Change Readiness Review Airline Industry in Hong Kong

Question: Describe about the Change Readiness Review for Airline Industry in Hong Kong. Answer: Section 1: Industry: Airline Identifies and justifies the focus of the review The airline industry in Hong Kong is connected with urban centres in Asia as well as half of the population of the world with 5 hours of flight distance. Currently, more than 100 airlines are operated about 1,100 flights daily, links the international airport of Hong Kong to about 190 destinations (Song, van der Veen and Chen 2012). Hong Kong International Airport is the third busiest international passenger airport in the world. In the year 2015, Hong Kong had signed air services agreements with almost 68 aviation partners. The airline industries of Hong Kong is divided into both cargoes as well as passenger sectors. Future back approach in airline industry of Hong Kong The airline industry of Hong Kong is estimated to grow approximately 5% annually in the next five years (Chen and Hu 2013). The air traffic to as well as from the Mainland will reach 2.1 million trips by the year 2030. The cargo traffic will reach 44 million tonnes. In the next 3-5 years, the volume of passengers, aircraft movements as well as cargo will become doubled (Lo, Wan and Zhang 2015). As the airline industries of Hong Kong handles maximum capacity, therefore they will require expanding their airport in order to meet its long-term demand of their customers. The airline industry should also focus on reducing the cost lies in the efficiency of fuels (Tsui and Fung 2016). The airline industries of Hong Kong have sufficient funds to modernize their fleet in order to incorporate fuel-efficient. As planes are expensive, therefore this approach should require implementing in line with long-term carrier plans for configuration of their network. There should be a programmatic expansi on of routes over a period of years. Chart 1: Air Traffic Movements/year (Actual Statistics and Estimates) (Source: Lo, Wan and Zhang 2015, pp-461) Identification of significant trends and impact on nature of change landscape The airline industry of Hong Kong is being hampered by profit margins, forcing carriers in order to focus on decrease of cost as well as revenue growth through enhanced interactions with the customers (Ha et al. 2013). The airline industry should focus on top-line growth due to limited profitability is based on revenue gains. It should increase the productivity to increase the profit margins. The commercial airlines will navigate several significant trends that will influence the performance of carrier in the coming next five years (Tsui et al. 2014). The trends are: The airline industry will require building social pace in order to create brand equity. An improvement of online and offline services to increase revenue for airlines. Increased focus on regulatory and standardization of routes (Tsui and Fung 2016). The customers should leverage mobile for controlling and information. Complete self-service airport (Xiao et al. 2016). The impacts on the nature of change landscape in the airline industry of Hong Kong as follows: Increase the expectations of customers: The customers should see significant improvements in their experiences with services they are given. As the disaffection of the customers is challenging for the carriers as upgrade the aircraft is an expensive way to differentiate them (Wong, Lau and Chan 2013). The enhancement of the soft product such as welcoming of the customer experiences across the features of air travel such as from reservation to arrive is cheaper, but it is hard to implement. Therefore, the change in the airline industry should make a cultural shift in the organization. Reduction of cost and improve operational efficiency: The change management in the airline industries of Hong Kong should result into strict cost controls. The industry lies to decrease the cost in fuel efficiency such as jet fuels account for 40-55% of operating expenses. The reduction of cost is achieved through enhancement of the organizational structure and operating model (Sze et al. 2015). Section 2: Academic Literature Critically analyze and evaluate trends identified The following are the different trends in the airline industry of Hong Kong such as: Build social pace to create brand equity: The airline industry of Hong Kong should take off on social flights to engage a customer in order to build strong relationships with them. Among the recent innovative airline, social media campaigns, as well as initiatives, help to engage customers with unique concepts (Grant 2016). The airline industry should use social media applications so that the customers are encouraged to share their travel wish list as well as the itinerary. Using the social media, it makes a customer relationship management so that a large resources rebuild to give a response to customer queries, posts, tweets, and complaints. It makes strategic sense for the airlines to make partner with providers (De Neufville et al. 2013). It helps to provide a resource pool of social media experts as well as technology platforms to improve brand equity on the social media. An improvement of online and offline services to increase revenue for airlines: The online medium such as an internet, which is symbolized by the online travel agencies in the airline industry, is a influential revenue generator for the airlines. As per the market research on the data, 75% of the air tickets are bought online (Cameron and Green 2015). Automation of airline business processes and e-commerce such as web check-in should enhance the convenience of air travel. The offline channel will persist to be a important touch point for the airlines as well as passengers. Increased focus on regulatory and standardization of routes: Regulatory as well as directives on standardization will always continue to dominate the airline industry now as well as in the future (Quinn et al. 2012). Most of the regulations are based on finance, environment as well as consumer rights. While the airline regulations increase the safety of the passengers as well as improve the business sustainability, compliance adds to the total operational cost (Herrmann and Nadkarni 2014). Since new regulations are given to the airline industry of Hong Kong, therefore they must engage in a compliance program that should optimize the business operations and transform