Improving airline travel in Europe

Posted on June 11, 2013 by aviyer2010

An article in the Wall Street Journal (June 3,2013) describes the delays in Europe caused by the 37 countries with 63 air traffic control units that do not have a common authority. Improving performance requires coordinating landings and takeoffs with slot availability, but that requires independent authorities to coordinate who have no incentives to do so. The current approach is to invest in technology, but that is expected to result in little benefit in the absence of coordination. How should the benefits of improved performance be shared across the independent units to create the incentive for cooperation ? Should airlines be permitted to pay individual entities in the system to reap the benefits of improvement in the travelling customer’s satisfaction ?

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This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged airline, Consumers, Coordination, delays, Efficiency, Europe, Global, Supply Chain. Bookmark the permalink.

5 Responses to Improving airline travel in Europe

Pradeep Hiremath says:

August 26, 2013 at 8:26 pm

From the article, it does seem to be a case of re-alignment of incentives. With aviation being a super-competitive sector, it was certainly not possible for the European aviation companies to ignore this aspect any further. For such a high value-density sector, the improvements have begun in the right earnest. Yet, work needs to be done. An apt example of the Heathrow airport given in the article drives the point. A landing at Heathrow affects the the flight control at Netherlands or France. The Single European Sky project seems to be a classic case where incentives look to be misplaced or missing.

With privatization, all the terminals are looking for a bigger share of the pie. This, coupled with the bureaucratic hassles, promises a tough going ahead for European aviation. Though on the other hand, we gotta say that in due course, the airlines would understand how much they are losing due to this and when they inspect their supply chain, they would understand that it is just a case of re-alignment of the incentives to supply chain entities that needs to be taken care of.

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Rahul Dsouza says:

August 30, 2013 at 3:48 pm

Coordination is the key to solve this problem whether technology is involved or not. A centralized agency to coordinate among the 37 countries with 63 air traffic control units is a must. All of the air traffic control units and countries should have their representatives in the centralized agency. It should be made mandatory. The benefits of this system should be evenly distributed to the representatives. The representatives can then distribute their benefits to the respective countries/air traffic control units.

Delays should be considered as a risk. By having all the representatives in one agency, we are pooling in the risk.

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Christine Zhang says:

August 31, 2013 at 12:25 am

It seems the problem caused by the incentive system. If u do not give enough benefits for the person to do that, no one would like to do this kind of things that none of their business. So I think that in Europe , the airline industry should establish some incentive system. All the airline partners would share the benefits as well as the risk.There should be also some regulations for the delays.

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Andrew Tye says:

September 4, 2013 at 9:16 pm

Airlines already have the incentive to pay a centralized group to coordinate takeoffs and landings because improved efficiency would benefit them. As mentioned, this coordination will not happen unless individual entities have an incentive to do so. If the airlines have a great enough cost from the delays, they will be able to pay individual authorities to coordinate and still have a net benefit. In this way there is no redistribution of the “pie” but rather buy enlarging the pie and sharing it across the supply chain there is an incentive to coordinate and everyone benefits.

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Saurabh Srivastava says:

September 9, 2013 at 9:43 pm

Co-ordination is key in any supply chain 4Cs of supply chain audit i.e chain structure , capacity coordination and competitiveness.To improve efficiency airlines in Europe need to coordinate and this will come only when each of them have incentive to do . There should be strategy so that all airlines should contribute to increase the coordination and each one of them will contribute to enhance the performance of airline industry in Europe.

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