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Report of Air Asia's Crisis and Continuity management ...

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AirAsia Flight QZ8501 Student ID: 21513094 01/05/2019 AI507 Airline crisis and continuity management

AI507 Airline crisis and continuity management

Student ID: 21513094

Summary Business continuity is important for an organization to remain resilient during a disaster. The effectiveness of business continuity depends on an organisation ability to research for the right resources. When a crisis or disaster takes place a management plan needs to be followed to deal with situations correctly. As the aviation industry is very susceptible to disasters, a lot of research and funding by airlines go into disaster plans to keep them contingent. One airline's disaster management plan which can be evaluated effectively is AirAsia following the events from flight QZ8501 after it crashed into the Java Sea. The Jacques (2007) model can be used to show a non-linear sequence of the ineffective actions the airline took before the crash unfolded such as poor maintenance, and how effective the company reacted in cleaning up the mess with the help of Flink's (1986) model. In Flink's (1986) model it shows a more linear process in how effectively AirAsia dealt with the incident from being transparent at the start of the investigation and taking full reasonability and compensating families at the end. Furthermore, with the correct flow of information being key for any investigation to run smoothly, AirAsia is able to show successful communications method between the organisations, public and the media by keeping everything transparent and clear. However, with improving communications between the private emergency services in Indonesia would make the investigation more secure and effective.

AI507 Airline crisis and continuity management

Student ID: 21513094

Table of Contents Introduction...................................................................................................................3 Airline crisis and continuity management.....................................................................3 Disasters...................................................................................................................3 Disaster management plan.......................................................................................4 AirAsia.......................................................................................................................6 Conclusion..................................................................................................................10 Recommendations.....................................................................................................10 Reference List............................................................................................................13

AI507 Airline crisis and continuity management

Student ID: 21513094

Introduction It is important for airlines to have good continuity of policy in both hot and cold cognition crises. Therefore, this report will cover how business design a disaster management plan based on probability, management, and impact. With this knowledge, this report will show how effective AirAsia disaster management plan was from Flight QZ8501 crash. Jacques (2007) issues and crisis management relations model and Flink's (1986) crisis management model will be used to understand and evaluate the actions AirAsia had taken before and after the event. Furthermore, this report will show the brand restoration stages for AirAsia after the events of the crash and demonstrate the communications method AirAsia used to keep the investigation run smoothly. Lastly, this report will give recommendations on how AirAsia and the emergencies services could have improved in their disaster management plan to make it more effective. Airline Disaster management

Airline crisis and continuity management Disasters Disasters occur all the time around the world therefore, it is important to be prepared for an incident (WHO, 2019). The World Health Organisation states that a disaster is an incidence that disrupts a normal condition and causes damage that exceeds the capacity of who's affected (WHO, 2019). In aviation, a disaster is defined by ICAO (2019) as an occurrence that happens with an aircraft which causes:

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

a person to be seriously or fatally injured

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the aircraft faces damage or structural failure

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the aircraft become inaccessible or missing.

AI507 Airline crisis and continuity management

Student ID: 21513094

Disaster management plan Business continuity is the ability for a business to withstand any disturbances to their normal operations (Anwitaman, 2015). Poor business continuity can lead to a recovery failure such as the 2016 Deltas system outage which caused over 2,100 flights to be cancelled as their continuity plan failed (Jansen, B. 2016). Therefore, it is important for an organisation to research for the right staff, resources, and education, with cost playing a huge part in the type of strategy they will use (Anwitaman, 2015). As the aviation industry is vulnerable to both global and local threats which can potentially lead to a disaster and crisis, airlines invest heavy amounts in disaster management. In order to understand how effective a disaster is dealt with; you must look at the disaster management plan (Jaques, 2007). The purpose of a disaster management plan is to reduce or if possible, avoid the potential losses from a disaster and provide the appropriate aid to the victims to achieve a successful recovery (WHO, 2019). When designing a disaster management plan, you must look at three main factors: 

Probability or likelihood

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Controls or management

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Impacts or consequences

The risk assessment model is a grid that combines the impact and probability of a risk/event and sums up a way on how to deal with the situation (ICAO, 2019). This then helps organisations prepare on what to include on their disaster management plan and also categorise the type of disaster.

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AI507 Airline crisis and continuity management

Student ID: 21513094

One example of a disaster management plan is Jaques (2007) issues and crisis management relations model. The issues and crisis management relations model is a non-linear sequence built from 4 segments which can overlap or happen simultaneously consisting of: 

Crisis preparedness

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Crisis prevention

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Crisis event management

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Post-crisis management

Jaques (2007) model is important in showing how organisations can be better equipped and prepared to respond to future disaster. Nonetheless then integrated approach of crisis preparedness and crisis prevention are not always circular process

Jacques (2007) On the other hand, Flink's (1986) crisis management model is a linear sequence built from 4 stages that occur one after the other that shows how an organisation recovers from a disaster, but Flink’s (1986) model does little to non on helping an organisation prevent a crisis. Nonetheless, both models of Jacques (2007) and Flink (1986) can

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AI507 Airline crisis and continuity management

Student ID: 21513094

be used stimulatingly for an organisation to strengthen their contingency and learn from past events.