it. Advantage of Mobile for controlling and information: The customers are already leveraged mobiles. The airline mobile platforms should be updated and maintained so that it offers trip searchers as well as booking, offers travel purchases and address travel disruptions with alternative travel arrangements (Olson and Simerson 2015). Bring Your Own Device (BYOD) in-flight entertainment as well as the onboard services trend will persist to grow, as suppliers should expand this platform in next three years. Complete self-service airport: The customers those are frequent flyer should use at least a part of the self-service (Johnson 2016). The self-services system should be u-Self check-in common use kiosks allow the passengers to check in. The biometric u-Immigration system should allow the passengers with e-passports in order to go into departures automatically with facial recognition (Song, van der Veen and Chen 2012). Even biometric u-Boarding gate, boarding pass free u-departure gate for machine-readable passports provides customized airport information to the travelers. Leadership and management skills require implementing sustainable organization change and development The leaders have motivated their employees by creating a vision to meet with the change management of the airline industry. They can establish an organizational culture, which should be based on assumptions, values as well as beliefs (Lo, Wan and Zhang 2015). The employees should have appreciation and concern for their customers thus producing a unity emphasizing membership as well as customer engagement. The leader and management should develop a process to inspire people for changing (Tsui and Fung 2016). Ethics should be central to leadership, and it helps to establish as well as reinforce organizational values. In order to meet with organizational change trends, some of the steps are required in airline industries such as: The leader should create a vision that is challenging and desirable. The leader should communicate the vision for making future changes (Booth 2015). The leader should influence as well as inspire the employees to become a part of a culture based on morals. They should engage the employees in order to increase their airline services through empowerment (Chen and Hu 2013). They should also develop a value added leadership development program, which is based on the philosophy "hire for attitude as well as train for skill (Xiao et al. 2016). The leadership stability is found at the core of the worlds best airlines. Successful airlines CEO successions be inclined to arise when basic conditions are in position at the management interface (Wong, Lau and Chan 2013). Firstly, the succession planning is viewed as the original as well as ongoing board responsibility tied to the expansion of management. Well-managed airline industries of Hong Kong are working the CEO succession process for a long period. Even the tech savvy leaders rule the airline industry (Jenatabadi 2013). As the airline industry uses many new and modern systems for doing self-customers work, therefore the CEO and the leaders should also have knowledge of new technological uses. Even the tech-savvy CEO should have an easier time to earn the trust of the technical group (Robinson et al. 2016). The operations research analyst of the airline industry takes care of the business issues, and they create a model in order to help identify the optimal overbooking leve ls for the aircraft. The leaders should motivate their employees to work so that it will help the airline industry to increase both productivities as well as the profitability of the Hong Kong airline business processes (Chen and Chen 2012). Section 3: Framework Framework to summarize the key management and leadership skills Within the airline industry, there is a need for sustainable change within the business organizations of Hong Kong. It is due to some factors ranging from the structural, technological to commercial. Change management, leadership, management, and soft skills are distributed through the airline industry (Belobaba, Odoni and Barnhart 2015). As the change is imposed on the airline industry from some sources, therefore there is a requirement of change management skills in the airline sector is increasing. The main objective of this framework based on key management and leadership skills is developing structure in order to manage retention of skills concerning organizational processes to manage change in air transport system (McAfee et al. 2012). Different stakeholders in the operational system such as airports and maintenance companies will change the business operational system in order to deliver better services (Hackman and Johnson 2013). The below table shows the areas of operations and frameworks the leaders are required to change for successfully implementing the change management framework in the business operations of the airline industry. Area Sub-divisions Justification Human factors training 1. Technical training 2. Safety training 3. Online learning community Training to the employees is required, and it is focused on the operational layer in the airline sector with an aim to reduce error and enhance the safety of the customers (Herrmann and Nadkarni, 2014). Development of system 1. Technical equipment 2. Additional of modern airline systems The system is developed in order to support a deployment of an integrated change management capability. Supporting the collaborative decision making 1. Development of system 2. Pilot implementation 3. Process map of turn-around process (Song, van der Veen and Chen 2012). The leaders take different types of decisions and management team in various areas so that it results in the successful development of airline system and pilot implementation. Link risk and performance across the flight ops 1. Development of web applications to capture daily work in an electronic format (Chen and Chen 2012). 2. Development of safety system changes framework Within the airline industry, there are various risks that the leaders should take a step to mitigate them (Tsui and Fung 2016). It improves the performance of the web applications and develops the safety framework so that the travelers should get the safe journey. Assess and facilitate change 1. Design of change management tool 2. Development of prototype interfaces Due to a use of a new technological system, the workers and employees working in the airline sector require making changes in their business processes (Tsui et al. 2014). Revenue management 1. Understanding the revenue management framework (Wong, Lau and Chan 2013). 