A Behavioral Framework for Managing Massive Airline Flight Disruptions through Crisis Management, Organization Development, and Organization Learning Dr. Tulinda Larsen Doctorate of Management University of Maryland University College www. tulindalarsen. com March 2013
Problem Statement Airlines continue to mismanage massive flight disruptions, despite government intervention, impacts on customer service, and related costs. • This study argues that by considering massive flight disruptions through a crisis management lens and layering organization development (OD) interventions with organization learning (OL), airlines can improve the management of events that result in massive flight disruptions to improve passenger satisfaction, reduce costs, and mitigate additional government intervention. 2
Behavioral approach Research Question: How can airlines adapt organization development (OD) interventions and organization learning (OL) processes to better manage massive flight disruptions to increase passenger satisfaction, minimize costs, and mitigate government intervention? 3
Methodology Evidence Based Research (EBR) and Systematic Review • Management research approach adapted from health care industry • A systematic review and analysis of existing research to identify gaps and to produce new knowledge – Scholarly research, case studies, white papers, dissertations, etc. • Four primary steps: 1. Establish research questions 2. Identify literature on the selected topic 3. Filter the resulting literature based on criteria, and 4. Evaluate the selected literature • I supplemented EBR through discussions with airline operations experts and visits to airline operations centers 4
The missing management perspective • Previous research needs a real-world management perspective • Massive flight disruption literature falls into four dimensions: – Economics and financial cost (Ball, et al. , 2006; Jenkins, 2010) – Tactical decision management (methods and tools) (Irrgang, 1995; Rogers & Hoyme, 2000; Zang, 2006; Jenkins, 2010; Hoyt, et al. , 2010: Bruce, 2011) – Robust schedule planning and recovery (Baker, 1995; Clark, Lettovsky & Smith, 2000; De. Armon, Wanke, Beaton, & Miller, 2000) – Impact on the travelling public (Ball, et al. , 1995; Mether & Rospenda, 2000, Marks & Jenkins, 2010; OIG 2000, 2001, 2007, 2008, 2010; GAO, 2011; U. S. Senate JEC, 2008) • This study focuses on behavioral dimensions to the airline management of massive flight disruptions. – Disruption management is a human process based on judgments in Ops Center and technology based decisionmaking tools 5
Multiple stakeholders are involved • The FAA is responsible for air traffic control in the U. S. – Controls aircraft from departure movement area to arrival – FAA, airports and airlines manage aircraft on the ground – Boundaries can be gray between FAA, airport and airline jurisdiction, particularly during massive flight disruptions • Airlines can manage how their operations prepare for, and react to, reduced airspace system capacity resulting from weather and congestion • Despite sophisticated decision support tools, no single model has solved the complex operational issues at the time of massive flight disruptions – Airlines poorly manage massive flight disruptions – Excessive cancellations vs. prolonged recovery 6
What are flight disruptions? There is little consensus about the definition of massive disruptions GAO Flight disruptions include delays, cancellations, long tarmac delays, and denied boardings. Office of Inspector General A flight is considered delayed if its actual gate arrival time is 15 or more minutes after its published scheduled arrival time. United Airlines Irregular Operations occur when unplanned flight disruption requires involuntary itinerary change [not] requested by passenger. IRROPS take place with little or no advance warning. American Airlines “[A]nything not on-time, even a single flight. But typically it means some amount of flights or portion of the network that is experiencing non-routine operations such as ATC, weather, security, labor, or mechanical issues. ” Airports Council International Extraordinary events, not falling under an Emergency Operation Category (e. g. crash, hijackings, bomb threat) which disrupt optimized flight schedules and negatively impacts the normal flow of passengers. 7
My definition of massive disruption A disruptive event that results in multiple flights being delayed, diverted to another airport, or canceled throughout the airline route network. These events are weather or natural disaster related and include snowstorms, thunderstorms, hurricanes, tropical storms, and volcanic eruptions. Does not include Emergency Events, such as crash, terrorism, highjackinsg, bomb-threat, etc. Massive flight disruptions negatively impact customer service, create additional costs for airlines, and have led to government intervention. 8
It all began in Detroit 1999 • In early January 1999, a blizzard blanketed the Detroit airport. • Thousands of Northwest Airlines passengers found themselves stranded on planes for hours -- some without food, water or functioning lavatories • The House and Senate conducted hearings and the Office of Inspector General investigated the customer service issues • Congress, the Department of Transportation (DOT), and the industry worked together to implement a voluntary program known as the Airline Customer Service Commitment The 1999 Detroit snowstorm kick -started airline mismanagement of massive flight disruptiona – and triggered regulatory intervention. 9
