Achieving and Maintaining Operational Resilience a- A Strategic Priority for the MENA Region's Thriving Airports
(MENAFN Press) Airports in the Gulf Cooperation Council (GCC) experience local disruptions “ such as those that stem from fog “ which, annually, affect over 200 flights and 30,000 passengers in the United Arab Emirates (UAE) alone.
In addition, according to Oxford Economics, disruptions from the 2010 spread of Icelandic volcanic ash over European airspace had a 253 million net impact on the aviation sector in the Middle East and Africa.
At an airline level, the disruption resulted in approximately 11 million in lost business each day for Emirates Airlines “ the Middle East's largest airline.
The truth is, major and even minor operational disruptions not only impact travelers; they also lead to significant revenue losses, require massive response costs, and cause broader economic issues, on a national level.
In line with this, management consulting firm Booz & Company has found that, in order to ensure the ability to prevent, manage and recover from disruptions, the MENA region's airports must make operational resilience a strategic priority. After all, the risk of not being resilient is substantial “ both in terms of finance and reputation.
THE SIGNIFICANT IMPACT OF AIRPORT DISRUPTIONS
Unexpected disruptions have become the norm for air travelers across the globe, including in the Middle East. "While the impact on travel is substantial, the potential damage to airports' reputations and long-term business can be worse," said Fadi Majdalani, a Partner with Booz & Company.
"It can result in travelers seeking alternative hubs and regulators pushing for costly controls and financial penalties. Ultimately, such disruptions have detrimental consequences for the Gulf Cooperation Council's (GCC) thriving aviation industry, which plays an important role in the region's economic diversification."
Indeed, disruptions can severely affect airports' daily operational priority “ to maximize revenues by having as many passengers board planes as safely as possible. Airports achieve this objective through sophisticated and complex operations that, if disrupted, limit valuable capacity and the number of flights that they can operate.
"As a result, airports must proactively work to address the most manageable factors of resilience “ including clearly defined command and control, collaborative planning with stakeholders, coordinated management of passenger flows, and dedication of operational equipment and resources," said Alessandro Borgogna, a Partner with Booz & Company.
Understanding the Causes
Airport disruptions are typically caused by three main factors: circumstantial, structural or managed. Circumstantial factors are entirely or nearly entirely outside the control of the airport management and its airlines; they include an airport's geographic location and susceptibility to weather as well as vulnerability to security threats and potential political instability. Other factors can be considered structural with airport and airline management able to exert varying, but often limited, influence. These factors include the airport's infrastructure and overall capacity utilization in normal operations, regulatory restrictions, stakeholder landscape and operational complexities.
Finally, there are resilience factors that can be fully managed; these include collaborative planning, command and control, use of information and technology, dedication of resources and continuous improvement.
"While some disruptions are unavoidable, others can be addressed," explained Marwan Bejjani, a Senior Associate with Booz & Company. "The best way for MENA airports to deal with these resolvable factors is through achieving and maintaining operational resilience. With the region's airports becoming increasingly important global hubs, operational resilience should be their strategic priority."
One such hub, Dubai International Airport, has become the world's second busiest airport by international traffic, accommodating 57 million passengers in 2012, compared to 10 million in 1998. Similarly, Jeddah's airport served 19 million passengers in 2010, up from 10 million in 1998. And, a total of 14.7 million and 23 million passengers travelled through Abu Dhabi and Doha airports, respectively, in 2012.
Moreover, regional air traffic is set to rise further due to investments in airport infrastructure in North African countries as well as GCC states such as Oman, Kuwait, and Bahrain “ making operational resilience a strategic priority for airports in the Middle East.
THE ABILITY TO PLAN, MANAGE AND RECOVER
Today's major MENA airports are highly complex with increasingly significant limitations on capacity. "The ability to make the most effective use of that capacity is a daily operational priority; when an event disrupts capacity, an airport's resilience is exposed," added Majdalani. "Specifically, we view operational resilience as the ability of an airport to prevent, manage and recover from disruptions."
Addressing all three components is paramount:
Prevent: If an event is accurately forecast, the airport and airlines can prepare accordingly “ positioning staff and equipment in the right place at the right time to ensure operational continuity. Of course, an inaccurate forecast or an event that is not forecast at all presents the greatest challenge. Yet, with adequate preparation, significant operational disruption from an event can be limited if not prevented altogether.
Manage: Once a disruptive event is underway, the airport, together with its stakeholders, must be able to effectively manage it. Incident or crisis response protocols must be executed, contingency plans need to be followed, additional staff may need to be deployed and all participants must adhere to clear roles and responsibilities. Perhaps most important is the required collaboration to manage and address the situation. Planning tools which allow real time trade-off analysis can also help decision-makers understand the "least bad" course of action.
