline online pays for what they have used while ensuring availability, security and reliable services. The rollout of the system has enhanced the performance of the airline and created a new revenue stream in addition to building a strong customer base for the transport business.
Enterprise Data Warehouse
It is a database that houses all business information for an entity allowing its access throughout the company. It includes a unified way for data organization and presentation in addition to classifying the stored data in accordance with its subject while allowing access based on the different functions of an organization. The system has a robust infrastructure which has contingency plans to enhance business operations and continuity access to information as well as high levels of security. The system allows enterprises to access data for analysis and decision making. The data is placed in a central or distributed infrastructure or stored in the cloud allowing access to authorized people. The system ensures that data analysis is enhanced and planning is conducted according to the estimates of the company. The system allows access to the information of the entire organization in a secure manner without compromising its security. EDW for the company can enhance information sharing, decision making, and planning, therefore, giving the airline a competitive edge over its closest rivals.
The use of MIS can enhance the performance of Focus Airline by improving its decision making and planning abilities. It also promotes collaboration and builds a strong customer base that can contribute to the profits of the airline by reducing its overall costs and driving in new traffic. The adoption of management information systems discussed above will enhance the performance of Focus Airline by improving its efficiency and contribute to customer satisfaction and the building of successful relationships with the customers.
References
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Eid, R., & Zaidi, M. (2010). CRM in the Context of Airline Industry. International Journal Of Customer Relationship Marketing And Management , 1 (2), 35-42. doi: 10.4018/jcrmm.2010040103
M.MohieEl-Din, M., I. Ghali, N., Sadek, A., & A. Abouzeid, A. (2015). Decision Support System for Airlines Fleet Capacity Management. International Journal Of Computer Applications , 109 (16), 1-8. doi: 10.5120/19269-0887
P, V., & Guruprasad, H. (2015). A STUDY ON CLOUD COMPUTING IN AVIATION AND AEROSPACE. International Journal Of Computer Science & Engineering Technology , 6 (3), 94-97.
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