Professional Certification: A Critical Factor for Airline Safety & Success

Quality Practices for the Southeast Asian Airlines Operations LSP AVIASI INDONESIA Professional Aviation Board of Certification

Organisational Quality practices:a key determinant of commercial air carriers success

An evaluation framework for air operators performance by

Toto Hardiyanto Subagyototohardiyanto@hotmail.comCell: 0812 103 5458Jakarta, February 2012

ObjectivesAn introduction to a model of quality management for airlines operations to be developed as a framework for air transport performance evaluation.

The Importance Of Air Transportation

(Dempsey, P. S. and Gesell, L. E. Airline Management: Strategies for the 21st Century. Coast Aire Publications, 1997)Integrating disparate economies & culturesStimulating social and cultural cross-fertilisationEconomic growth and diversity in an increasingly interdependent global environmentTrade and tourism

Pihak-pihak yang berkepentingan dalam penyelenggaraan Transportasi UdaraTransportasi UdaraEfektif & EfisienPemerintah/pengaturPengguna JasaPenyedia Jasa

Important Quality Factors In Air Travel

(SOURCE: T.J. Kloppenborg, K.N. Gourdin. Identifying Service Gaps in Commercial Air Travel. Transportation Journal, Fall 1991)PASSENGERSComfortable seatEnough knee and leg roomDelayed flight status promptly providedAirline assumes responsibility for delayed passengersPreassigned seatingNon-stop flightsGOVERNMENTNeeds more airportsAir traffic control system is OKOverall satisfied with air transport systemAIRLINESDepart gate on timeCourteous/friendly Cabin crewBeverage service on short flightsPrompt meal/beverage serviceAirlines care about customersOverbooking is ok(C) PASSENGER GOVERNMENT:Lower fares for non-peak travel(A) PASSENGER AIRLINE:Convenient check-inConvenient connectionOn-board comfort during delaysTake-off on timeBeverage service on long flightsAircraft clean insidePrompt baggage deliveryCareful baggage handlingLost bags procedureAirline complaint mechanism

(B) AIRLINE GOVERNMENT:Airlines must earn a profitSafety announcements made(D) PASSENGER AIRLINES GOVERNMENT:Convenient departure timeConvenient arrival timePre-flight security screeningMeaningful flight information promptly displayedABCD

Quality of Air Transportation

(Rosander, A. C. Application of Quality Control in the Service Industries. ASQC Quality Press, 1985)

Quality of planning

Quality of operations

Quality of air transportation

Flight safety

On-time performance

Quality of service performed

Sociality; public hazards

Protection; number of departures operated over noise level limit

Quality of route structure

Quality of aircraft

Quality of flight frequency and schedules

Quality of service planning

The Airline Industry

(Wells, A. T. Air Transportation 4th ed. Wadsworth, 1999.)An industry can be defined as a number of firms that produce similar goods and services and therefore are in competition with one another.

The airline industry is a segment or part of a broader air transportation industry.

The airline industry consists of a vast network of routes that connect cities throughout the country, and indeed, the world. Over this network, a large number of airlines carry passengers and cargo on scheduled service.

The Unique Characteristics of Commercial Aircraft Flying (Dempsey, P. S. and Gesell, L. E. Airline Management: Strategies for the 21st Century. Coast Aire Publications, 1997.)The airline industry is a service industry which is capital intensive, labour intensive, and fuel intensive.Because it confines people in canisters of aluminium and steel, propelling them through the skies at speeds of hundreds of miles an hour at elevations of several miles above the sea level, it is potentially a highly dangerous industry. For that reason, it is highly regulated, and requires highly skilled and therefore, adequately trained and paid employees.

Airline CertificationFitness Determinations. Fitness of the applicant refers to the carriers size, financial resources, flight equipment, flight equipment, strategy for conducting the proposed operations, and past conformity to various legal requirements.

Public Convenience and Necessity Determinations. For carriers desiring to provide foreign air service, a determination of public convenience and necessity is required in addition to the fitness finding.

From an Airline StandpointThe desire to meet every individual passengers needs must be weighed against profitability.

A nonstop flight costs less to operate from point A to point Z than one on the same type equipment that makes intermediate stops.

