Business Desk
Most airlines operate with a business model that just doesn’t work when oil prices rise above $125 a barrel. The airline industry is capital intensive and under extreme pressure as the price of ATF consumes a greater portion of their operating budgets.
Typical airlines have legacy styled management that was inherited from heavily regulated and or state run enterprises. This management style has created a corporate culture based on meritocracy versus performance leading to high labour and benefit costs with a semblance of entitlement.
Even today most airlines support capabilities around reservations, operations and technology that are managed and delivered with high cost tenured in-house resources versus outsourced labor.
While airlines may not be able to control the cost of fuel, they most certainly must change their systemic and historical operating models that make up the second largest portion of their operating budget after fuel and capital expenditures.
Airlines can survive the fuel crisis by utilizing a blended mix of outsourced and in-house staffing. Progressive airlines are maximizing their passenger experience by focusing on their relationship with their customers, managing their brand and partnerships while leveraging world class service providers in both the IT and BPO industries.
Airlines can realize significant savings and improve their passenger experience by developing strategic relationships with solution and service outsourcing partners.
