ATTRACTIVENESS AND COMPETITIVENESS OF THE UK (CAA’S) AVIATION SAFETY POLICY AND STRATEGIES FOR 2016-2021

Introduction

Air transport is among the most competitive industries in the world. The industry is classified as one of the hyper-competitive industry, where organizations challenge themselves to create innovative initiatives to achieve the most attractive and competitive results. According to CAA (2016), safety is one of the essential pillars of the sector and especially its customers and the public. Transport is a paramount consideration that significantly affects the competitiveness of firms within the industry.

Consequently, this essay will critically analyze the fundamental principles of the Civil Aviation Authority safety policy framework and if the new policy strategy outlined in the system will make UK aviation a better sector, for those who choose to fly and those who do not. Rahman, Azad, and Mostari (2015) elaborates that in the aviation industry diverse factors such as airlines, airports, or passengers combine to determine which strategy under an individual policy, it could be the most efficient for the organization. This essay will critically discuss and analyze and how it increases the organization’s attractiveness and competitiveness by using relevant theoretical models such as Ansoff Matrix and Blue Ocean Strategy.

Significance of the Industry

The aviation industry is associated with three distinct economic benefits. The industry significantly contributes to the growth of the economy in three different aspects. Studies have explored the importance of the sector in the development and growth of the economy through its contribution to national GDP, employment creation, and tax revenues as a source of government revenue (Humphreys, Ison, Francis and Aldridge, 2015). However, the economic importance of the industry is still more comprehensive. UK aviation industry is one of the significant sources of national pride of heritage in the economy. The principle benefits of the industry are developed for the consumers, the individual using the services, and not outwardly to the United Kingdom (Tsui, Yuen, and Fung, 2018).

In 2019, the aviation industry contributed more than £51 billion, which is equivalent to 3.5% of the UK GDP. The industry direct and indirect employment opportunities to more than 961,000 people. The industry is classified among the best paying opportunities, with an average of £84,000 annually per employee, which is 60% higher compared to the whole economy. Over the last three years, aviation paid a percentage of the £8.65 billion to the government in the form of taxes. The industry in the United Kingdom aims to retain and increase its market share by strategically developing safety measures as a competitive advantage. The strategy is aimed at the raise consumers of the services of the industry confidence and produces a competitive advantage over the rivals (Addepalli, Pagalday, Salonitis and Roy, 2018).

Aviation Safety Policy Framework

According to (Colebatch, 2009) for the participants of the market such as an organization, the policy may be known as a vehicle for improving and contesting the existing order and sustaining the correct to participate. The commercial air transport (including the helicopters) accidents in the UK and incommensurate safety regime imposed, these are recognized as the partly problems which demanded new strategies and approaches to make it more competitive and attractive compare to other organizations (Houdmont, Madgwick, and Randall, 2016). Aviation safety across the world is among the primary considerations in ranking the competitiveness of firms within the industry. In 2019, the world recorded a total of 86 accidents. The year marked a total of 257 fatalities, with Ethiopia Airlines recording the highest number of deaths in the year (Spoone et al., 2019).

Fig 1. Commercial Flights Accidents rate (Spoone et al., 2019)

According to Colebatch (2009), for the participants of the market such as an organization, the policy may be known as a vehicle for improving and contesting the existing order and sustaining the correct to participate. The existence of safety policy is not the consequences of somebody such as government, who identified the issue and decided to solve it, more likely it is the result of activity by concerned people – some inside the machinery of the government, but majority outside it to attract to gaps in system which could cause some danger for its stakeholders (Humphreys, Ison, Francis and Aldridge, 2015). The commercial air transport (including the helicopters) accidents in the UK and incommensurate safety regime imposed, these are recognized as the partly problems which demanded new strategies and approaches to make it more competitive and attractive compare to other organizations (Grubb and Mason, 2001).

The aviation safety policy framework is considered adequate and competitive compared to others across the globe. Through an analysis of the number of accidents witnessed over the years, air transport was ranked the safest with no record of accidents while the motorcycle recorded the highest number of accidents in the United Kingdom. The developments of the policy framework significantly ensure a streamlined approach and provide an evaluation document critical in the sustenance of safety within the aviation industry (Briliana, 2018).

Figure 2. Fatality Rates Comparison of Different Modes of Transports

Briliana (2018) elaborates that large passenger planes are the safest mode of transport. Over the last fifteen years, the country has not recorded any fatal accident. Comparatively, this makes the UK aviation industry as the most competitive industry. The deadliest disaster was recorded in 1989 in the UK The safety plan is developed as an approach of showing and demonstrating UK commitment measures to protecting the people of the United Kingdom and associated risks in the aviation industry. Understanding the implication and the importance of safety in a competitive industry, Patankar and Sabin (2010) pyramid-style conceptual model used in the analysis of the approach safety in the air transport industry. The model is developed based on four stacked layers.