If sufficient traffic demand is not available to justify nonstop operation, through service means that each passenger is handled only once and therefore costs are lower than they are on connecting service.

The Passengers ViewpointThe goal is safe, speedy, dependable, and comfortable service.

Safety is the overriding and controlling factor in all airline operations.

A nonstop flight from A to Z, or if that service is not available at a convenient time, a through flight, or if the journey can be speeded, a connecting flight with adequate connecting time to ensure dependability and with fast equipment and as few stops as possible.

Some holes dueto active failures

Other holes due tolatent conditions

Successive layers of defences, barriers, & safeguardsHazardsLossesThe Swiss Cheese Model of Accident Causation

SOURCE: J. Booth-Bourdeau. Safety Management Systems and Human Error Management. 18th Airbus Human Factors Symposium, New York City, NY, October 29th, 2003.

Organisational Process ModelProcessing the Organisation Resources (take into consideration the CSFs of the business)Business PerformancePerformance ObjectivesCurrent PerformanceFactors for Assessment (Critical Success Factors) Business Environment

QUALITY MANAGEMENT PRACTICES for THE AIR OPERATORS in INDONESIA

Quality Practices ~ Firms PerformanceVarious studies demonstrated that there is a direct relationship between quality management practices and a firms performance, which eventually will improve profitability. Sources: George and Weimerskirch, 1994; U.S GAO, 1991; Jones, 1998; Bank, 2000; Forza and Filippini, 1997; Adam, 1994; Adam et al, 1997; Buzzell and Gale, 1987; Hakes, 1996; Easton and Jarrell, 1998.

Profit through Quality

QualityImprovementIncreased PROFIT through Quality improvement absorbs less incremental operating cost than through organising more Sales.

Profit through Quality (cont)CustomerSatisfactionQuality ImprovementSalesCUSTOMER SATISFACTION through Qualityimprovement carries its own acceleration resultingin increased sales at minimum incremental cost.

IMPROVED PROFITABILITYImproved Asset UtilisationImproved MarginLower CostsGreater ProductivityReduced WasteRevenue GrowthGreater ValueIncreased Market Share QUALITY Conformance Perceived

Quality Definition. . . quality of a product is the ability of the product to satisfy the requirements of the customer as well as the industrys standard.

the definition of quality should not be associated with product quality alone but also , more importantly, with a process in which the quality of the product can only be ensured by the process.

Quality Management . . . managing a process of delivering quality to satisfy the requirements of customer and industry standards, in which particular management techniques and organisation commitment through employees involvement are necessary.

The Foundation of Commercial Air Service. . . is an airlines promise to get people and goods to their destination, based on the schedule that it publishes. Key Areas of Management: Safety, Punctuality, and Efficient of Operations

The Need for Quality Management . . . there is a need for the developing airlines of Southeast Asia to improve their ability to deliver, consistently, a high quality of service, so, that customer requirement and the industrys standards will always be met.

Quality Management ~ Airlines Performance. . . that improving the quality of an organisations products and services is fundamental to business success.

. . . this study focus on quality management practices as a means of improving the performance of the airlines of Southeast Asia.

Consistent quality . . . will improve the ability to achieve a better operating ratio, which will ensure operating profit in the end.

Airlines Major Line FunctionsMarketing, sales and services make decisions about marketing policy, so as to define the market sector and demand, and develop the product specification, with reference to the ability of the production systems.

Engineering and maintenance keep the companys equipment in condition to provide safe and saleable air transportation.

Flight and ground operations are responsible for developing flight operation policies, procedures, and techniques that have as their purpose the safe, efficient, and progressive operation of aircraft.

A Generic Model of Core Processes and Systems

(Miller, A., Strategic Management, McGraw-Hill, 2001)Marketing & Services

Market ResearchProduct DesignPromotionSalesCustomer RelationGround ServicesPurpose:Valuable product/serviceEngineering & Maintenance

Line MaintenanceOverhaulCabin Interior

Purpose:Safe and Salable air transportation

Flight/GroundOperations

Crew ManagementFlight OperationsGround OperationsIn-Flight ServicesFlight ManagementPurpose: Safe, Efficient, and Progressive operation of aircraft

The Focus Area of the Study ~ The Airlines Operations FunctionThis function is a core activity of an airlines operational process.

