This text looks at the various concepts that are involved in contingency planning and crisis management in the aviation industry. Contingency plans and crisis management are mentioned in the text as being inter-related. This is depicted in the form that contingency planning focuses in actions that may help a business overcome a crisis while crisis management focuses on implementation of the strategies or actions after or during the crisis. With regards to the aviation industry, a number of concepts are looked into such as search and rescue, fuel hedges and event coordination among others. The text uses two examples in the aviation industry to show how companies have benefited to contingency plans.
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A contingency plan is any devised plan that is developed so as to manage an unprecedented problem in the future. They are sort of back up plans intended at protecting an organization during any sort of crisis. The contingency plans are usually formed with the main objective of hedging an organization from incurring losses. In ensuring that the organization manages itself during crisis contingency plans help to sustain the market image of the company which makes it continue attracting prospective clients.
Contingency plans include a variety of actions that are designed to tackle various problems in an organization.
Crisis management on the other hand is a series of actions that are taken or implemented during or after the crisis has happened. Therefore, contingency plans and crisis management are interrelated. This is because contingency plans come in to create plans that should be undertaken on the eventuality of a crisis. They are formulated as a forecast of how to handle a various problems in an organization. Crisis management utilizes the plans that have been developed in the contingency plan to implement it during the occurrence of a crisis in an organization and/or in the aftermath of the crisis.
Hence, the credibility of organizations in the business market is highly dependant on the interplay of its contingency plans and crisis management tactics in the event of a crisis.
Concepts of contingency planning and crisis management
The aviation industry is a lucrative industry that employs many people around the world. Due to the huge sums of many that are involved in this industry, contingency plans for disaster management have become inevitable in order to protect individual organizations in this industry from incurring big losses. The major crisis that is evident of the aviation industry is the technological accidents that involve its planes.
Airplane accidents that have occurred have often proved fatal with the entire passenger population being killed in most cases. Because of the fatal accidents of the aviation industry, contingency plans have been formed to sustain these airliners in business.
Search and rescue
This is one of the contingency plans that are usually formulated for airliners in the event that one of the aircrafts causes an accident with its passengers on board.
Search and rescue as a contingency plan for crisis management is defined as the search for people who are facing danger towards their lives so that they may be given assistance. This contingency plan was first identified in the mid 1650 following a ship wreck in the coastline of Australia. (Nabier & Soaler, 2001)
Its early use in this crisis was further advanced in managing crisis in the modern times.
There are various types of the search and rescue plans. There are mountain rescues where the rescue team is sent to assist people who might be involved in accidents in mountainous areas. The rescue plan is also termed as wilderness search and rescue. This is because it may involve movement in difficult areas like deserts, forests and in water bodies.
It also encompasses urban search and rescue where the team moves in urban set ups.
There is also the combat search and rescue type. This involves the team moving to aid persons behind enemy lines. The team in this case is usually the military. The last type is the air sea rescue where the airplane might have crashed in a large water body and hence aircrafts are used to locate the victims of the accident. (North Shore Rescue, 2009)
Fuel hedges have been a recently considered contingency plan form the aviation industry. The oil crisis that began in the early 2003 saw the prices of crude oil sky rocket to over 200 US dollars a barrel. (Lee Jung, Song, 2005) This increase of crude oil in the international market came as a result of the reduction in supply of this important commodity according to a directive issued by the oil producing and exporting countries. Due to the economics of demand and supply, the cost of crude oil sharply increased and thus the aviation industry was facing a crisis. The high costs of crude oil were directed to the consumer who is the passenger in the airlines making air transport expensive. However, the costs of crude oil has recently stabilized, this has given a lesson to the aviation industry to crate contingency plans for any future occurrence in the hiking of fuel prices that propel their aircrafts. (Kanz, 2005)
Terrorism is an activity that has been on the increase in the world since the terrorist bombings that were initiated against the US citizens by the Al-Qaeda terrorist group in the 2001.
These acts of terror have been intensified and in 2006, a terrorist plot against a commercial plan was stopped before being initiated. This happened in Britain’s Heathrow airport where a person of Islam origin was arrested for carrying suspicious luggage. On further investigation, it was found that the language that contained liquids that were of explosive nature intended to blow up the plane. Due to this, the airlines in the US and the UK made contingency guidelines towards the quantities of liquids that individual passenger were allowed to carry in to the plane.
The aviation industry is considered to be a major transmitter of contagious diseases from one region of the Earth to another. Serious epidemics of fatal diseases have been recorded to spread to neighboring countries aided by air transport. Due to this realization, contingency measures have recently been put in place to contain such diseases in their places of origin. Typical example that has brought a lot of worry to health care experts is the Influenza H1N1.
(Jose, Guerera, & Poliski, 2008)
This disease is highly contagious just like any other form of flu and there is no current treatment for it. This has been received with great concern in the aviation industry. In response to it and other disease epidemics, contingency measures require the notification of the aviation of the imminent pandemic. The aviation industry is also required have proactive communication with their stakeholders. (Ibid)
Information management and media
The aviation industry is usually characterized by delays in scheduled flights in many regions. According to statistics relayed by the US department of transport, delays in flight were recorded as 502 in the year 2007. Despite the number falling to 265 in 2008 and 42 in the first quarter of 2009, this remains still a big figure. (CACO, 2009) These delays have caused many passengers to complain about the state of service of the operating airlines. Many complaints being directed towards a specific airline usually makes its business image be tarnished. This consequently leads to the loss of customers ho would have otherwise booked a flight with the airline. Since airlines do not want to incur loses by loosing their customers, the media has been used to relay information to passengers who have scheduled flights in case of delays or cancellations.
