Research Article: 2021 Vol: 24 Issue: 1S
Worakamol Wisetsri, King Mongkut’s University of Technology (KMUTNB)
Aviation, Global Slowdown, Covid-19, Impact Recovery
COVID-19 has created a pandemic situation all over the world. Main sectors like construction, aviation, retail have been greatly affected by the wave of COVID-19. The study is mainly emphasized on the aviation industry and suggests the loss that has been created by the COVID-19. In this study, socio-economic models are developed to plan effective strategies for recovering the loss of COVID-19. The model will be efficient to build loyalty programs for the employees that will result in decreasing the rate of employee turnover. Sectors like aviation that provide a bulk number of jobs have closed their recruitment process due to the post effect of COVID-19. The business of air transport has totally shut down due to the lockdown situation of COVID-19. After the lockdown, passengers are not using public transport frequently. Thus, it results in huge losses for the aviation companies. The study uses a qualitative method through which the data has been collected to analyse the study and develop the model. Works on previous research suggest that there is a demand for an effective model on the aviation industry for building a significant stand on the international market. The model will also cover the socio- cultural aspects that can affect the aviation industry.
Aviation Industry has a major role in the international market as it is connected with many other industrial sectors. It helps in contributing a large number of shares to the country’s GDP. Impact on the aviation industry means the other sectors will also get affected from the pandemic situation created by COVID-19. It has been estimated that in 2020 during the lockdown situation, the airline company will lose up to $84 billion from their annual revenue (IATA, 2020). It will be a huge loss for the aviation companies. The companies are having an upliftment on the starting period of 2020. It has been analyzed that the revenue has crossed $598 billion (IATA, 2020). It is a huge pressure for the aviation industry to recover the losses and reduce their employee turnover rate. It can be said that COVID-19 has rewind the bad times of the aviation industry that can prove to be harmful for the future.
Air transport is mainly dominated by the aviation industry. It helps in both public and freight transport. Shutdown in air transport means the daily rates of the essential goods will get increased abruptly and thus, putting an overall effect on the economy. It will indirectly affect the communities. In global standards, the aviation industry has a high reputation that can get compromised if the economy gets disturbed. The socio-cultural aspects of the world will also get affected due to the pandemic situation created by the COVID-19. Basically, the employees and vendors related to the aviation industry have faced a big trouble in this pandemic situation.
Rewarding Options for the Employees in Aviation Industry
Aviation industry is one of the fastest growing industries in the world as for its affordable ticketing, foreign direct investment, modern airport services, and advanced info technology invention in domestic airlines. The literature work emphasizes the impact of the organizational factors on employee’s retention. The literature review provides the study of the chance to analyse the induced data what has been done already and what has executed for employee’s retention. The main reason for rewarding is to motivate them and feel committed to the organisation (Siddiqui & Bisaria, 2018). The earlier research work has focused on the conventional practices of the retention of the workers.
The research provides the data of the factors of impact that motivate the employees to increase their production level. ANP (Analytical Network Process) fuzzy model presents the impact of each of the motivation factors. This research work presents an insight into the portfolio factors and the designing (Mostafaeipour et al., 2018) to motivate the employees and improve productivity by implementing this model. The result of the research shows that by applying this model a significant and positive relationship has been gained in the motivation factors, rewarding system and the productivity of human resources. The internal reward factor, external non- financial reward and the options of the reward system create a massive impact on productivity and the motivation of the employees.
The research shows that the merit pay system, overtime payment feels an employee more committed to the organization. It also ensured the engagement of the employee to the organization. It gives an opportunity to use a variety of abilities of each employee. This study tells that the job training system encourages the employee to provide a good quality service and ensures the responsibility towards the company. It improves the confidence of the employee (Ssenyimba, 2018). It improves the performance of the employee to accomplish challenging work.
The study highlights the theory of the conservation and social exchange to investigate a mediator’s exact emotion and the effects of the customer related behaviour. The structural equation model reveals the internal communication system and the internal market research to forecast the employees displaying genuine emotion towards the customer in the service counter (Nart et al., 2019). Internal marketing also boosts their behavior in the service counter so that the enjoyment and the needs can be manifested. It mediates an effective impact of internal marketing services to make successful service operations. The research is about to examine the internal relationships of genuine emotions, internal marketing practices, and customer-oriented behaviors.