It can make a contribution to the success or failure of delivering quality in the product and direct service to the customer. The operations function flight and ground operations and aircraft line maintenance.

The Airlines Operations Functions DefinitionThe operations function to provide a safe, punctual, and efficient transportation of passengers on the ground and in the air:

Aircraft routing and line maintenance Crew scheduling and monitoring Aircraft loading and ground services Catering upliftPassenger on the ground and in-flight handling Flight planning and documentationFlight operations planning and control

Sub-titleDeveloping a Model of Quality Management Practices for the Airlines Operations Function

The Research covers Airlines in two regionsSuccessful Airlines of Western Europe to be used as a yard stick against the Southeast Asian.

Developing Airlines of Southeast Asia a model of quality management practices will be required to ensure effective and efficient process of operations.

Aim of The Research Identify the critical success factors of quality management practices in the Operations function of the airlines.

Analyse the differences in quality management practices between the successful and the developing airlines.

Highlight the variables of organisational context which cause differences in the practices between these two groups of airlines.

Develop a model of quality management practices for the Operations function in the developing Airlines of Southeast Asia.

Research ApproachA Preliminary StudyDevelopment of The Research StructureCollection of InformationDevelopment of A ModelThe Research AimA study to define background, area, aims, benefit, and how the research should be approached.A business process analysis and modelling methodology was employed as the research structure.Desk and Survey Research were adopted to collect data and information.Following the research structure, the findings were processed to generate a model.

Research StructureDevelop a Model of Quality Management Practices in Operations function for the developing airlines of Southeast Asia

The Need for a ModelDesk ResearchSurvey ResearchQuality Management Practices DefinitionAirlines Operations Functions DefinitionQuestionnaires PlanSemi-structured Interview PlanA Model of Quality Management

Collection of InformationDesk ResearchQuality Management Studies; - covering manufacture and services companies. Finding out similar features in practising Quality Management. Airlines Case Studies; - covering airlines business management studies. Developing an initial propose model and instrument for Survey Research.

Survey ResearchA Questionnaires; - 7 factors with 58 question items were processed and giving a result of 12 factors (Critical Success Factors) with 48 items. Semi-structured Interviews; - conducted for airlines representing two groups of airlines involved. This validated the differences found from the result of questionnaires.

The Elements of Operations Function Organisation

Operatives or persons who handle the various types of airline equipment, facilities, passengers and goods.

Airline equipment and facilities aircraft, ground support equipment, flight loading/unloading equipment, and airport terminal and ramp facilities related to the requirements of the flight concerned.

The passengers and goods served and accommodated in interaction with the operatives, with or without using the equipment and facilities.

The Elements of Operations Function OrganizationQuality of process is depend on how these elements interact each others, effectively and efficiently, within organization to ensure quality of product/service.

The 12 Critical Success factors and its 3 Organisational Context 12 Critical Success Factors:Technology Usage & ManagementManagement InvolvementTech. Usage OrientationReward Systems Team BuildingBenchmarkingInterdepartmental InteractionCustomer Oriented MotivationProcess Improvement TechniqueQuality Demand AwarenessManager-Staff CommunicationImprovement Programme Evaluation.Customer Feedback HandlingMembers Participation 3 Organisational Context:Management KnowledgePast Quality performanceExternal Quality Demand

3 ORG.CONTEXTPast PerformanceQuality DemandKnowledgeQuality Management Practices ModelIndustrys StandardCustomers RequirementOrganisation PerformanceSatisfaction LevelIndustrys StandardCustomers Requirement12 Critical Success Factors:

1. Technology Usage & Management2. Reward Systems 3. Team Building4. Benchmarking5. Interdepartmental Interaction6. Customer Oriented Motivation7. Process Improvement Technique8. Quality Demand Awareness9. Manager-Staff Communication10. Improvement Prog. Evaluation.11. Customer Feedback Handling12. Members ParticipationG A P

1a. Technology Usage and Management Management InvolvementManagement involvement in practising quality management has a significant affect on the technology usage orientation of the organisation members, benchmarking exercises, team building, interaction between departments, evaluation of the improvement programme, and rewards given to the member.

