I have always been in love with aviation. I first flew on an airplane when I was a few years old and from a young age I remember thinking that airlines are only made up of the people you see; the flight crew, the cabin crew and the check-in agents. I never really knew what was “inside” an airline and how it really works. It somehow seems to be all of a mystery and a whole lot of secrecy. Fast forward 30+ years and being in the industry for almost 10 years, I still only know a small piece of the puzzle. This is what makes aviation so fascinating. There is always something new to learn everyday.
I hope this article will give some insight into what makes up an airline other than what you see from the outside. I will try to list out all the major functions of an airline and although not all airlines function will fall in the specific categories I have listed, most will have all of these functions.
Flight Operations
Boeing 777 Flight Deck
Flight Operations are not only about the people flying the airplane, the pilots, although a lot is about them from training them to rostering them and catering for their needs. Flight Operations also need to understand the performance of the aircraft and if they can be operated into specific airports or during a specific conditions. They work closely with the aircraft manufacturers and avionics suppliers to get new information about operating the aircraft and or issues that they need to resolve with regards to operating the aircraft. Rostering crew is very important as pilots are only legally allowed to operate and aircraft for a number of hours a day. They also need to rest for a specific number of hours before they could operate an aircraft again. Crew fatigue is an important area that Flight Operations need to manage especially for an international airline where crew need to cross time zones. Constantly evaluating flight crew performance is also an important function for Flight Operations.
Major functions: training, rostering, daily operations, dispatch, aircraft performance analysis (new routes/new aircraft/current aircraft), liaison with aircraft manufacturers for aircraft operations (how to fly), liaison with avionics provider (how to use them), liaison with local aviation authority (how to operate in other airports/states), pilot’s performance (to improve safety, training), recruitment, quality assurance
Flight Operations ensure that aircraft operates safely from point A to point B.
In Flight Services
Safety Video
In flight services are everything to do with the cabin crew. Yes, they do serve you tea or coffee but their main purpose in the cabin (by aviation regulation) is to ensure the passenger’s safety at all times. Although a great emphasis is also placed in service delivery as a product/service differentiation between airlines as airlines became more competitive.
Major functions: training (safety and service), rostering, daily operations, service delivery (new ideas/improvement), quality assurance
The main responsibility of the cabin crew is the ensure passenger’s safety at all times.
Airports
Boarding Gate
Airports usually mean the front line staff the airline hire at airports to provide services for the passengers and to ensure the flights can run efficiently and on time. They are the check-in agents, gate agents and baggage agents that all passengers see in the airport. They serve a big function to ensure the passengers are processed smoothly from check-in and onto the aircraft. They are the real customer facing and support group on the ground for the airline. They are usually under great stress when there are service disruption such as weather delays or aircraft delays where they need to deal with anxious passengers. Most of the time what’s causing the disruption is totally out of their control but they get the brunt of the blame.
In many airlines, some of these functions can be outsourced to a third party supplier. The ground staff you see may not be a direct hire from the airline. There are many reasons for airlines to do this as some airlines only fly to a destination once a day or less and it can be a huge risk in having a large pool of staff in an airport. Of course, this is all about costs as well. It is very common that the airline will hire an airport manager and a few staff but the majority of the customer service agents are from a third party ground handling supplier.
This also includes delivering the baggage to the aircraft and getting them out of it. The baggage operation on the ramp is mostly handled by a third party service provider. These people are not customer facing and the airline have less of a risk in service quality issues.
Turning around an aircraft from arriving and departing and being on-time is an art as well as a well planned operation where different parties need to work together and often in a tense environment. Aircraft only make money by flying; therefore, many airlines want to keep the time on the ground as short as possible and put the aircraft back in the air. Sometimes from arriving to departing the ground time is only 60 minutes or less. Think about what needs to be done in these 60 minutes; disembarkation sometimes with wheelchair passengers, changing of crew (sometimes), catering (food) to be offloaded and uplifted, cleaning, changing of passenger amenities (pillows/blankets), fueling, offloading baggage, upload baggage, security checks and crew preparing cabin before passenger boards again. In many cases the above involved many different areas and functions in the airline but usually the Airport staff must ensure that everything in the above goes smoothly as planned and on time.
Major functions; training, rostering, supplier management, daily operations, service delivery, airports facilities (lounges, baggage), on-time performance, recruitment, quality assurance
Ensuring passengers move through the airport efficiently from check-in to boarding the aircraft and turning around an aircraft on-time are the major responsibility of Airport department.
Major third party ground handling service providers: Swissport, Menzies, DNATA, SATS
Catering
Airline Food – Business Class
When we think of catering, we think about the food that we eat in flight but there’s a whole lot more. Everything from the logistics of pillow and blankets to toilet paper you use in the lavatory are all handled by the catering team. It can be a logistical nightmare for many airlines especially for those that fly all over the world. You can imagine an aircraft cabin is like a hotel room but a hotel is stationary whereas an aircraft travels to different airports where all these items need to be catered for and usually in a very short period of time.