Loyalty Programs for the Employees in Aviation Industry
The study examines the training and the education of an airline’s ground staff and the service quality of the employees which influence on customers loyalty and their satisfaction. The training and the education and service quality is subjected to establish the framework of a factual study. The study helps to achieve the survey method which is conducted to the ground staff and the time structure and the target subjects are set. The data is used to do understand the analysis of the factors, reliability, frequency and regression. The study result shows that the training and the education make a positive impact on the service quality; the employer's service quality creates a positive impact on customer’s loyalty and their satisfaction (Paek & Lee, 2018). This study also aims to verify the relationship of the training of the ground staff, their service quality and the customer satisfaction.
The research focus is to explain the relationship between SCI (Supply Chain Integration) and CRM (Customer Relationship Management) in the logistics of the Emirates Airlines. The study highlighted the link between the airline’s management and the logistics. It promotes a model to manage the customer relationship strategically. The study provides an important implication for practitioners and academics both through Customer Relationship Management to gain the advantages over their competitors (Alshurideh et al., 2019). It concludes the Supply Chain Integration process to improve the internal logistics to customers, suppliers and the integration. This study shows the needs of the airlines industry to make strategic efforts to be competitive in the industry.
The research provides the importance of the human resource in present aviation industries. Human resources can be the most important factors to make an organization successful. Human resources practice is directly related to the employee’s efficiency, their motivation, loyalty to the company and obviously in the company’s profitability (Durmaz & Karaca, 2020). The study provides the knowledge of the human resources practices in the airline industry and its impact on the work.
Customer Relationship Management performs better customer loyalty. This study provides the relationship between the airlines company and the customer to make it more competitive over the competitors. The subject of the study developed a scale to measure customers' relationship with the companies (Demo et al., 2018). The Customer Relationship Management literature develops knowledge on the scale of the industry scale. It might be used as an analytical tool for the airline industries to gain their relationship with strategic customers and make it more effective.
Impact on Jobs of the Aviation Industry
A lot of airline staff has been fired due to the pandemic situation. The aviation industry has suffered mostly in the ticketing sales. They have cut back the flights due to the border restriction in the domestic level and the international level. The cabin crews and the pilots were faced with a salary cut. Many ground staff and retail staff have been fired to reduce the economic loss (Kotoky et al., 2020). According to the IATA (International Air Transport Association), the aircraft manufacturer companies, engine makers and travel agencies are related with the aviation industry. The workers of these companies also lost their jobs.
The study describes how this global coronavirus crisis affects the aviation industry and the global economy. Air traffic was totally suspended for a period of time. The main subject of the research is to collect the data of the air passengers’ traffic on a worldwide basis and prepare a result to show the impact on it. The ban of the air transport system affects a socio-economic base (Iacu et al., 2020). This study is helpful on making a design to make a strategy to fight with the global crisis. The research provides knowledge on the experience of the aviation industry. This pandemic is the cause of the huge economic loss. At this time the aviation industry has faced many unfortunate experiences. All the objectives included in this industry are suffered, the situation is totally changed. According to Akinola (2020), this study lights upon the experience of the aerospace factors. The future economy is also suffering due to this situation and which is based on the present situation. The aviation industry has faced this loss to reduce the spread of this virus.
Global Impact of the COVID-19
The study acknowledges the impact of the coronavirus pandemic on aviation. This resulted in the drastic situation that came upon the business and socio-economic factor. This pandemic has profoundly affected health care. This research designed to state the global impact on vascular surgical services. Critical patients have suffered from getting emergency services. Patient’s service has been suspended to fight with this disease (Ng et al., 2020). Many critical patients did not get proper treatment or scaled down on this situation. That time the main focus was to survive in the pandemic.
The global pandemic over the world killed millions of people and made a question on human existence. This has created a history of global economy and also in politics. Every country has undertaken many steps to fight against this pandemic. This is vastly affected on the major economic factors such as agriculture. There were restrictions on travel, trade to limit the spread of the disease (Poudel et al., 2020). The livestocks like fishery, poultry and dairy production was affected by this pandemic situation. The pandemic protocol interferes on the supply chain of the food products. This has gained a serious impact on food security due to disturbance of the supply chain.
This virus makes a question on the sustainability of the human. It creates an impact on mental health. People suffered from the problems of depression, insomnia, anger, lethargy, fear, denial which affected physical health also. The burden of this disease makes challenges on global health (Torales et al., 2020). WHO labeled that the coronavirus emerged on the respiratory disease? In the first case this virus was found to suffer underlying cardiovascular and hypertension disease. The common symptoms were cough, fever, headache, diarrhea. In some special cases respiratory trouble, cardiac injury was found.