2. Calculation of the return on investment The airline industry should control their revenue by seeking to optimize short-term profitability throughout dynamic pricing. Communication skills 1. Decision making 2. Safety of the travelers 3. Written and oral communication (Johnson 2016). An effective communication skill among the leaders is a basic requirement in the airline operational contexts, and it is a requisite to safety (Hackman and Johnson 2013). The written communication consists of flight manuals, planning of flights, operational bulletins, and checklists. Oral communication is required for removing the issues within the industry (Grant 2016). Management skills 1. Behavioral and controllable 2. Interrelated and overlapping The managers and leaders should have identifiable sets of actions that they can perform to get certain outcomes. The performance of the behaviors should be kept control (Belobaba, Odoni and Barnhart 2015). In order to motivate others to work, the leaders should have supportive, empowerment as well as self-awareness skills to overlap and support others. Section 4: Strength and areas of development Critically evaluate the organizational change and development as a leader and manager in airline industry An adaptive work environment is required leader and manager in order to control protection, conflict as well as policy and norms in the airline transport system (Belobaba, Odoni and Barnhart 2015). The leaders and managers should operate co-creatively; therefore, they require giving priority to the requirements of the customers. McAfee et al. (2012) stated that too many leaders should make a mistake of thinking that they can change the behavior of individuals by making a change in the culture. In the airline industry, a cross-functional team could able to develop as well as implement an improvement plan so that they can improve motivation as well as promote an effective communication skill by expanding the scope of a job of workers and their involvement in airline planning (Herrmann and Nadkarni 2014). The airports serve an access point to the private air transportation industry. Thus it provides service to the public. Even the airline industry should have no control over the type of equipment and workers to maintain control over the business operations. The managers and leaders are facing rapid change in the airline industry. Globalization has increased the opportunities for growth as well as revenue (Johnson 2016). The main systematic way to expand in the airline market is to control the cost as well as revenue. Scrutiny of the stakeholders has also increased, as some of the leaders should take illegal actions in the companies (Lo, Wan and Zhang 2015). The capability to manage while continuing in order to meet with stakeholders need is required skill by them. Sometimes, merger among the airline industries in Hong Kong will result in business opportunities as well as growth prospects (Tsui and Fung 2016). The following are some of the areas of change and development by leaders and managers: Air service development program: Both managers as well as leaders to make decisions develop the air service development program (Tsui et al. 2014). It is required to understand how they while designing of the air service development program takes the air service decisions. Financial area of development: Financial incentives are offered to the air carriers for their new services. When they are provided with new services in the airline industry, there is a requirement of a host of costs associated with the establishment of the new ground station such as training of new workers (Xiao et al. 2016). The airline industry is charged for use of property such as fees of landing, terminal rental fees, and others. The start-up cost for the air carrier is $200,000. Improvement in data analytics: There is huge pile of data, which contains crucial information about the passenger's profiles, as well as preferences that are leveraged by the airline industry in order to develop the offerings of product and services (Wong, Lau and Chan 2013). The leader should predict the needs of the customers as well as their preferences by analyzing the historical data of the customers. The sales and marketing are achieved with the help of the analytics of the data as well as information (Olson and Simerson 2015). With an capability to remove information from a enormous pile of data, it helps the managers and leaders to take business related decisions. Analytics is a rising planned enabler for the airline business industry. Changing course in the revenue generator: Rise in the price of fuel, as well as an increase in competitions, are biting the revenue generator potential to the global airline business. Therefore, the airline industry explores new ways to change the course of the revenue generator. Some of the strategies that are taken by both managers as well as leaders are selling ancillary services across the value chain (Song, van der Veen and Chen 2012). The ancillary route is considered as an important revenue generator for the airline industry. The services consist of paying for checking baggage, booking for seats, connectivity of Wi-Fi (Tsui and Fung 2016). The leaders are taking revenue integrity program so that they can cut across various processes such as ticketing processes, e-ticketing as well as customer relationship management. Crew resource management: It is used to set the training procedures for reducing human errors. It also improves over air safety; customer relationship management focuses on interpersonal communication, decision-making as well as leadership (Ha et al. 2013). Switch to digital: No technological development gives impact on the transportation of air than an adoption of electronic formats for regulatory as well as tracking documents (De Neufville et al. 2013). The switch to the digital documentation has made the business operations of the airline industry faster as well as flexible. The managers, as well as leaders, are racing to keep the airline industry with latest technological development (Wong, Lau and Chan 2013). Technology has evolved rapidly, and it brings various changes within the airline industry. 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