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In
some cases, teams-under strictly ordained deadline pressure
to hand in decisions to the trainers and dazed by information
overload-failed to make use of all the computerised analytical
assistance at their disposal. For some the reality dawned
when it was possibly too late into the seminar to alter
positively the results of a particular airline. Participants
in the most LCG recent simulation seminar near Frankfurt
were a typically mixed cross section. To a degree, their
varied levels of background experience with airline management
systems tended to complicate team operations, but all
saw the experience as beneficial and stimulating.
Among them were Philip Markham, field service regional
manager for Bombardier Aerospace; Marcel Fuchs, United
Airlines GM Germany, Austria & Switzerland; Louis A. Helstone,
CFO of Surinam Airways; Anthony Ponton, market forecasting
manager of Rolls-Royce; Luis Andre C. Patrao, general
manager of yield management at Varig, and Osama M. Farid,
CEO of Cairo-based Egyptian regional carrier Orca Air.
Starting point for the game is that the designated airlines
have been competing on the same routes for several years,
transporting passengers and cargo between home base Frankfurt
and Rome, Athens and London, as well as New York as the
only transatlantic destination.
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According
to the scenario, competing for market share has become
more difficult due to shifting market conditions, forcing
carriers to re-evaluate their strategy. Each team assumes
route management functions for one airline.
Operational responsibilities are divided among members
to distribute decision-making authority. Internal communication
skills become a major factor in achieving successful
team results since many decisions require joint efforts
and consensus.
GAMS
is played over several concentrated business periods
adding up four years (each time frame half a year).
Pressure builds up because actual working time is as
little as two or three hours for each business period.
After
setting route policies for a period, team members enter
decision data into forms on a PC, encompassing categories
such as market evaluation, aircraft, finance and personnel.
After each period an instructor picks up each team's
data-diskette and enters the decisions into the central
system for comparison with data from competing airlines.
The diskette is returned with updated market reports
and detailed figures reflecting each airline's performance.
After reviewing results of the previous business period,
the simulation continues with strategy moves for the
next round.
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Since
not all decisions, such as aircraft purchases for example,
are reflected in the period in which they're initiated,
business policy must be planned several periods in advance.
Interaction is also possible between the airlines during
the simulation; for example, they could offer to sell
aircraft to one another.Teams must consider a full range
of critical questions, for example: What is the long-term
strategy of the airline? Did you generate overbooking?
How much potential revenue did you loose? Do you see
opportunities to minimise overhead costs? Does your
marketing-mix reflect your overall strategy? What are
desired levels of market share, route capacities and
flight frequency? Which market segment should be the
main focus? Which planes will be out of service for
maintenance during the period? Should the fleet be reconfigured?
How should the team co-ordinate decisions? How does
your teamwork develop in view of increasing competition
and time pressure as the simulation exercise proceeds?
At
the same time teams have to take into consideration
fictitious "international news bulletins" that are handed
out unexpectedly by the trainers, indicating developments
than can impact operational decisions, such as steep
fuel-price increases, terrorist incidents, foreign exchange
shifts, etc. Peter Morrell pointed out that Cranfield's
Airline Route Competition Simulation, or ARCS, parallels
Lufthansa Consulting's program in some ways.
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