Crisis Management: Challenges of the New Normal

Background

Crises in the airline industry are nothing new and the industry is still managing the impact of the ongoing Covid-19 pandemic. Whilst the latest omicron variant is now widespread around the globe, infection rates are in decline and the world is slowly getting used to an endemic, as opposed to a pandemic. Coronavirus and future variants are with us to stay and western countries are now learning to manage and ‘live’ with the virus.

The only exception to the rule is China, which is now experiencing a rapid spread of the omicron virus, forcing entire provinces into lockdown and bringing into question its zero-covid containment approach.

The situation is having a disruptive effect on western supply chains, fuel prices and airline networks. And the war in Ukraine has also resulted in EU carriers experiencing airspace restrictions, lengthening flight durations and increasing fuel costs. This requires airlines to adjust airline network schedules and also raises increased risk for aircraft lessors/ fleet management and the possibility of fuel surcharges on ticket prices.

These ongoing events can be unpredictable and lead to a combination of risk factors that are disruptive to airline business stability, safety and performance. The difficulty in a post Covid-19 world is that not only have airlines and aircrafts been working at very reduced rates, but the environment in which they are about to recover operations has changed significantly.

Recovering scheduled services to some semblance of ‘Business As Usual (BAU)’ is requiring operators to respond to a myriad of challenges and problems.

Crisis response and safety resilience

It is essential during this time that airlines maintain an effective crisis response that can adapt to the fluid global situation. The “Covid new normal” phase of living with the virus establishes the foundation for a new flexible way of doing business with a focus on dynamic risk response and safety resilience.

It’s vital that operators monitor risk creep, track safety violations and look for signs of unhealthy risk tolerance. If they uncover anything, operators should deal with it in an appropriate and just manner, and remember that it’s natural for individuals and organisations to experience a change in risk appetite in times of crisis.

The risks and necessary controls transcend organisations, which means effective risk management requires a thorough understanding of the airline network and operating environment, where the vulnerabilities exist, and the controls that are in place upstream and downstream of the airline system to effectively deploy defences.

The key concept behind organisational safety resilience is how operators adjust safety delivery and safety performance during and after the Covid-19 pandemic. The tools available to management teams to support organisational resilience include safety culture and leadership, organisational governance and structure, supporting regulation, assurance and compliance oversight and dynamic risk and crisis management.

In response to the changing nature of the risk landscape airlines should consider:

• adopting a progressive and coordinated management focus on crew planning
• safe recovery and return to service of parked/mothballed aircraft
• managing revenue and cost pressures so that it doesn’t unduly reduce acceptable safety levels
• performing fleet management planning (smaller aircraft/large aircraft retirements) with new technologies (propulsion/safety)
• considering possible culture and behavioural changes of staff and suppliers as the company addresses ongoing constraints and critical events
• putting in place an effective supplier management and oversight program
• making sure enough experienced staff are available for the work scheduled (current pilot shortage)
• ensuring continued use of the Safety Management System (SMS) to its full potential
• communicating and collaborating with industry stakeholders on shared safety procedures.

The pandemic has focused attention on how aviation organisations, indeed all organisations, can anticipate, prepare for, respond and adapt to change and disruption. Aviation businesses need to be resilient to respond to disruptions, but they also need to adapt to challenging conditions too. And where practical, capitalise on opportunities as the market keeps shifting.

Critical Event Management & Organisational Resilience

Contemporary airline emergency response management, crisis management and business continuity are now merging into a new system called Critical Event Management (CEM). CEM started as an integrated business response to crisis events including coordination and control, stakeholder communication and management, ongoing crisis monitoring, and audit and assurance oversight.

Effective crisis management comes down to organisational resilience, which requires a combination of:

• Risk management
• Physical barriers
• Redundancy (spare capacity)
• System back-ups
• Standardised procedures and applied technology.

These factors protect the organisation from threats and allow it to bounce back from disruptions and restore stability.

With social media being able to share information at such a speed these days, it’s critical organisations manage crisis communications as soon as an event happens. IATA (2019) guidance material on crisis communications recommends that with the advent of mobile phones, 5G and high speed data networks, airlines need a crisis response strategy fit for the digital era.

The general public can upload content and HD videos of an unfolding emergency situation instantly, leaving airline crisis management teams little time to coordinate and communicate the right messaging (China 737-800 accident, 21 March 2022).

An effective integrated organisational response can be achieved by using a dedicated crisis software platform that enables a timely, secure notification, management understanding of the risk environment and tracking of management team decisions and action plans, irrespective of geographical location of stakeholders.

Professor David Denyer of Cranfield University described resilience in his 2017 academic paper titled “Organisational Resilience”. He describes it as “the intrinsic ability of a system or an organisation to adjust its functioning prior to, during, or following changes and disturbances, so that it can sustain required operations under both expected and unexpected conditions.”

Resilience in crisis management means looking ahead, thinking creatively and anticipating environment changes that could affect safe operations. It means applying the SMS to monitor the threats and risks associated with these changes, as well as using risk informed governance to ensure the organisation can flex and absorb disturbances as they happen.

Organisational resilience for airlines can be achieved by implementing an integrated system at an enterprise level to effectively support a pre-planned and coordinated crisis and emergency response in a time critical environment.

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