The provision of information to the public in a systematic manner acts as a contingency measure and encourages the credibility of the airline involved.
In addition, this becomes an appropriate contingent plan where an airline is involved in an accident. Information relayed by the aviation authority, the airline and the media help the relatives of the passengers to know their whereabouts.
Disaster victim identification
The occurrence of disaster in inevitable as it is considered to be part of life. (Martel, 1998) The aviation industry is not left out on this one due to the technological disasters that have and may occur with their airplanes. Therefore, in the event of such disasters in the aviation industry, disaster victim identification becomes an important aspect in contingency planning.
This contingent aspect lies on the hands of the police (Interpol, 1997) and therefore in any industry where accidents occur and lives are lost, the police become the main participants. Because nothing else can be done by the airline upon the event of where lives are lost, the police are let to identify the victims of the accident. Here, identification is achieved through correlation of ante-mortem information got from the relatives and post-mortem data that would have obtained from the scene. (Interpol, 1997 )
In the event of a disaster in the aviation industry, an event coordination contingency plan has to be formulated. In doing this, the outcomes of the crisis can be easily managed to ensure that the business has the capability to continue. In the aviation industry, the occurrence of an accident requires the formation of a team that would coordinate to settle the crisis or disaster. Therefore, a safety officer in the aviation authority and the airline would have to be involved. An event manager would have to be selected to oversee the coordination in the group. First aid personal would be involved in giving assistance to survivors. The police would be involved as previously mentioned in the identification of the victims who have succumbed to the accident.
(Mac Brian, 2003)
Humanitarian assistance as a contingency measure in the aviation environment involves activities that are done to save the lives of people from their suffering. This is given in the course of a crisis or in its aftermath. (Humanitarian.org, 2009)
The humanitarian assistance that can be given by the aviation industry in the event of a disaster can range from money inform of insurance cover of the victims, supplies of essential commodities, personnel to help them recover from their suffering among others. All this activities play an important role as contingents in a crisis that may befall the aviation industry. Therefore, it is necessary for every business industry other than the aviation industry to prepare contingency plans so that they may have a way of maneuvering through crisis that would otherwise make the business seize to work.
Cases of where contingency planning was beneficial to the aviation industry
Contingency planning as already mentioned is important in enabling a business’s continuity prior to a crisis or disaster that befell it. Instances of where contingencies have been used have shown to bare fruit in enabling business to overcome crisis. In the aviation industry, contingency planning has been evidently used to overcome crisis.
One example of where contingency planning has been observed to work in overcoming a crisis is in the Southwest airlines. The southwest airline is a popular local airliner in the US. Its dominance in the aviation industry has been attributed to its cheap price of air tickets.
In the onset of the oil crisis in the beginning of 2003, Southwest had already invested in fuel hedges. At the beginning of 2003, the oil producing and exporting countries had cut back on the production of crude oil. This resulted in the supply of crude oil in the international market to reduce. This scarcity in crude oil made the cost of a barrel of crude oil to increasing reaching is record highest of over 200 US dollars in the year 2008. Because Southwest had created a contingency plan on the increasing costs of oil, it was buying oil at a cheaper price during this crisis when its competitors where pay higher amounts. In the first quarter of 2008, the airline was buying a gallon of its jet fuel at 1.98 dollars. Its competitor American Airlines was buying the same quantity of fuel at 2.73 dollars. This was thus exhibited in the continued cheap airfares of this airline in addition to its shares performing well in the stock market when others were declining in price.
By hedging the price of fuel, southwest airlines has come pout as a dominant airline company in the local air transport scene of the US. This has enabled it to make serious gains whereas other companies in the same aviation environment have suffered huge losses. This contingency plan by the airline has been viewed as a well played out plan to escape the financial burden in oil cost during the oil crisis. (Kogen, D. 2008)
Another example of the benefit of contingency plan in the aviation industry can be exhibited by the two plans that rammed into the twin towers in the terrorist attacks of 2001 in the US. The Al-Qaeda terrorist group which claims the involvement in this act used its members to hijack planes that were flying the American airspace. The hijackers took hostage of the planes crew members as well as the passenger and rammed the planes in an act of suicide to the world trade center building. The incident led to the loss of many lives as well as of property. Because the two planes had contingencies on them in form of insurance, the airline owners were beneficial. This is in addition to the two other planes that were involved in the terrorist attacks. From the aviation liabilities that were indicated, the cover of all the four planes was to a sum of 500 million US dollars. Hence, the airline companies would be able to purchase new aircrafts to complement the ones that were destroyed. Other than the planes benefiting from the contingency, the passengers who were victims of the attack on board of the planes had a third arty compensation. However, the third party compensation of the passengers’ families was limited to about 1.5 billion dollars. Therefore, the passengers of the hijacked planes would have to share 1.5 billion US dollar amongst the relatives. (Risk management solutions, 2001)
Contingency plans are important for securing the future of business. The help business to implement alternatives to situations that they may face in a crisis or disaster. Therefore, they are considered to play a vital role in maintaining their customers. In maintaining their customers despite any form of crisis in the organization, the business will continue to survive and make profits as its main goal.
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