1a. Technology Usage and Management Management InvolvementCustomer representatives are used to review the operationsTop/senior management encourage the use of new working methodCustomer requirement surveys are being carried outBenchmarking result is used to improve efficiencyTechnology-based equipment is usedTop/senior management accept to train members for future benefit

1b. Technology Usage and Management Technology Usage OrientationTechnology usage orientation has a strong direct connection with the quality of flight as an output of the Operations function. Orientation of the member toward the use of advanced technology will create a better interaction between the departments and use of process improvement technique, higher customer demand awareness, and a better use of improvement programme evaluation result.

1b. Technology Usage and Management Technology Usage OrientationStatistical or common methods are used to improve operations chainStatistical or common methods are used to solve daily problemAwareness that technology is changing rapidlyAwareness that new services have been developed because of technologyAnyone can call anyone from other departments with ease

2. Reward Systems A reward system has an important role in maintaining the members motivation, and it will only work if the management of the organisation is getting involved in setting up this system. It has direct correlation with team building within the organisation, orientation of the member to customer demand, motivation to use common working technique, and motivation to evaluate the improvement programme.

2. Reward Systems Departmental performance in assessment criteria for managersDepartmental performance in assessment criteria for staffTeam-based assessment criteria for managersTeam-based assessment criteria for staffManagers give reward to encourage team-workingAwareness that new demands are comingTop/senior management give rewards to encourage team-working

3. Team BuildingTeam building spirit, which appears in team work, either within department or between departments, will become a vehicle to make benchmarking exercises success, programme evaluation effectiveness, improvement of quality demand awareness, and efficiency of customer feed back handling.

3. Team BuildingApprovement for staff to get involve in departmental teamsApprovement for staff to get involve in cross-functional teamsCustomer requirements are translated to operationsTop/senior managements' time is spent in communicating qualityAgreement to solve the problem, managers and staff working together

4. BenchmarkingBenchmarking should be used in improvement programme evaluation and in handling the customer feedback. The Benchmarking exercise is influenced by teamwork, interaction between departments, and technique used in the exercise.

4. BenchmarkingBenchmark the efficiency of operations against a competitorBenchmark the operations efficiency against the best performerUse of Benchmarking results in improving working processesAvailability of Information on Benchmarking resultsTop/senior management involvement in setting objectives

5. Interdepartmental InteractionMotivation of the organisations members in improving interaction amongst them within and with other departments will determine the easiness of setting up objectives and flow of work in the Operations function process. Interdepartmental conflict and connectedness appear to influence the level of quality achieved in the Operations function.

5. Interdepartmental InteractionTalking to anyone is easy, regardless of their positionThe departments' objectives are in harmonyTop/senior management involve in operations activities improvement

6. Customer Oriented MotivationCustomer oriented motivation is very much maintained or influenced by the existence of a reward system within the organisation. It is also affected by direct involvement from top/senior management.

6. Customer Oriented MotivationCustomer satisfaction influence assessment for managersCustomer satisfaction influence assessment for staff

7. Process Improvement TechniqueStrong technology orientation will stimulate better use of technique of improvement. In order to meet the quality demand at the end of the process, follow up activity to the finished project has to be conducted accordingly.

7. Process Improvement TechniqueNew project is conducted to prevent problems re-occurringMembers use statistical or common methodsFollow up project is conducted

8. Quality Demand AwarenessQuality demand awareness will be strengthened by involvement from management, orientation toward advanced technology usage, reward system, and mutually influenced with team building.

8. Quality Demand AwarenessAware that customer tend to look for new servicesManagers participation in group activitiesAware that customer preferences are always changing

9. Manager-Staff CommunicationManagement-staff communication correlates with the success of programme evaluation and level of participation of the organisation member.

9. Manager-Staff CommunicationManagers' time spent in communicating qualityManagers make periodic evaluation on quality management practices

10. Improvement Programme EvaluationImproved effectiveness and efficiency in Operations function process can not be achieved by only a project or at once, but instead, it will need a continuous effort along the process. Member accessibility between each department and organisation performance analysis will be the major practises for success in this factor.