AirAsia An example of a disaster which its disaster management plan that can be evaluated is AirAsia flight QZ8501 (BBC, 2015, Madi, M, 2014). On 28th December 2014, AirAsia flight QZ8501 had taken off from Juanda international airport at 05:35 WIB and was scheduled to arrive at Singapore Changi airport at 08:30 SST (BBC and other) (BBC, 2015). However, shortly after departure flight QZ80501 had lost contact with air traffic control and crashed into the Java Sea off Borneo (BBC, 2015). The 6year-old Airbus A320-200 was carrying 162 crew and passengers onboard. The causes of the crash were later stated by air crash investigators that a crack in an electronic module caused the system to send multiple warning signals to the pilots (Madi, M, 2014, Ninjek, K. 2015). In response, the pilots decided to reset the system unknowing of the implications that it would cause the autopilot to disengage. As a result, the plane rolled left and with miscommunications between the pilots they struggled to recover from the stall, leading to the aircraft to crash (Madi, M, 2014). The Jaques (2007) model can be used in the AirAsia crash to show how events unfolded. The first segment of the model refers to the crisis preparedness which can involve disaster training simulations and manuals. In the AirAsia crash, the captain and first officer had over 22,000 flying together and even an experienced engineer onboard (BBC, 2015). Furthermore, AirAsia had reported that before the crash the airline had already implemented improved pilot training (Ninjek, K. 2015). This shows that AirAsia had effective crew and training produces prior to the crash to deal with emergency situations and disasters. Nonetheless, AirAsia may have prepared the crew with flight training but did not train them on clear communications and teamwork (Ninjek K. 2015). As a result, this led to the captain and first officer not corresponding the right flight controls and crashing into the Java Sea. The second segment of the Jaques (2007) model is early warning scanning and risk management. The report from the crash states that the maintenance crew had 4

AI507 Airline crisis and continuity management

Student ID: 21513094

known previously 23 times of the warning signal going off repeatedly and the situation was addressed by resetting the system to get rid of the warning (Madi, M, 2014). Referring back to segment one of crisis preparedness, AirAsia could have prevented the disaster from the early warning, however, inadequate education for crisis preparedness led improper knowledge of maintenance crew of how to fix the problem correctly (Ninjek, K. 2015). Furthermore, Ninjek, K. (2015) states that: "Indonesia's aviation industry has been plagued with problems ... shoddy maintenance and poor oversight have all been blamed following a string of deadly accidents in recent years". This shows that the airline is not just to blame for the poor maintenance practices but the Indonesia aviation regulations for safety. This is further supported by ICAO (2019) finding in 2014 the Indonesian Civil Aviation Authority (ICCA) has more than 120 findings that don't comply with the international civil aviation safety standard, showing the country is facing serious lack of safety which multiple airlines are following. Thus, an update in regulations is needed to improve safety in Indonesia. Moreover, AirAsia flight QZ8501 was not permitted to fly that day including dozens of others, but due to uncontrollable growth of the air transport industry in Indonesia, the authority did not have enough facilities and money to prevent it from happing (BCC, 2015, Hakim, C. 2015, ICAO, 2019). Therefore, the crash could have been prevented if the airline followed regulation and had a better risk management plan. The third segment consists of crisis event management which occurs after the disaster and focuses on crisis recognition and system response. Jacques (2007) third segment can be seen to correlate with the first three stages of Flink (1986) crisis management. The first stage is the prodromal stage, which is when AirAsia top management is first notified by the event and the news of this event is kept inside of the organisations before the public is told so the company can activate their system repose and recognise what has happened (D4H, 2019). Stage two of Flink’s (1986) crisis management is the acute stage, where AirAsia management starts to address the situation to the public which consisted of notifying the families and other staff members to help deal with the situation (Hakim, C. 2015). For AirAsia families at

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AI507 Airline crisis and continuity management

Student ID: 21513094

arrivals were told to got to speak to staff members and press conference was organised hours after the crash (D4H, 2019). The third stage of Flink (1986) crisis management is the chronic stage which is usually the longest stage of the four where the investigations start, and the media exposes the information. Only hours after the crash the investigations started which led to the recovery of flight data, passengers and aircraft. The quick response in the investigation led to the flight data being recovered on the 13th January and 106 of the bodies being recovered (BCC, 2015, Hakim, C. 2015). This helped the case to close quickly and offer assurance to many of the victims' families about what happened. A part of Maslow's (1943) hierarchy of needs theory is that people need to sense of care, love, and belonging for their phycological needs. With airline acknowledging that the victim's family needs care and help, AirAsia set up emergency hotlines for victims' families, constant updates, and compensation as primary responses (BBC, 2015). This led to the successful brand image from families and the media when dealing with a crisis. Furthermore, AirAsia reassured traveling passengers that they are improving safety so they gain a sense of care from the airline and also helped nervous flyers by proving a sense of love in terms of high service levels so they will fly with the airline (Hakim, C. 2015.) Segment of 4 of Jaques (2007) model shows the post-crisis management of an event which Flink's (1986) fourth stage of resolution correlates with. The resolution stage is the final stage of Flink's (1986) model and is about when things begin to come back to normal and the situation is faded out of the spotlight. According to the Indonesia government, tourism was badly affected after the crashed occurred with 3 of their major airports having a 5% or more decline (Tempo. 2015). However, with the investigation complete and the accident fading out of the media, tourism soon picked up back to normal (Tempo. 2015). However, with the Indonesia government still not improving aviation regulations after the incident, ignores a crucial part of segment 4 of Jacques (2007) model where the organisation learns to modify and evaluate what has happened. It was only a year later that ICCA made minor improvements to the industry.