The research estimates the economic impact on global poverty. Many developing countries have faced difficult problems to overcome from this pandemic situation. In some region’s poverty level is highly affected due to loss of the job (Sumner et al., 2020). The income source was disrupted in this situation. Many governments of some developing countries adopted some social protection and indulge job programme to balance the poverty line.
Change in Strategies of the Aviation Industry Due to COVID-19
The research analyses the impact due to COVID-19 crisis and the response to the policies of persevering, retrenchment, innovating and in the exit. The study specifies the differentiations of the strategic response for European airlines and the key implements for the post COVID-19 situations and pay attention to the policies and points to be managed. This pandemic caused a crisis throughout the world’s airlines. There is just no time for a company to respond or plan a strategy fight with this extraordinary crisis moment (Albers & Rundshagen, 2020). This is the reason for the huge loss in the economy of this sector.
The outbreak of COVID-19 has disturbed the aviation industry, threatening their survival and sustainability. They have faced a massive loss for suspending operations. Their operation strategies, revenue system, business model, survived at that moment. This study shows the impact of the pandemic crisis and the lockdown on airlines, and also provides the suggestion of a possible way out for reducing the expected loss. The growth of the aviation sector has stopped this year. They have faced a toughest margin in the aviation market (Nilufer, 2020). The industries have struggled with the fuel cost, aircraft maintenance, selling and distribution cost.
This pandemic has a deeper effect on the current business strategy and the implementations. All the processes are related to each other. The effects are cleared in the new normal situation. Costs are getting controlled in the systems. The working approach of the company and their cost leadership strategy make it more competitive across the world. The companies are dealing with the challenges from the internal to external environment to change the customer demand and the technology. The literature study trees to cover up the business strategy (Amankwah-Amoah & Wood, 2021). And the low-cost leadership management and the strategy in the value chain system.
The scholars increased interest to investigate the Supply Chain Resilience (SCR) to manufacture and service operation in the emergency situation. This study highlights the impact of the out breaking in the COVID-19 on the aviation industry. They have adopted a combination of quantitative and quantitative techniques in 3 different phrases. 1. The study uses a method to integrate the analysis of the financial impact. 2. The study conducted a survey to evaluate the supply chain resilience strategies. 3. It provided an interview with the supply chain of the airlines industries (Belhadi et al., 2021) to understand their supply chain resilience strategies.
Hypotheses Taken from the Literature Review
According to the literature review discussed in the former points, there will be four hypotheses taken for further research.
H1: Analyzing the organizational factors that influence the employee turnover.
The work of the paper is to highlight the influence of the organizational factors of the employee reservation. The paper provides a chance of analyzing the influence data that has been already done for employee retention. The paper provides the factors that motivate the employees to increase their production level.
H2: Analyzing the technical services that help in the industrial growth
ANP (Analytical Network Process) in the paper presents insights into the documented factors and design. This also shows the impact of the motivational factors. The structural equation model highlights the internal communication system and the internal market research to foretell the genuine display of emotion towards the customers in service counters.
H3: Analyzing employee satisfaction
The research shows through the merit pay system by paying the employee overtime allowance, feels much more committed to the organization. The paper points out that study of loyalty programs are subjected to accept the frameworks of factual studies.
H4: Analyzing factors influencing the smooth aviation service
Data from the survey methods are used to analyze the factors of reliability, regression and frequency. Results show that education and training have a positive impact on the service quality and satisfaction of customers. The paper highlights the relationship between SCI (Supply Chain Integration) and CRM (Customer Relationship Management) and also signifies the importance of Human resource in the airlines industry.
The paper will also analyze the Covid-19 pandemic impact and response to the certain policies of retrenchment, innovating, persevering and in the exit. The paper will put light on the different strategies for different airlines and major implementation after the pandemic situation and also focus on the manageable policies and points.
Sampling and Data Collection
The research is based on three major information sources. First, the supply data of flights were obtained from OAG (Official airlines guide) that gives information on a various number of variables for every planned flight, including depart and arrive airports, time of arrival and departure, number of supplied seats, day of operations and type of aircraft. Another limitation on the exactness of OAG data sets is the sudden unparalleled changes in the market. In this analysis, there are several limitations acknowledged for using the dimension of data for various reasons. There were numerous airlines flying vacant aircrafts or with very limited loads. In the CLIVE data service, the datasets consist of information on energetic load factors, air cargo capacity and chargeable weight.