Catering is often outsourced to a third party catering company. Many major airlines have their own catering company which is often a full subsidiary. This also allow the airline to provide catering services to other airlines and turning a cost center into a profit center.
Major functions: food on the aircraft, logistics (often around the world), service delivery, supplier management, quality assurance
Catering ensures passenger’s comfort are taken care of in terms of food and amenities offered in flight.
Major third party catering service providers: LSG Sky Chefs, Gate Gourmet
Engineering and Maintenance
Jacked Up Aircraft
Engineering is often a misunderstood function in an airline. Engineering actually covers a whole spectrum of work that is often legally bound by the aviation authority in giving an airworthy aircraft for the airline to use. A major responsibility for Engineering is planning when an aircraft, as bound by law, needs to be serviced and maintained regularly to ensure the aircraft is legal and airworthy to fly passengers. It is much more difficult than it sounds as there are a number of different requirement for specific aircraft checks and maintenance to be performed and often airlines have different aircraft from different aircraft manufacturers which require different checks at different time. All of this needs to happen when the airline is operating flying passengers everyday on schedule. Aircraft also need to be checked after every flight which is under the line maintenance function. Line Maintenance will deal with minor issues that can be fixed in a short time between flights and to ensure the aircraft is verified to be safe for the next flight. Maintenance also includes everything inside the cabin and to ensure it is functional and presentable; these include seats, in-flight entertainment system, lavatory and galleys. Because of this, many airlines have Engineering staff stationed in all the airports that the airline operates from. Although, many airlines will still use third party suppliers. An important function is also the recovery of aircraft if an aircraft is deemed not airworthy to fly. Usually aircraft parts need to be changed and shipped from the airline headquarters to wherever the aircraft is grounded at. Engineering holds large inventory of aircraft parts and inventory management is a huge function of Engineering as well.
A large part of maintenance is technical services where aircraft technical issues need to be solved be it from engines to avionics on the aircraft. Therefore, Engineering usually have close contact with aircraft manufacturers and avionics providers similar to Flight Operations.
It is not only about maintenance. A large part of Engineering is projects. Aircraft Projects includes ensuring new purchased aircraft adhere to local aviation authority requirements and also projects to return leased aircraft to lessors. Aircraft projects also involve aircraft retrofits where aircraft cabins are refurbished with new seats and/or in-flight entertainment equipment.
Many airlines outsource part or all of the engineering and maintenance work to third party service providers. Many major airlines also set up their own maintenance companies called MROs (Maintenance Repair and Overhaul). They provide services for their own airline as well as offering services for other airlines. Similar to catering, this can turn a cost center into a profit center for Engineering.
Major functions: maintenance planning, aircraft projects, aviation authority liaison, quality assurance (in compliance with aviation regulations), liaison with aircraft manufacturers, technical services/problem solving rectification, Inventory management, contract management, cost management, quality assurance
Engineering and Maintenance ensure aircraft are airworthy and functional for the airline to use when it is required as per airline flight schedule.
Major third party engineering and maintenance service providers: Lufthansa Technik, SR Technics, KLM
Airline Planning
Schiphol Airport 2004
Airline Planning is a very important function in an airline. They look at scheduling and where and when to open new routes and to new destinations. Scheduling itself is extremely complicated and the larger the airline the more complex it can get. With interline and alliances, this makes it even more complicated in planning schedules that involve connecting flights with other alliances or flights within the airline.
A part of airline planning also involves international relations and traffic rights for determining the future of the airline and new routes and destinations to open. Especially for international airlines, they cannot just choose to fly to a new country or destination. They are often bound by international trade policies and aviation traffic rights. Moreover, major international airports are often extremely congested and airlines need to sometimes buy slots or acquire slots from other airlines to fly to these airports.
Major functions: scheduling, new route planning, flight frequencies planning, aircraft type usage planning, traffic rights, airport slots negotiations
Airline Planning designs the schedule that the airline flies on and when and where to open new routes to ensure the airline will capitalize on passenger growth to existing and new destinations.
Airline Revenue / Sales
Airbus A320 Economy Class
As with Airline Planning, this maybe the most secretive function of an airline. How much to charge for a ticket? Secretive as in passengers always wonder how airlines set their prices. The person sitting beside you is most likely paying a different fare (higher or lower) than you are because airline tickets are all about fare classes. There are many people in the airline using sophisticated systems to crunch numbers. They will determine what price fare to set at which routes during what time or the year. Of course, nowadays computer systems makes the process much easier but Airline Revenue still need to look at historical data to manipulate parameters and to determine how best to allocate fare classes and also how many overbook passengers to accept on each flight. In the end of the day, this is how airlines make money; passengers paying for a ticket.
It is also not about general passengers that fly on a family trip but major airlines place huge emphasis on corporate sales. Corporate means companies that have deals with airlines so their employee will only fly on a particular airline when going on a business trip. Airlines will usually have special contract deals with their corporate customers. Airlines will also have special contract deals with travel agencies for bulk purchases. Airlines usually have sales office in every city/country they fly to.