Voluntary programs did not prevent passengers from being stranded on aircraft : Date Airline Description December 29, 2006 American 100+ flights from DFW were diverted due to severe weather. Flight diverted to Austin exceed airport capacity. Passengers trapped. February 14, 2007 Jet. Blue Ice storm at JFK caused 355 canceled flights and 6 divert flights. 10 aircraft were frozen to the ground and passengers were trapped December 22, 2008 Alaska Snowstorm in SEA caused massive flight cancelations and stranded 9, 000 passengers. August 25, 2009 Express. Jet Thunderstorms and tornados in Midwest caused flight diversion to airport with no Continental support. December 24 -28, 2010 System Massive snowstorm causes flight cancelations and shut airports in the Northeast. May 29, 2011 American Eagle Bad weather in Chicago caused 15 flights with 608 passengers to be held for 3+ hrs, resulted in DOT Fine under new rules. Jet. Blue, American Early snowstorm forced flights to be diverted to Hartford where Jet. Blue and American Airlines passengers were trapped on aircraft for more than 7 hours. October 29, 2011 10
More examples of massive flight disruptions : Date Airline Description October 28– 30, 2012 System Hurricane Sandy shut down 9 airports and resulted in massive flight disruptions with more than 20, 000 flights cancelled. November 7, 2012 American, Delta, United, US Airways, and Jet. Blue Airways Nor’easter dumped snow on NY, NJ, CT, Boston and Philadelphia, disrupting operations and causing more than 20, 000 flight disruptions. December 26, 2012 American Airlines, Snowstorm Euclid disrupted travel in the Midwest and Northeast, and 2, 100 Delta Air Lines, flight cancellations. United Airlines, and US Airways 11
Mismanagement drove DOT intervention • • • Contingency plan for lengthy tarmac delays – Air carriers will not permit an aircraft to remain on the tarmac for more than three hours. – For all flights, assurance that the air carrier will provide adequate food and water no later than two hours after the aircraft leaves the gate or lands. – For all flights, assurance of operable lavatory facilities and medical attention, if needed – Assurance of sufficient resources to implement the plan – Assurance that the plan has been coordinated with airport authorities – Retention of records related to lengthy tarmac delays for two years – Customer Service Plan – Meet customers’ essential needs during lengthy tarmac delays – Self auditing of plan and retention of records with results made available to U. S. Department of Transportation – Notice and Contract of Carriage – Contingency Plan for Lengthy Tarmac Delays must be included in Contract of Carriage with air passengers Response to Consumer Problems – An employee is to be designated the advocate for passengers’ interests and is responsible for monitoring the effects of flight delays, flight cancelations, and lengthy tarmac delays on passengers. This employee is to be included in the decision-making at the time of Massive flight disruptions as to which flights are cancelled and which will be delayed the longest. Unrealistic or Deceptive Scheduling – Chronically delayed flight means any domestic flight that is operated at least 10 times a month and arrives more than 30 minutes late, including cancelation, more than 50 percent of the time during that month. – Chronically delayed flights are considered unfair or deception practice, an unfair method of competition, and are subject to enforcement. Source: USDOT Final Rule Enhancing Airline Passenger Protection (2009) 12
The stakes are high - $27, 500 per passenger • ORD May 2011: massive disruption that resulted in government fines • Textbook case of airport gridlock and management disarray – Aircraft held at gate, arriving aircraft had no gate, flight crews trapped on in-bound aircraft • Hefty $900 K fines imposed by DOT on American Eagle 13
Operations decision-making flow begins with whole airline involvement Decision-Making Organizational Level Vision, Objectives, Goal Setting Top Management CEO/COO/CFO/CMO Management Science Approach Models and Simulation Programmed Decisions SVP Operations Management Science Approach Operations Research Programmed Decision Making Non-programmed Decision Making Decision Support Tools Day-Of Individual Decision Making Rational/ Bounded Rationality Decision Making Judgment / heuristics Intuition Operations Center Mgr. Aircraft Dispatch/Flight Following Crew Dispatch Maintenance Coordination Airport Ramp Control Airport Staff/Services Passenger Services Examples of Decisions Operation style, e. g. Mainline, Low Cost, Regional, Charter Network Carrier versus Linear Route System Domestic versus International Fleet Planning Schedule Planning & Scheduling (at lower level in Marketing) Flight Operations and Management Maintenance Control System Crew Scheduling Load Planning Customer Service services Airport/Ramp Operations Network Operations Flight tracking Crew tracking Maintenance tracking Ground services coordination Passenger routings 14