Few aviation industries will be selected. Concerning the airlines sector interview will be taken of the enormous low-cost carriers, managers of the carriers of important networks, an airline association, a regional airline, an aircraft lessor, a pilot union, an aviation insurance broker (Suau-Sanchez et al., 2020). For the airport zone, interviews will be taken of a medium size airport, large hub airport, airport investment firms and regional airports. Senior leaders and data companies will also be interviewed. Semi structured interviews will be considered to be the most appropriate method as they permit the communicators to come up with new, unpredictable affairs, and the interviewer to go through topics more workably.
Semi structured interviewing focuses on three main factors such as, long term results on the supplying part, the possible changes in the customer behavior and the long-term possibility of enforcement impact.
Data Analysis
Qualitative method of collecting data will be used for the paper. Thematic analysis will be done on the data that will be collected in the method. The analysis will be done on collaboration of needs within the organization and consider the questions to be answered during the data collection and analysis (Calzon, 2021). A key performance indicator will be set to track, shape and measure the progress of the key areas. Omitting of useless data will be done and the statistical analysis will focus on factor, cluster, regression, neutral network and cohort.
Thematic analysis is the best way to analyze the data as retrieved from previous works. It will help in determining the link with the current study. As the current study is based on the current social topic, thus information from the previous works is necessary to establish the main objective of the study. Key points will be retrieved from previous research works as the form of codes. The codes will then be integrated into themes. The themes will be reviewed based on their purpose and link with the current study.
Developing Model on Aviation Industry to Recover the Impact of COVID-19
The model will consist of two parts namely- planning strategies to reduce the employee turnover rate and offering various discounts to attract customers.
Covid 19 pandemic has a drastic reduction on the airline's traffic globally and the bulk of passengers connecting with airlines were a hard hit. Therefore, in a hub model airlines will be using banks of incoming and outgoing flights, so that the passengers get an enormous number of possible journeys. The demand of flights connecting the major intercontinental routes has been moving upward due to both the financial and logistical advancement of passenger experiences as well as the usefulness of the airlines. Some experts came up with the point that a change in the technologies of aircraft will favor point to point flights (Bouwer et al., 2020). Hub clogging and the pressure of tight connections will limit the growth of hub carriers. The model will be applicable in the post pandemic world although there will be temporary pressure on hubs and long duration pressures on few more hubs.
The application of the models will depend on the capability of airlines to adapt their function to the reality. In a temporary basis airlines will be seeking out a new origin of insight for guiding the reconstruction of their networks. In some cases, constancy will require an amendment of the position in the market, pricing and the aircraft technologies along with better usage of data. At a certain point, major drops in the demand for and the supply of associate flight are in sequence with long term trends. The drawing shares will be assigned to the growth of point-to-point carriers, with minimum cost carriers looking for a remarkable increase in the share of the market.
Thus, new customer loyalty programs such as attractive offers and discounts in flight ticks must be introduced to the customers. Different offers on different websites will intricate the customers to get good deals on flight tickets. This will help in recovering the airline industry costs.
Government aids and funds would also help the industry to get back on the track. It will help to get a better infrastructure of the industry along with bulk employment. New services would be introduced putting up more counters and service providers. This will help in employment in aviation as well as retrieve the cost to run the business.
Assessing the Model Based on the Global Standard
From the former research points it has been made clear about the aims and need of the research. The model that has been focused upon is mainly aimed at setting the aviation industry on track slowly after post covid situation. The model discussed above consists of two major strategies, reducing the employee turnover rate and offering various discounts to attract customers.
With the use of sufficient incoming and outgoing flights and giving customers enormous journeys will help the industry retrieve slowly. There is a huge demand for flights in the intercontinental routes thus increase in number will help in many ways. This will give a chance to the aviation industry to introduce attractive offers to the customers so that they board more flights. Numerous websites offer mainly flight ticket offers in retail websites will help to attract more customers and gain business. Discounted ticket purchase facilities in the online transaction or using particular bank credit cards will also be profitable for airlines industry.
Government aids and funds will also help in the rise of the industry. Introducing new services and counters will give rise to new employment as well as better service to the customers. This socio economic model will bring a new dawn in the aviation industry.
Discussing the Strategies for Recovering the Jobs on Aviation Industry
The aviation industry has gone through numerous threats throughout history, but none of those were not as swift and dreadful as the Covid-19 pandemic. As the industry faced depletion in capacity and limitation in travel, the impact on the airport labours was not known. Based on the data of airline employment, airlines are classified into three major groups: regional, major and low-cost airlines. Within each group, data are collected in six categories reflecting the impact of Covid on the employees. There are numerous skills workers in the airlines represented as lower level and low skilled workers by labour firms.