Major functions: ticket pricing, market projection, historical analysis, market analysis, fare class distribution, corporate sales, travel agencies bulk sales
Airline Revenue and Sales determine how much to charge for tickets and how different fare classes are distributed on each flight. They also try to enlist corporate customers where they will give a large volume of regular business travelers.
Cargo
Boeing 787 Cargo Hold Door Opened
Many do not realize that passenger aircraft carries a lot of cargo as well and not only passengers’ lauggages. Most major airlines have a large Cargo Department where similar to passenger sales they need to sale cargo space in the aircraft to forwarders and shippers. It can get very complicated as various cargos can be sent on cargo airplanes and passenger airplanes. The cargo team needs to deal with a lot of different scenarios to help forwarders and shippers to get whatever cargo they need to ship to their destination on time and in one piece.
Major functions: cargo operations, cargo sales
Cargo can generate a lot of extra revenue for an airline other than selling seats on a passenger aircraft. Many airlines also have dedicated cargo aircraft.
Purchasing / Procurement
Airbus A350
Purchasing and procurement is a huge function that covers a large spectrum of the airline. From buying toilet paper to fuel to engines and aircraft, it is usually all under this section in an airline. The airline also uses a lot of third party suppliers and therefore contract negotiations and management becomes a huge part of running an airline.
Major functions: RFx (Request for proposals, quotations), pricing negotiations, contract negotiations, contract management, supplier management
Airlines need to purchase many things and utilize many third party suppliers in all the countries the airline flies to. Purchasing and Procurement is a very important function in any airline.
Finance
Just like any companies, Finance serves its important purpose in a company and especially those that are listed in the stock market. Each department in the airline need to plan for yearly budgets. Annual reports need to be prepared and balance sheet needs to be completed. They need to balance the books and ensure the airline is running a profitable business. Also, many airlines have finance lease of aircraft so they need to manage these leases. Many airlines also hedge fuel nowadays which also need to be managed.
Legal services are sometimes also under the umbrella of Finance in airlines while many airlines have in house lawyers but some are also outsourced to legal firms.
Major functions: Overseeing budget, budget planning
Balancing the books to ensure the airline is running a profitable business.
Annual Reports: British Airways, Lufthansa, KLM, American Airlines
Marketing / Products / Frequent Flier Program
First Class Seat
The airline needs to attract passengers and here is where the airline makes it happen. Knowing where, what and when to advertise is an art that the marketing team need to perfect. Product is also an interesting area where the branding of the airline can range from the color you see on the logo to the design of the aircraft seat. Airlines want returning customers and one way to achieve this is by having a good frequent flier program. Airlines can meticulously design its airport lounges and food and drinks that are served in the lounges and in flight to make these passengers happy. The passenger experience starts from the ground up to the air in the cabin.
Major functions: market analysis, create product differentiation, keep passengers flying with the airline, increase market share in new markets and existing markets
By using product differentiation and effective marketing campaigns, airlines need to expand and/or maintain passenger market share in current markets and new markets.
Customer Relations
Airlines can get a lot of complaints and in order to make passengers happy, airlines need to ensure they listen to passengers and give them appropriate compensation where it is appropriate. They want passengers to fly with them again and not with another airline.
Human Resources
People makes an airline and all the functions mentioned above not only need aviation professional such as Pilots, Engineers and Cabin Crew but expertise as well in Finance, Logistics, Contract Management, Purchasing professionals etc.
Security
Nowadays, security is of great importance especially for the airline industry where they fly to all corners of the world. This section includes everything that may be of a security concern to crew and aircraft as well as passengers in every country and city that the airline operates to.f
Environment/Sustainability
Airlines are like flying hotels and airlines consume an enormous amount of perishable and non-perishable items. Many airlines now publish annual environmental reports. The EU also have the Emission Trading Scheme for airlines that operates in EU and EFTA states.
Environmental/Sustainability Report: Lufthansa Group, British Airways, KLM, Singapore Airlines
Quality Assurance
Haneda Airport Toyko Japan
You may have noticed that in many of the operational function of the airline such as Flight Operations and Engineering, quality assurance is a major function. The local civil aviation department issues Air Operator Certificates or AOCs to airlines so that they could legally operate commercial aircraft and to run an airline. The airline needs to prove to the civil aviation department that the airline can operate safely. This is why quality assurance is so important where airlines usually run internal audits of their own operation. In many cases, it is a separate independent section in an airline that oversee each department’s audit process to ensure they conform to regulatory requirements.
IATA developed an Operational Safety Audit called IOSA which standardized the audit program based on the IOSA requirements across airlines operational function. Airlines need to prove to IATA that they have fully implemented IOSA measures and passed its recommended practices every two years. Airlines that passed the IOSA audits are listed in the IOSA Registry. This is an internationally recognized audit system where airlines in the IOSA Registry are proved to be much safer than those that are not.