Aviation Strategic Management

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Introduction

The timely addressing of potential threats is a mandatory aspect of the activities of airports. The inability to respond to risks and unwillingness to take advantage of opportunities available to optimize the work process impedes the development of these facilities and creates obstacles for the competent fulfillment of goals. For global airports, both opportunities and threats can have a significant impact on operations due to related factors, such as company size, market share, number of passengers, and other operational aspects (Randt, Jessberger, Plötner & Becker, 2015). In addition, these circumstances determine the nature of the measures taken by air carriers to create a productive and safe working environment – security measures, building a managerial vertical or implementing development steps (Price & Forrest, 2016). Strategic opportunities and threats that airports may face globally over the next decade determine the specifics of operational activities based on current trends in social, economic, technological and other fields. This work aims to describe the concept of strategic opportunity and threat, present situations when one factor can pass into another and vice versa and offer measures and ways to address them at world airports.

Concept of a Strategic Opportunity and Threat

The concept of a strategic opportunity and threat is a tool that is used in various fields to analyze external aspects and development methods and offers managers to evaluate potential drivers that affect the workflow. Moreover, this work has a clearly defined methodological framework and is part of a more general concept of SWOT analysis that includes the strengths of a business and its weaknesses, as well as development opportunities and potential threats (Flouris & Lock, 2016). Based on this concept, opportunities and threats are those criteria that are utilized for external analysis and evaluation of drivers that are not dependent on companies’ operational activities. For modern airports, addressing these aspects is essential since the management of these civilian facilities is to evaluate the working environment to ensure safe and stable operations. Moreover, the existing trends in various industries can move from one category to another, and yesterday’s threat can become a valuable opportunity today due to the development of a technological, economic or another environment. Therefore, the assessment of both phenomena should be cumulative and cannot be done separately to avoid gaps in the assessment of development plans.

The external operating environment for airports is essential to analyze carefully since this aspect of activities cannot be resolved due to simple internal changes. For instance, the risks of a rapid decline or, conversely, an increase in demand for the services of a particular facility are difficult to predict in advance, which can create challenging conditions for working in the traditional mode (Zakharova, 2017). The concept of an opportunity and threat, as part of the SWOT analysis, is also used in other industries to identify the degree of responsibility that the parties involved have to maintain a normal balance of work (Soltwisch, 2015). However, for modern airports, addressing a strategic development model through a comprehensive assessment of external factors is crucial largely due to the inadmissibility of deterioration in operational performance and the importance of providing adequate services. In the context of creating sustainable operations and a sustainable data processing system, passenger reception centers cannot rely solely on internal aspects of development, which is caused by dynamic social and other aspects. Thus, the analysis of the concept of an opportunity and threat is an integral element of competent managerial policies.

Transition from a Strategic Threat into an Opportunity

Despite the fact that the concept of a strategic opportunity and threat implies a clear justification of external factors affecting the operating environment of airports, the components themselves are not static. For instance, the human factor is one of the risks that may be avoided or minimized only if the professionalism of employees is constantly monitored and verified. Nevertheless, the threat caused by an error in the performance of immediate duties may be a potential opportunity to optimize the workflow. Implementing a monitoring system can be an incentive for employees to demonstrate better results, thereby eliminating threats associated with internal and external risks, for instance, the loss of customer base (Chen, Lin & Vincent, 2017). Another example of such a transition is the addressing of the security regime while maintaining the stable operation of airports. In case of safety culture is not up to standard, this is one of the priority areas for introducing appropriate control algorithms, and the example of the International Civil Aviation Organisation is evidence (David-Cooper, 2016). As a result, by identifying gaps, valuable interventions can be implemented successfully.

The transition from a threat to opportunity may be considered by the example of the strategic expansion of airport operational activities. For instance, air transportation on short routes is often inferior to high-speed trains in popularity (Dominković, Bačeković, Pedersen & Krajačić, 2018). As a result, the transformation of the flight regulatory system and a greater number of proposals on specific routes can improve operational performance and expand the customer base. Another example that many airports face is the inability to follow green operating principles (Lee, Tsai, Yang & Lin, 2018). However, such an omission, at the same time, maybe a chance to assess the existing gaps and implement the necessary measures to support environmentally-friendly activities. Thus, the transition from a risk to opportunity is accessible through the adequate assessment and timely implementation of appropriate mitigation or optimization practices.

The transition from a Strategic Opportunity into a Threat

The transition from a threat to an opportunity can also take place in the opposite direction, which requires airport managers to pay increased attention to innovations and optimization practices. For instance, the introduction of automatic monitoring and dispatching tools that are relevant today may cause uncontrolled errors due to technical equipment malfunction (Billings, 2018; Clothier, Williams & Fulton, 2015). Failures in navigation, unintended changes in the flight schedule and other negative consequences of such failures can not only disrupt the operation of airports but also entail a serious threat to passenger security. Continuous monitoring is a mandatory aspect of using unmanned control systems as an opportunity to introduce innovations in the operation process. Otherwise, the risk of safety culture breaches increases, and the consequences of ineffective control may be dangerous for both airport managers and the aviation industry as a whole due to subsequent restrictions and constraints.