Unpredictable disturbance has a dismissive impact on the airline employment and the reduction can go through the persisted periods. The outcome will be described by the enormous financial submission of major airline industries and vast payroll responsibilities. The major airline industries faced more challenges by the disturbance due to their obstinate business and low-cost porters (Sobieralski, 2020). It could be expected that these airlines would agonize only in the short run circling the unpredictable disturbance such as Covid 19 pandemic. On the other hand, regional airlines showed gain in employment circling unpredictable disturbance with immense variations in the overall employment. The cause of this result was the major airlines using the regional to utilize smaller and well organized aircrafts.
So, employment on regional airlines is expected to increase with the upliftment of travel restrictions, the unexpected disturbance is dated, major airlines are attempting to reduce costs undertaking the regional airlines. Computing unexpected disturbance using the expected index is examined against other expectations. Unexpected disturbance has a negative impression on many major airlines although the use of unexpected measures. It can be estimated that over 32000 employees lost their jobs.
Unexpected disturbance caused early decline in the cargo control employees than the passenger control employees, such as gate or ticket agents facing the largest disturbances.
For the low-cost airlines, it can be noticed that there are minimum negative effects on aircrew. It can be quickly recovered as functioning for low-cost airlines tends to climb post disturbance. The growth in performance in future as low-cost carries tends to grow dimensions following the disturbance increases employment in management, passenger handling and aircrew. Mediating Effect of Loyalty Programs on Aviation Industry
In 2020 the airline industries are the worst affected in the global pandemic situation. The market representation of 2020 has stern description of the airline industry.
The airline loyalty program also known as the frequent flyer program is provided by many airline industries to keep the passengers loyal to them. All the airlines industries have similar receive and rescue models. The Business travels need to have a membership along with earning points and miles every time they board the flight.
The effects of loyalty programs in the aviation industry are discussed. Selling miles generates profitable income for the airlines (Tiffany, 2021). Airlines sell more miles to a third- party provider. In this way, airlines make more profit from the basic ticket selling business. Loyalty program is basically a two-way program. It not only benefits the industry but also the customers as well. The airlines offer the customers with better prices on tickets, special festive offers, discounts, that make the customer feel valued. A valued customer always feels motivated to invest more and continue the cycle. In the case of business travelers, airlines know that companies are willing to spend but to keep the customer loyal to a single airline, they offer right inducement. These customers will spend more if provided with best benefits and with miles the limit of benefits increase.
The revenue-based loyalty programs have their own benefit in the aviation industries. Airlines like South African Airways, Qantas, and Cathay Pacific follow the revenue-based loyalty programs along with some American airlines. Apart from that there are factors that work vice versa with loyalty of customers and business. There are profits from gained purchase, profits from the reduction of operating costs, profits from referring others, profits from installment prices.
On the other hand, it is a mistake to make an assumption of regular customers being more profitable than one-time purchasers (Hossain et al., 2017). Companies need to make assessments on the value of loyal customers. All types of services do not require any advance service to attract new customers. On the revenue part, loyal customers may not snap up more than one time. It will not affect the revenue growth.
Managerial Implications
The main components or key points comprise the managerial implications of the study. Key Points in this study involves loyalty programs for the employees, providing discounts to the customers, putting restrictions to least possible baggage and seeking feedback from the customers for future improvement. It will help in recovering the losses that have been made by the COVID-19. The business revenue will slowly get stable by implementing the discounts and different modes of payments for the customers. It will thus help in building a strong path for the companies in future. It can also be determined that strong plans on the aviation industry will help in expanding the business according to the global standards. Global standards are set as per the uniform laws that have been followed all over the world. Every industry has its own global standards. In this pandemic situation, the global standards of the aviation industry have decreased due to the shutdown in the business processes. The model will thus help to build proper strategies in the aviation industry. Research Direction on Future Works
Developing models help in determining the new pathways for the aviation industry. The future researchers will get ideas from this study for developing the advanced model on the aviation industry for smoothening their process in post COVID-19 situation. It can be determined that the model will provide a new direction to the future works. The socio- economic model will cover different aspects that are beneficial for the future. The future works on the aviation industry will provide more information on the impact of the COVID-19 that can be applied for developing new models.