Flights are planned 6 months prior to departure, then handed over to Operations Center 6 Months Prior To Departure Marketing Finance Product definition, Markets, Pricing Passenger reservations and sales Costing, Profitability 48 hours prior to Departure Operations Center Operations Planning Day of Flight Resource Allocation, i. e. aircraft, crew, airport 15
Airlines are multifaceted Extremely complex operations eting – Numerous individuals performing interconnected tasks Mainten – Requires a combination of technology and human decision-making – Crew members out of place or limits – Aircraft in the wrong place – Disruption to maintenance – Impact to subsequent flights Airc Repo raft sition e d ance Mainten Delayed eting – Passenger misconnects ance ffic ra ol r T tr Ai on C Interconnected factors resulting from massive flight disruptions include: ge ss en nce Fina Airline Flight Schedules Mark • Pa Aircra Avail ft able Mark – A “symphony orchestra” (Baker) g tin • rke Ma • rs Massive flight disruptions become responsibility of Operation Center w d re dule C e h sc Re Disruption Weather Natural Disaster Crew Airp orts ’ rs ge l n se ve d as Tra pte P u sr Di Airline Disrupted Flight Schedules Lost Revenue; Increased Costs Airp o Gro rts/ und Ser vice s 16
Operations Center is focused on day-of-operation Preplanned Schedule Aircraft Scheduling Operations Center Maintenance Operations Control Center Crew Scheduling (MOCC) Station Operations Control Center (SOCC) Passenger and Payload Flow 17
Airlines have different names for Operations Centers • American is transitioning to Integrated Operations Center (IOC), renovating existing DFW infrastructure to include maintenance, currently in Tulsa – Operations center is moving to back-up facility January 2013 during construction • Delta recently renovated the Operations Control Center (OCC) in Atlanta following the merger with Northwest – State-of-the-art facility employing best practices of both airlines • United recently opened its Network Operations Center (NOC) – 52, 000 sq. ft. facility in Chicago’s Willis Tower – Moved Continental’s operations to Chicago • US Airways Operations Control Center (OCC) is in Pittsburgh – Will be moved to Dallas following merger with American 18
Recovery from massive flight disruptions should not be solely Operations Center responsibility Calm in Other Departments Massive Flight Disruption Stress In Ops Center 19
Massive flight disruptions qualify as crises • Crisis is “any situation that has the potential to affect long-term confidence in an organization or product, or which may interfere with its ability to continue operating normally” • Despite differing definitions of crisis, there is consensus on its major characteristics. These include: – Events that have low probability of occurring, but have a major potential impact on an organization and individuals both inside and outside the organization – There is uncertainty about resolution; and – There is a limited time in which to act. • Crisis management is a “systematic attempt” for management to prevent a crisis and mitigate impacts 20
Carole La. Londe Framework My study adapts La. Londe’s crisis management framework to airline management of massive flight disruptions, combining methods of Crisis Management and Organizational Development • • COORDINATION/ TECHNO-STRUCTURAL Crisis Management • Communications • Collaborative structures OD Intervention • Mainly techno-structural • Networks/Collaboration PLANNING Crisis Management Assess capacity to prepare Risk Analysis OD Intervention Integrate into corporate strategy Include all stakeholders CRISIS RESILIENCE - Individual - System LEADERSHIP Crisis Management • Sensitive to external environment • Rapid decision-making and risk-taking OD Intervention • Leadership development • Coaching & Training CIVIL SOCIETY Crisis Management • Civic behavior • Role of media OD Intervention • Community Development Source, Lalonde, 2011 21
Four principles of crisis management • Planning and preparedness – Risk assessment – Triggers – Developing crisis management plan – Prepare and train personnel – Simulations – Allocate resources – After event assessment • Leadership – Sensitivity to external environment – Adaptive to stages of crisis (pre-, during, post) – Foster rapid decision making – Courage to take risks • Coordination – – Communication, internal & external Development of collaborative structures Development of technology solutions Crisis cells with multidisciplinary resources and expertise • Civil Society – Accounting for citizen and government involvement, impacts, and responses – Recognizing role of media 22
OD and OL applied to Crisis Management • Organization development (OD) is a system-wide application and transfer of behavioral science knowledge to planned development, improvement, and reinforcement of the strategies, structures, and processes that lead to organization effectiveness – Both “culture and operational soundness” – A set of methods to “address issues of changes, process, and relationships” – Open systems approach • Organizational learning (OL) is the process of creating, acquiring, and transferring knowledge, and at modifying behavior to reflect new knowledge and insights – Integration of the acquired knowledge and lessons learned – Double feed-back loops to address core issues – Goal: Avoid repeating same errors and minimize impact 23