Recover: There should be clear plans for how to transition the airport community back to business-as-usual. Response protocols should be gradually dialed down and robust communications and situational awareness should ensure that key operational issues have all been addressed. The trade-off planning tools can help to identify the best sequence for rescheduling delayed operations.
TEN RECOMMENDATIONS TO ACHIEVE RESILIENCE
Based on a review of resilience capabilities and practices at nearly 30 of the world's leading airports, Booz & Company has identified ten key recommendations for enhancing and achieving operational resilience:
1.Ensure resilience is a strategic priority: Resilience should be a key part of the CEO's agenda and be continuously championed by an executive sponsor.
A senior manager should also be dedicated to operational resilience and business continuity, with a supporting team of staff as appropriate. Major resilience initiatives should be prioritized as part of a consolidated agenda of strategic programs.
2.Collaborate extensively with stakeholders: Airports must prioritize strong working relationships with key airport stakeholders. Regular meetings of representative forums should take place throughout the year to jointly develop and share resilience plans and ensure readiness is coordinated.
Daily operational calls can ensure alignment during business-as-usual, while predetermined incident response forums should be activated when needed.
Airports can help ensure adequate capital investment is made available for resilience capacity by helping airlines, regulators and other stakeholders understand the true cost of disruption.
3.Enable proactive ways of managing: Airports that increase their capabilities to manage proactively develop competitive advantages. Proactive management requires clearly defined early warning indicators (EWIs) and response triggers that are actively monitored and acted upon.
It also helps to have a consolidated airport operating plan (AOP) and stakeholder forums with delegated authority to make decisions in advance of a forecasted event.
4.Leverage information: The best airports figure out how to consolidate and use the massive historical and real time information available to them.
Core to this ability are information platforms such as an Airport Operating Database (AODB). Key to the success of AODB use is both the sharing of information among relevant stakeholders as well as the capability to use the information on the day and beyond.
5.Measure performance and impact: "The ability to articulate exactly what worked well and what did not can provide a valuable basis for response assessment and improvement," said Borgogna. "Best practice airports will employ a response scorecard with easy-to capture key performance indicators (KPIs) and other relevant measures."
6.Coordinate command and control: A number of major airports have modern integrated control centers to cross-functionally support both business-as-usual operations as well as incident responses.
Others continue to manage operations from a number of individual and functional control centers, and then activate a crisis response center as needed. What is most important, however, is that levels of coordination are high with roles and responsibilities clearly defined.
7.Employ new technologies: There are many innovative technologies available to airports and airlines that can, in some way, enhance operational resilience “ many of them by improving situational awareness.
8.Be ready: It is important that airports and stakeholders exceed regulatory requirements with the additional scenario planning, training and testing seen as most relevant based on recent disruptions and expectations of future events.
A well-structured program that includes both desktop and physical drills with and without stakeholders should be actively managed and refined regularly.
9.Remember the passengers: When airlines fail to meet their obligations, best practice airports should be prepared to step in.
An airport passenger welfare plan, developed jointly with airlines to ensure it complements their own commitments, can clearly articulate roles and responsibilities.
A coordinated program for deploying trained airport staff into passenger care roles can also be an effective way to both limit passenger discomfort and protect the airport's reputation.
10. Continuously improve: At least annually, airports should have a structured process to review and refine contingency plans, both internally and jointly with stakeholders.
"Such reviews should account for experiences over the prior period to ensure the entire airport community is ready to respond in a manner that reflects past experience," stated Bejjani.
To conclude, addressing these recommendations would surely improve the operational resilience of any major airport in the MENA region. However, many of these recommendations require substantial and often transformational changes to their ways of working.
It is therefore important that each airport, along with its major stakeholders, assess its level of operational resilience and prioritize the most critical areas for improvement.
Most importantly, resilience initiatives should be part of a coherent strategy that addresses both the short- and long-term priorities of the airport as a business and the interests of the entire community of airport stakeholders.
About Booz & Company
Booz & Company is a leading global management consulting firm focused on serving and shaping the senior agenda of the world's leading institutions. Our founder, Edwin Booz, launched the profession when he established the first management consulting firm in Chicago in 1914. Today, as we approach our 100th anniversary, we operate globally with more than 3,000 people in 57 offices around the world.We believe passionately that essential advantage lies within and that a few differentiating capabilities drive any organization's identity and success. We work with our clients to discover and build those capabilities that give them the right to win in their chosen markets.We are a firm of practical strategists known for our functional expertise, industry foresight, and "sleeves rolled up" approach to working with our clients. To learn more about Booz & Company or to access our thought leadership, visit booz.com/me. Our award-winning management magazine, strategybusiness, is available at strategy-business.com. The Ideation Center, Booz & Company's leading think tank in the Middle East, is available at ideationcentre.com.
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