Figure 3. Safety Culture Pyramid (Patankar & Sabin, 2010)

Its application in the aviation industry indicates that, at the apex of the pyramid, is the safety performance of the involved industry is strategically followed by climate safety. Climate safety entails understanding and appreciation of safety measures among the employees. The aviation safety framework is critical in the education of the stakeholders on the importance of precaution measures in the aviation industry. Safety strategies are crucial. The development of strategy enhances organizational culture in the identification of safety as a priority within the industry. According to Patankar & Sabin (2010), the formulation of safety values from the foundation is critical to the development of the right strategies and measures. The use of the pyramid is an analytical approach and provides a unique method of describing linkages across theoretical constructs, specially developed in the airline industry (Low and Lee, 2014).

CAA’s Strategic Plan 2016–2021 Making Aviation Better

Based on the safety culture pyramid, United Kingdom (CAA’S) Aviation developed its competitive safety advantage based on the safety plan. In the CAA’s Strategic Plan 2016–2021 on page 16, strategic aviation plans to sustain competitiveness are outlined in detail. The safety performance is in detail analyzed in an attempt to develop the most effective approach and measure (Hughes, Anund and Falkmer, 2015).

The general purpose of the CAA Strategic Plan is to ensure the industry in the UK develops operational effectiveness creates a significant difference between the firm’s competitiveness. The management should provide the competitive method utilized is unique and challenging to be copied by the rivals within the industry. United Kingdom (CAA’S) Aviation safety strategy is aimed at enhancing the competitiveness of the sector in the long run. The safety measures are developed based on a projection of five years (Flouris & Oswald, 2006 ). The safety measures designed are unique and entails the utilization of modern vital procedures (Grubb and Mason, 2001).

Ansoff Matrix on Aviation safety Policy and Strategies for 2016-2021

The establishment of competitive approaches entails a critical analysis of existing approaches policies and formulating the most effective one. Ansoff Matrix is strategic planning that provides a framework for the management and policy formulators within an organization to provide room for further growth. The analytical tool is developed based on four components that each weighs its productivity. Accordingly, the approach can be attached to the development of Aviation safety policies.

Market Penetration

The aviation industry is among the most competitive in the world. Growth in technology, digital booking measures, comfort, and affordability are among the traditional competitive advantages across the industry. However, high levels of risks and growth of terrorism activities across the world, have raised concerns among the stakeholders in the sector (Briliana, 2018). CAA development of safety policy framework is a critical approach towards the achievement of the set goals. The CAA approach is aimed as an entry approach to other market segments across the world. Ansoff Matrix marketing segment establishes the strategic management approaches towards the expansion of its market share.

Product Development

In this stage of Ansoff Matrix analysis, management developed a new product favorable in the current market. Terror threats and security concerns are among critical and sensitive issues in the aviation industry. Growing security as a strategic approach is a crucial consideration in the aviation industry. CAA security policy framework enhances the competitiveness of the United Kingdom airlines.

Market Development

In the market development strategy, organizations enter a market with their product. CAA has competitive brands that are known across the world. The security policy framework will significantly assist in capturing the competitiveness of the aviation industry in the United Kingdom (Colebatch, 2009). Comparatively, compared to other aviation organizations across the world, security structures are based on single companies. The development of a security framework raises the confidence of the stakeholders critical in the growth and development of the market share. Market development entails reaching different customer segments and also entering you explored domestic markets (Kim and Mauborgne, 2014).

Diversification

Diversification is classified as a risk approach to developing a competitive advantage in the aviation industry. The procedure entails the utilization of related and unrelated diversification approaches. Accordingly, the use of a diversification approach is a critical consideration in the aviation industry. The purpose of safety security approaches will enhance the competitiveness of the firms in the industry as a diversification approach (Cento, 2008).

Blue Ocean Strategy on Aviation Safety Policy and Strategies for 2016-2021

Blue ocean strategy is developed to explore and extend the market share in explored sectors. The approach necessitates the development of a critical competitive advantage suitable in the event of a market setting (Kabukin, 2014). The strategy was proposed and developed in 2005 by Chan Kim & Renee Mauborgne. The principal objectives of the policy encompass the development of a plan to overcome competition in a congested industry, the pursuit of low costs, and differentiation as a competitive advantage and develop and extend the market shares of the organization (Burke, Van Stel, and Thurik, 2016).

CAA is the mandated government department in the formulation of strategies in the long-run productivity of an organization. Aviation Safety Policy and Strategies for 2016-2021 was developed as a diversification of competitive advantage of the United Kingdom aviation industry. The approach is unique and reduces the overall risks through proper planning and development. Significantly, security is critical in the aviation industry (Düsseldorf and Wubben, 2012). UK government, through the utilization of the Aviation Safety Policies, aims to strategically offer a competitive ground through the provision of security policies. Security measures and the formulation of the most effective strategies will enable the UK aviation industry to penetrate other markets. This will allow the company to penetrate to other parts of the world with the utilization of security policies as a competitive advantage. Blue Ocean Strategy is a critical approach developed and used by CAA to develop a competitive brand-suitable across the industry (Kabukin, 2014).