This Study Expanded Lalonde Framework Crisis Management Principles P 2 P 1 Organization Development COORDINATION/ TECHNO-STRUCTURAL PLANNING Quantification and plan for vulnerabilities based on probabilities of massive flight disruptions Crisis cells Collaboration across departments LEADERSHIP P 3 Top management commitment to fostering collaboration across the airline and innovation Real time situational analysis Collaboration with between tools with integration to single Crisis Cells, rapid decision platform planning and Op Center; making, risk taking based on Integration of Op Center with Op Research tools other departments CIVIL SOCIETY Passenger understanding through communication Communication with media Operate within 3 -Hour Tarmac Rule regulatory constraints P 4 Organization Learning Feed-back loops Learning from previous massive flight disruptions Learning from preparation and response to Emergency Events Tools to understand the root Fostering open systems and culture of innovation causes Learning from tools from Encouragement of knowledge transfer other departments Culture of innovation Learn from customer experience Learn from government hearings and studies P 6 P 5 RESULT RESILIENCE Individual/Controller; Expertise; Innovative; Resourceful System/Airline; Responsive; Focused; Learning ü Improved Customer Satisfaction ü Minimized costs ü Mitigated government intervention 24
Propositions • Proposition 1 Planning – From an OD intervention perspective, planning includes the quantification and assessment of vulnerabilities using probabilities. From an OL perspective, planning includes identifying trigger events using the review and analysis of previous events. • Proposition 2 Coordination- Techno-Structure – From OD intervention perspective, coordination includes collaboration across different departments and the development of technology solutions (e. g. , situational analysis). From an OL perspective, coordination includes the creation of a learning environment that fosters innovation. • Proposition 3 Leadership – From an OD intervention perspective, leadership includes training and coaching. From an OL perspective, leadership includes fostering a culture of innovation, learning, and knowledge transfer. • Proposition 4 Civil Society – From an OD intervention perspective, civil society includes improving communications with passengers, the public, and governments. From an OL perspective, civil society includes learning from customers and complying with governmental rules (e. g. , the 3 -Hour Tarmac Rule). 25
Propositions 5 & 6 • Proposition 5 Resiliency – Adapting OD interventions with OL processes leads to resiliency. Resiliency for an individual is the ability to leverage his or her expertise by being innovative and resourceful in addressing the issues that result from a crisis or unexpected-yet-recurring events. Resiliency for an organization is the ability to return to normal operations as quickly as possible with the least impact on operations, customers, and resources. The organization needs to be responsive to triggers and changes in the environment, to focus on the situation, and to be open to learning from the event. • Principle 6 Sustainable Results – Proposition 6 is essentially the feedback loops within the conceptual framework moving OL processes back into planning, leadership, technology coordination, and civil society to ensure that the changes driven by crises or unexpected-yet-recurring events that lead to operational disruptions are sustainable. 26
Adapted to airline operations management • Planning and preparedness – – • Coordination and Techno. Structure – Integrate decision-making tools (aircraft, crew, airport facilities, passengers) – Strive for real-time situational awareness for all resources – Collaboration within Operations Center and with other departments Assess vulnerabilities Identify triggers Collaboration across airline Double-loop assessment following massive flight disruption • Leadership – Top management commitment to fostering collaboration across the airline and innovation – Crisis cells with multidisciplinary resources and expertise – Rapid decision-making and risk taking • Civil Society – Communicate with passengers • Social media, direct text/email, announcements – Communicate with media • Social media, direct text/email, announcements – Government 27
Planning and preparedness • Quantify and develop a strategic plan based on probabilities of massive flight disruptions • Develop entire airline strategy around crisis management tools Seasonality of Massive Flight Delays 21% 8% 9% 6% 6% – FAA System Ops Calls – Historical analysis of weather patterns – Action plan based on triggers – Risk-taking to preempt “heroic” actions 5% 3% – Include all stakeholders • Identify triggers 9% Jan Feb Mar Apr May Jun Jul Aug 4% Sep Oct 6% 3% Nov Dec Source: GAO, 2011 Average for 2001 -2010 There about 60 days a year in the U. S. when flight delays potentially result in massive disruptions. More than 50 percent of disruptions in flight operations are clustered in 20 days each year Airlines should adjust planned schedules and resources (aircraft, crew, airport facilities) accordingly 28