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AI507 Airline crisis and continuity management

Student ID: 21513094

Another part of segment 4 and the resolution stage is brand recovery. AirAsia reputation and image were damaged due to the fault of the incident being theirs. Benoit (1995) states that there are five major image restoration stages that a company takes when facing a crisis. Stage one is the denial of a crisis, or the company is not responsible for it. At the beginning of the investigation, AirAsia looked at the weather pattern in the java sea to see if it was a probable cause for the crash. With finds of very unique weather conditions, Tony Fernandes the CEO of AirAsia took to Twitter to tweet that the weather may have caused the crash and not pilot error or system failure (Asiaspeakers. 2019). This shows AirAsia followed stage one of denial. Stage 2 consists of the company dodging responsibility the event occurred but with minimal company accountability. When the report of the investigation started to come out it was said that there was a crack in an electronic module therefore, AirAsia took to Twitter again to keep the media updated that it was the aircraft's fault and not pilot or maintenance error (Asiaspeakers. 2019). Stage 3 by Benoit (1995), states that the company will reduce offensiveness and will neither admit nor deny that they are at fault. This occurred when the full report was released from the cockpit recorder stating that the pilot's miscommunication leads to the aircraft not being able to recover from a stall causing the aircraft to crash. Furthermore, it was also released that maintenance knew about the problem months before the event. This part of the stage leads to stage 4 of corrective action which is when AirAsia started to imply changes to their pilot and maintenance training to prevent a recurrence (Asiaspeakers. 2019). With AirAsia being at fault they moved on to stage 5 which consists of the company admit that they are the cause and asking the public for forgiveness. Evidence of this is CEO Tony Fernandes tweeting constant apologies and setting up crisis hotlines for families and pay out compensations, making the families feel looked after by AirAsia (BBC, 2015, Asiaspeakers. 2019). On the other hand, not all airlines have followed Benoit (1995) model. On 8th March 2014, Malaysia Airlines flight MH370 went missing and a couple of hours after Malaysia airlines offered a statement demonstrating they are reasonable and taking lead on the investigation (Warsihantari, N. 2018). Even though it damages the brand's reputation of safety and security, it gave them a better reputation and continuity method for recovering from the crisis (Warsihantari, N. 2018).

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AI507 Airline crisis and continuity management

Student ID: 21513094

According to structural functions systems theory, in crisis management the flow of information across all tiers of management and employees is vital (Asiaspeakers. 2019). Thus, communication is key to maintain transparency so that the correct information passed along (Grundy, M. and Moxon, R. 2013). In AirAsia case, the gold tier/ top tier management was constantly commutating with staff and media to make sure everyone knew what was happening (Asiaspeakers 2019). Information and updates about the case were not kept hidden to make sure the disaster clean up runs smoothly and quickly. Consent tweeting for CEO Tony Fernandes makes the public more reassuring that the company was trying their best to help deal with the crisis and display they have a good handle on the investigation (Asiaspeakers. 2019). However, the transparency between the instigators and the media did get too much to the point that photos of the deceased taken for the investigation was leaked online causing upset and rage from moaning families (Ninjek, K.2015).

Conclusion Overall, it is found that the crisis preparedness and prevention from AirAsia was poor and ineffective which consequently lead to the crash directly. Ineffective maintenance and the lack of education from the crew could have to been significantly improved to help prevent the disaster happing in the future again. Furthermore, it was also found that the lack of legislation and relaxed laws from ICCA, also contributed to crash. Nonetheless, the disaster management plan after the crash was much more effective with AirAsia having transparency with the investigators, media, and the public to help run the investigation smoothly and fade the disaster out of the spotlight with questions all answered. In addition, with the victim's family care being prioritised during the investigation this led to an effective way to rebuilt AirAsia imagine of care and love so the airline can operations and image can transition back to normal. Nonetheless, Recommendations to the disaster management plan could be made to make it more effective and prevent it from happing again in the future.

Recommendations

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AI507 Airline crisis and continuity management

Student ID: 21513094

Risk management is important to help detect an issue before it becomes a crisis and is also a part of early warning scanning. To increase the effectiveness of early warning scanning for AirAsia, they should introduce a Clickshare system followed by British Airways (Franklin, S. 2015). Clickshare system involves people in the crisis centre to wirelessly share numerous amounts of content like maintenance reports, crisis updates, and information. This consent can be shared in...