Conclusion

Management of an organization has the responsibility of developing competitive advantage approaches over the rivals. The aviation industry is classified as a capital intensive industry that requires optimal consideration before the development of strategic plans. It entails a critical analysis of the industry, formulation, and identification of the right approach and development of the most effective and efficient method to achieve the set objectives (Oster, Strong, and Zorn, 2013).

Aviation safety is considered among the essential factors that determine the reliability of an enterprise. United Kingdom Aviation Safety Framework outlines how the United Kingdom government approaches aviation safety. The principal objective of the establishment of the safety policy is to enhance aviation safety and also utilize it as a competitive advantage over the rivals in the industry (Thomas, 2012).

Bibliography

Addepalli, S., Pagalday, G., Salonitis, K. and Roy, R., 2018. Socio-economic and demographic factors that contribute to the growth of the civil aviation industry. Procedia Manufacturing, 19, pp.2-9.

Briliana, V., 2018. Consumer satisfaction on airline passenger loyalty: Antecedents and outcomes. International Journal of Business, Economics and Law, 16(5), pp.1-9.

Burke, A., Van Stel, A. and Thurik, R., 2016. Testing the Validity of Blue Ocean Strategy versus Competitive Strategy: An Analysis of the Retail Industry. International Review of Entrepreneurship, 14(2).

Cento, A., 2008. The airline industry: challenges in the 21st century. Springer Science & Business Media.

Colebatch, HK, 2009. Governance as a conceptual development in the analysis of policy. Critical policy studies, 3(1), pp.58-67.

Düsseldorf, S. and Wubben, E.F., 2012. Bringing Blue Ocean Strategy to FMCG Markets. Proceedings in Food System Dynamics, pp.105-118.

Flouris, Triant G. and Sharon L. Oswald. “The Essence of Competitive Strategies .” Flouris, Triant G. and Sharon L. Oswald. Designing and Executing Strategy in Aviation Management. Hampshire : Ashgate Publishing Limited , 2006 . 39-40.

Grubb, H. and Mason, A., 2001. Long lead-time forecasting of UK air passengers by Holt–Winters methods with damped trend. International Journal of Forecasting, 17(1), pp.71-82.

Hartley, K., 2014. The political economy of aerospace industries: a key driver of growth and international competitiveness?. Edward Elgar Publishing.

Houdmont, J., Madgwick, P. and Randall, R., 2016. Sun safety in construction: a UK intervention study. Occupational Medicine, 66(1), pp.20-26.

Hughes, B.P., Anund, A. and Falkmer, T., 2015. System theory and safety models in Swedish, UK, Dutch and Australian road safety strategies. Accident Analysis & Prevention, 74, pp.271-278.

Humphreys, I., Ison, S., Francis, G. and Aldridge, K., 2005. UK airport surface access targets. Journal of Air Transport Management, 11(2), pp.117-124.

Kabukin, D., 2014. Reviewing the Blue Ocean Strategy. Is the Blue Ocean Strategy valid and reliable? (Master’s thesis, University of Twente).

Kim, W.C. and Mauborgne, R., 2014. Blue ocean leadership. Harvard business review, 92(5), pp.60-72.

Layton, G.R., 2012. Aviation safety: Comparing national and regional governmental regulatory commercial oversight affiliations. International Journal of Business and Social Science, 3(3).

Low, JM and Lee, B.K., 2014. Effects of internal resources on airline competitiveness. Journal of Air Transport Management, 36, pp.23-32.

Oster Jr, CV, Strong, JS and Zorn, C.K., 2013. Analyzing aviation safety: Problems, challenges, opportunities. Research in transportation economics, 43(1), pp.148-164.

Rahman, K., Azad, S. and Mostari, S., 2015. A Competitive Analysis of the Airline Industry: A Case Study on Biman Bangladesh Airlines. IOSR Journal of Business and Management, 17(4), pp.23-33.

Ryley, T. and Davison, L., 2008. UK air travel preferences: Evidence from an East Midlands household survey. Journal of Air Transport Management, 14(1), pp.43-46

Spence, T.B., Fanjoy, R.O., Lu, CT and Schreckengast, S.W., 2015. International standardization compliance in aviation. Journal of air transport management, 49, pp.1-8.

Spooner, C., Kobayashi, T., Greenman, C., Bowen, B.D. and Blocker, K., 2019. Aviation Safety, Quality, and Economic Impact: A Policy Research System.

Taneja, N.K., 2017. Airline survival kit: Breaking out of the zero profit game. Taylor & Francis.

Thomas, M.J., 2012. A systematic review of the effectiveness of safety management systems (No. AR-2011-148). Canberra, Australia: Australian Transport Safety Bureau.

Tsui, K.W.H., Yuen, A.C.L. and Fung, M.K.Y., 2018. Maintaining competitiveness of aviation hub: Empirical evidence of visitors to China via Hong Kong by air transport. Current Issues in Tourism, 21(11), pp.1260-1284.