Business Continuity: Air New Zealand

5 Feb

In one of my previous blog posts I discussed the importance of business continuity management with regard to the airline industry. This blog post will expand on this further and look at how Air New Zealand manage their business continuity.

Air New Zealands facilitates more than 470 services every day, to 50 destinations both domestically (26) and internationally (24). Air New Zealand also provides consulting, engineering, ground handling and training services and subsideries of the airling include booking systems, retail, travel whole sale and regional and international airlines.  (1. Halliwell, 2007)

The airline industry is one of the most volatile industries in terms of distruption. Weather disruptions and natural disasters can have a huge impact on this industry, not only in terms of disrupting flight schedules but also in terms of staff and passenger safety. New threats have also emerged in recent years; terrorism has become a serious concern for most airlines operating today. In 2001, after 9/11, Anset, an Air New Zealand subsidiary went into receivership and Air New Zealand its-self came close to shutting down. (1. Halliwell, 2007)

New Zealands location means that Air New Zealand is faced with a number of specific threats. These include

  • Active Volcanos
  • Earthquakes
  • Many of New Zealands airports are located near the ‘Pacific Ring of Fire’
  • Unusual weather events
  • Fuel supply risk

(1.    Halliwell, 2007)

How did Air New Zealand Implement BCM?

In 2001 it was decided that Air New Zealand needed to implement a Business Continuity Management (BCM) Process. This involved a number of steps.

  1. An Operational Risk and Environment Department was given responsibility for implementing BCM. Their aim was to promote business continuity throughout the organisation.
  2. The airline defined a BCM policy with identified and assigned responsibilities and objectives.
  3. Accountabilty for the BCM was the responsibility of senior management. Each individual business area and manager needed to influence the BCM.
  4. The chief information officer managed the BCM, with IT business continuity being introduced at a later stage.
  5. In 2002 the safety department within Air New Zealand officially established the BCM.
  6. An updated BCM policy was approved, awareness across the organisation was established and plans were made to address evident internal and external risks.

(1.    Halliwell, 2007)

What other reasons affected their decision to implement BCM?

Besides natural disasters, weather disruptions and terrorist threats there are a number of other reasons why Air New Zealand implemented a BCM programme.

  • It makes business sense
  • Ensures customer satisfaction, due to better service provision
  • The continued increase in globalisation means that quiet time for the airline is extremely limited. This puts pressure on system maintenance in particular.
  • A BCM limits costs in the event of an incident due to the organisation being able to respond at a faster rate.
  • Since the organisation has such a huge reliance on technologies, this must be protected and contingencies need to be accounted for.
  • Aviation regulations in New Zealand mean that stakeholder value needs to be preserved.

(1.    Halliwell, 2007)

The airline industry is hugely affected by distruptions, and Air New Zealands BCM process covers risk reduction, readiness, response and recovery time, this system thus provides the organisation with resilience during the occurrence of an incident. (1. Halliwell, 2007)

Halliwell, P. (2007), ‘How to distinguish between ‘business as usual’ and ‘significant business disruptions’ and plan accordingly’, Journal of Business Continuity and Emergency Planning, Vol. 2, No. 2

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3 Responses to “Business Continuity: Air New Zealand”

Trackbacks/Pingbacks

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