Airline Management

ASSIGNMENT 1/ Compare the differences between a start up airline Organizational Structure to the flag carrier structure. Which departments could be different between these two, and the reason behind it?

As a starting point into understanding the differences in the organizational structures between flag carriers versus new entrant airlines, I would like to first mention the classic pyramid or top-down structure consisting of top management, middle management & operating management. Where the flag carrier structure contains of all 3 segments, new airlines often eliminate the middle management section of the corporate structure, which results in ‘cost reduction’ & mainly to an ‘improvement in efficiency’. When work is cut down from the middle management; work done at the department and division levels, shifts upwards, increasing the roles & responsibilities with top management whereas more authority is passed to the lower & operating level of management.

In today’s environment it is important to avoid duplication of work structures, improve ‘internal communications’ and to create a flexible corporate structure that can expand or contract if necessary, without harming the business.

This is exactly what new start-up airlines are offering to the industry. They mostly have a smaller management team initially, which provides them to be more effective, where flag carriers have a larger management team mostly ineffective due to the lack of communication-lines of communication are long between departments-& have more huge numbers of staff (more for political reasons, than commercial)- which tends to assume a remoteness from the individual, the decision making process is complex, as the more complex the roles, the more people are required to meet them.

New start-up airlines have the advantage over flag carriers, as being able to tailor a corporate structure that best ‘fits’ the organization. As authority is delegated, responsibility is enhanced with...