Organization Learning through feedback loops • Collaboration between other departments and Operations Center • Rethink operational models, routines, and cultures – feedback! Marketing Finance Feedback Loop Passenger impacts, assessment of schedule planning Revenue and cost impact p oo L k c ba d e Fe Feedback Loop Operations Center Operations Planning Post- Disruption Improvements to resource allocation, i. e. aircraft, crew, airport 29
Socio-technical – Integration of technology with human decision-making, including other departments • Integration of resource decision-making tools – – Aircraft maintenance programs Crew scheduling Passenger re-accommodation Real time situational analysis • Collaborative integration of Operations Center with other departments – Massive flight disruptions are not just an operations center problem – Impact entire airline Finance - Revenue metrics - Cost metrics Marketing Data - Passenger itinerary and rebooking - Passenger satisfaction - Competitive market position Operations Center (OC) Maintenance Operations Control Center (MOCC) - Aircraft maintenance restrictions Operations - Aircraft and crew positioning - Crew restrictions Station Operations Control Center (SOCC) Passengers on-board Ground service availability – gates, catering, baggage, fuel 30
Commitment to finding new recovery strategies must start with top management • Commitment to fostering collaboration across the airline • Corporate culture to treat massive flight disruptions as a crisis • Create “Massive Flight Disruption Crisis Cells” – Draw from across the airline – Lessons learned from previous massive flight disruptions – Identify resources for response – Debrief and learning after event • Coaching and training on rapid decision making • Assume some risks – Use OR resources to respond to triggers and preempt “heroic” solutions once massive flight delays develop • Learn from airline Emergency Response Programs for catastrophic events, i. e. terrorism, crash, high-jacking, bomb threat, etc. 31
Civil Society • Passengers – Gain passenger understanding through communication – Leverage technologies for direct passenger communications • Text/email/phone, social media (Face. Book, Twitter) • Communicate with media • Stay ahead of the news – Social media, direct text/email, announcements • Government and regulators • Observe regulatory limits • Situational awareness • Documentation 32
Summation PLANNING Quantification and strategic plan for vulnerabilities based on probabilities of massive flight disruptions. Collaboration with between planning and Operations Center COORDINATION/ TECHNO-STRUCTURAL Collaborative integration of Operations Center with other departments Real time situational analysis tools with integration LEADERSHIP Top management commitment to fostering collaboration across the airline and innovation Crisis Cells, rapid decision making, risk taking based on OR tools RESILIENCE Individual/Controller Expertise Innovative Resourceful System/Airline Responsive Focused Learning Improved Passenger Satisfaction Minimized costs Mitigated government intervention CIVIL SOCIETY Passenger understanding through communication Communication with media Operate within 3 -Hour Tarmac Ruler regulatory constraints 33
Findings Crisis is a Catalyst for Change • Organization development provides tools to implement change • Organization learning provides culture for sustainable change Airlines Do Not Address Massive Flight Disruptions as a Crisis • Massive flight disruptions are isolated to a single department issue, i. e. , operations • Risk-adverse: Operations staffing have deep operations experience, but no experience across airline departments
Answer to research question “The resources required to manage massive flight disruptions are enormous and not practical to have on stand-by” (Russ Chew) Hence the need for a behavioral management approach • Massive flight disruptions are viewed as an operations problem, but they’re actually a crisis involving the entire airline – Solution: Collaboration across the airline – Behavioral approach: Crisis management tools integrate with Organization Development interventions • SOC staff have deep but narrow experience in airline operations and are risk adverse – Solution: Develop a culture fostering innovation, which includes other airline departments – Behavioral approach: Organization Learning interventions 35
For a copy of dissertation: Tulinda Larsen tulinda@tulindalarsen. com www. tulindalarsen. com Tel: +1 443 -510 -3566 Twitter @Tulinda. Larsen Thank you to Tim Antolovic, AA, Jack Keis, Metron Aviation, Tim Jacobs, US, Stephen G. Smith, US Office of Inspector General, Dr. Darryl Jenkins, American Aviation Institute, Josh Marks, mas. Flight, Dr. Carole Lalonde, and my dissertation advisor, Dr. Michael Evanchik for their invaluable support and guidance in my research and in developing my framework.
Literature Review 1. Crisis Management 3. Organizational Learning 2. Organizational Development 4. Airline Management of Flight Disruptions 37
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