10. Improvement Programme EvaluationMembers are accessible to others from different organisationsHow often the quality of operations is analysedTop/senior management make periodic quality evaluation

11. Customer Feedback HandlingBecause the customer is the final arbiter, the customers feedback should be represented throughout all phases of the Operations function process. Customer feedback handling correlates with benchmarking.

11. Customer Feedback HandlingImportancy of customer visit

12. Employee ParticipationMembers participation is a factor that can create the organisations energy to sustain an improvement effort within the organisation. This factor is influenced by the existence of a reward system and communication between the management and the staff.

12. Employee ParticipationA percentage of staff in departmental teamsA percentage of staff in cross-functional teamsA number of department levels conducting working-team activity

The Variables of Organisational ContextManagement Knowledge The level of knowledge of the management on quality management, the business, and the organisation situation will take many forms of support including setting objectives in the area of safety, punctuality and efficiency, rewarding staff on the basis of quality-related performance, and making resources available for the quality improvement initiative.

The Variables of Organisational ContextManagement Knowledge The level of knowledge on quality management, the business, and the organisation situation, which will determine commitment of management and staff toward quality improvement initiative.

The Variables of Organisational Context (cont)Past Quality Performance The information on Operations function past performance and the objective that should be achieved is necessary to define the way in continuing quality management practices.

The Variables of Organisational ContextPast Quality Performance The information on Operations function past performance and the objective that should be achieved is necessary to define the way in continuing quality management practices.

The Variables of Organisational Context (cont)External Quality Demand This will affect the selection of critical success factors of quality management practices in the Operations function that has to be put into priority or focus of improvement.

The Variables of Organisational ContextExternal Quality Demand This will affect the selection of critical success factors of quality management practices in the Operations function that has to be put into priority or focus of improvement.

3 ORG.CONTEXTPast PerformanceQuality DemandKnowledgeQuality Management Practices ModelIndustrys StandardCustomers RequirementOrganisation PerformanceSatisfaction LevelIndustrys StandardCustomers Requirement12 Critical Success Factors:

1. Technology Usage & Management2. Reward Systems 3. Team Building4. Benchmarking5. Interdepartmental Interaction6. Customer Oriented Motivation7. Process Improvement Technique8. Quality Demand Awareness9. Manager-Staff Communication10. Improvement Prog. Evaluation.11. Customer Feedback Handling12. Members ParticipationG A P

Application to the IndonesianTechnology Usage & Management Management Involvement;The manager should involve in conducting customer expectation surveys and invite the customer to observe the Operations function in certain daily work activities. They should give chances and facilities for the members to acquire more knowledge and improve their skills on process quality improvement techniques.

Application to the IndonesianTechnology Usage & Management Technology Usage Orientation;Use common method/techniques in identifying the weak link in the Operations chain of activities, and to prevent solved-problems from re-occurring for further process improvement. It will create a working environment that stimulates the members open to information on their airlines product/service, competitors performance, technology development, and market demand.

Application to the IndonesianInterdepartmental Interaction;Allow the members to communicate freely with different functions in order to perform their work or other work-related activity.

Improvement Programme Evaluation;Conduct a periodic meeting to evaluate past problems and action that has been performed on them.

Application to the IndonesianMembers Participation;Organise and encourage the entire members to get involve in setting up the organisation objectives within their own level and scope of work. Involve the entire organisations members in process improvement teams, within their own function organisation, as well as cross-functions.

3 ORG.CONTEXTPast PerformanceQuality DemandKnowledgeQuality Management Practices Model for The Indonesian AirlinesIndustrys StandardCustomers RequirementOrganisation PerformanceSatisfaction LevelIndustrys StandardCustomers Requirement12 Critical Success Factors:

1. Technology Usage & Management2. Reward Systems 3. Team Building4. Benchmarking5. Interdepartmental Interaction6. Customer Oriented Motivation7. Process Improvement Technique8. Quality Demand Awareness9. Manager-Staff Communication10. Improvement Prog. Evaluation.11. Customer Feedback Handling12. Members ParticipationG A P

Thank You

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