Any operational failure is the result of certain omissions or equipment errors, and even if a potentially effective strategic opportunity is realized, it can transform into a threat due to inadequate implementation. In academic literature, the main types of gaps are cited, which relate to the loss of control, technical malfunctions and other problems caused by either human or other factors (Clothier, Williams & Hayhurst, 2018). However, in addition to these reasons, initially, positive airport management practices can lead to negative results due to the lack of regular control. For instance, staff fatigue is the outcome of an inadequate work schedule or HRM practice, which were initially productive but changed under the influence of various optimization solutions (Liu, Gardi, Ramasamy, Lim & Sabatini, 2016). Therefore, the competent addressing of risks through the assessment of threats and opportunities is a valuable practice of control over airports’ sustainable work.

Strategic Opportunities and Threats Facing Airports and the Ways to Address Them

Over the next decade and globally, airports may face both opportunities and threats caused by various changes in social, economic and other fields. As an example, alternative forms of transport, in particular, the railway, can develop, which is a risk and is fraught with losses for airports. For instance, in China, the length of all railways is more than half of the total number of world railways, which, along with innovative high-speed trains, creates potential challenges for air carriers (Zhang, Wan & Yang, 2019). The threat of replacement may be traced in the behavior of passengers and their preferences regarding comfort and costs of movement, which are usually lower on the railway and on short routes (Liu, Wan, Ha, Yoshida & Zhang, 2019; Shiwakoti, Wang, Jiang & Wang, 2020).

To address this threat competently, airport representatives should implement appropriate competitive and pricing strategies and engage passengers through advantageous offers. For instance, in academic literature, there are opinions about the value of bonus programs for regular customers and the introduction of preferential payment systems (D’Alfonso, Jiang & Bracaglia, 2016; Wang, Xia & Zhang, 2017). These measures can help prevent losses for airports caused by the activation of alternative forms of transport.

Another threat that airports may face in the near future is a growing concern about climate change and a negative environmental impact due to the use of fossil fuels. The concentration of harmful emissions into the atmosphere caused by the accumulation of aircraft affects various weather conditions, including precipitation, which leads to problems in other sectors, for instance, agriculture (Herath, Sarukkalige & Nguyen, 2016). In addition, the infrastructure of major global airports has a significant impact on the surrounding regions, thereby creating health risks for the population (Coffel & Horton, 2015; Mosvold Larsen, 2015). To address these challenges, a corporate social responsibility strategy can be a potentially effective measure. One of the steps is to allocate funds to combat the effects of climate change and participate in a program to search for alternative fuel sources (Güreş, Yılmaz, Arslan, Durmuşçelebi & Yüksel, 2017). These items of expenditure may be included in the official budget of airports, which can be evidence of the interest of these facilities in mitigating the outcomes of their operation (Monsalud, Ho & Rakas, 2015). As a result, the threat may be addressed as an important airport concern.

As an essential opportunity that airports can successfully address, one should note increasing population wealth. The example of the JFK International Airport proves that citizens’ standard of living in this region is growing, and people are willing to spend more on air travel (Bloom, 2015). As a result, the airports of developed cities face the task of allocating resources adequately in order to offer passengers convenient and in-demand services, thereby earning more and realizing funds for modernization (Stephens, 2019). One of the strategies that may allow using this opportunity is an appropriate pricing program that involves separating services in accordance with the income of citizens. The most popular routes can attract various commercial offers, while for unpopular destinations, passengers can choose the best value for money travel (Jarach, 2017). Utilizing the possibility of client wealth makes it possible to overcome the competitive barrier and gain leadership positions through the strategy of suitable services provided (Isa, Hamid & Leong, 2018). All of these threats and opportunities are really over the next decade and require addressing by airport managerial boards.

Conclusion

Strategic threats and opportunities that airports may face globally over the next decade depend largely on specific social, economic and other trends. The very concept of a threat and opportunity allows for shifts and transitions due to the dynamic operating environment. These factors are part of the widespread SWOT analysis that is often applied to assess the competitive barrier and the methods of struggle for leadership in a particular industry. Based on the review of these aspects of work, relevant threats and opportunities are examined based on specific airports. The assessment allows identifying the characteristic challenges and optimization steps and arguing that, in addition to the standard nuances of work, the upcoming social and economic changes require addressing. In particular, the issues of alternative transport, environmental protection and an increase in population wealth are defined as factors stimulating the adoption of productive strategic solutions for airports to avoid risks and capitalize on profits.

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