AIRLINE OPERATIONS: THE ROLE OF AN

ACCOUNTABLE MANAGER
AIRLINE OPERATIONS COURSEWORK A

APRIL 2011

By: Darwansjah Toligi

INTRODUCTION

Airline is a multi-million dollar business with a thin margin and heavily regulated. The
management team of an airline has to be competent in doing their job to keep the business
profitable. Airline business is very sensitive to external factors which can easily lead to
bankruptcy if not properly managed. It is essential that an airline operates efficiently and at the
same time maintaining safe and legal operations.

AIRLINE OPERATIONS

An airline requires operating licenses a mandated by the regulations. The required

licenses for starting an airline are depending on the country of nationality. In general, the
licenses are required to cover the areas of the commercial aspect, traffic rights and operational
aspect.

A solid business plan must be submitted along with financial projection to cover a
specific period of time. There are financial checks at a predetermined time in order to ensure
that the airline will be performing and has sufficient fund to cover its operations. There is also
legal and ownership requirements must be fulfilled depending on the nationality of the
organization.

Air traffic rights are governed by the individual state. For example, if an UK airline
applies to operate to the USA then an approval from both the UK and the USA must be
obtained. However, a traffic license issued with the EU is automatically allows an airline to
operate to all other EU countries without additional license.

A new airline is required to obtain an Air Operator’s Certificate (AOC). There are steps to
be followed in order to obtain an AOC. Before granting an AOC, the regulator must be satisfied
that adequate personnel and resources are available to ensure safe operations of airworthy
aircraft.

When applying for an AOC, the national aviation authority will observe the organization
structure of the airline and ensure that competent personnel are employed. The authority will
also require the adequacy of manuals and procedures are in place to ensure safe operations.

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 The organization structure of an airline varies from country to country depends on the
national aviation regulations. In terms of EU, the authority requires five principal post holders
who are responsible for the integrity of the Air Operator’s Certificate (AOC). The principal post
holders are:

1. Accountable Manager.

2. Head of Flight Operations.

3. Head of Ground Operations.

4. Head of Training.

5. Head of Maintenance.

There are other positions to cover the areas of Quality, Safety and Security.

THE ACCOUNTABLE MANAGER

An Accountable Manager in the context of aviation is to describe a person with an

overall corporate responsibility to ensure that all the operations and maintenance activities are
carried out to the standard required by the regulations. The Accountable Manager is single
individual who is the most accountable by law in respect to the any failings of an airline.
Therefore, the person who will take up a post of Accountable Manager must be acceptable to
the Authority.

The term Accountable Manager will usually mean the Chief Executive / President /
Managing Director / Director General / General Manager, etc. He usually sits on the Board of
the company. The Accountable Manager of an airline is responsible to the management of
human resources, financial aspect and safety. That is not an exhaustive list but those three
aspects mentioned are critical to the operations of an airline. As the person who has the overall
responsibility of an airline, the Accountable Manager should develop a strategic plan outlining
the directions of the organization. The plan must then be communicated effectively to all
personnel in the organization. Every individual in the organization ideally should understand the
objectives of the organization he/she belongs to.

The Accountable Manager of an airline has to ensure that only persons with the right
qualifications are employed. Furthermore, all operations personnel must be trained up to the
standards required by the regulations as well as additional standards required by the airline.
Human resources planning, training and monitoring of operational staff is crucial to the success
of an airline. The successful business of an airline can be seriously affected by its safety
reputation. People play a significant role to the safety of an airline. The Accountable Manager,
therefore, must take human resources issues seriously. Proper fringe benefit should be carefully
planned in order to protect the investment on training made to the staff and equally important to
maintain high productivity.

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 The Accountable Manager must be familiar with the operational nature of an airline. The
operational in this context includes: flight operations, ground operations, maintenance
operations, and flight training operations. All of these operations have specific standards to
meet in accordance to the national regulations or additional standards required by the airline.
Failing to meet the requirements not only in violation of the applicable law but it can also be a
safety issue.

In making sure that all operations are carried to the required standards, the Accountable
Manager is assisted by the Nominated Post Holders for Flight Operations, Ground Operations,
Flight Crew Training and Maintenance. In addition, a Quality Manager must be appointed to
monitor the compliance and the adequacy of procedures to ensure safe operations. The duties
of the Accountable Manager can be delegated to the Nominated Post Holders and the Quality
Manager however the Accountable Manager is the most accountable by law.

The basic product of an airline is transporting their customers safely. It is essential for an
airline to have a sound safety program to support the business. Safety by definition is a
condition where potential harm to people or property is reduced to acceptable level by a
systematic approach of hazards identification and risks management. The Accountable
Manager again is responsible for making the Safety Management System (SMS) available. He
should promote the freedom of information regarding hazards identification by all personnel and
to report it without having the fear of being punished. The Accountable Manager should have a
policy statement to support the program. He is also responsible of having all personnel of the
airline both operational and non-operational staff fully understand of the program making it as a
positive safety culture.

The day-to day duty of the Safety Management System can be delegated to another
person who is usually titled Safety Manager. However, the Accountable Manager retains the
final accountability of the airline’s safety performance.

The Safety Management System can be costly to have. The system has to be setup as
such that adequate training for all staff member in their respective occupations as well as SMS.
All of these are required in order to have competent personnel to conduct their job but also
providing them with a tool to recognize and isolated hazards which can lead to accidents.

The cost of accidents is enormous and can lead to bankruptcy. The Safety Management
System is a tool to support the business. The SMS should be incorporated into the daily
operations of an airline in order to determine the optimum level of safety protection versus
business efficiency. A minimum investment on safety protection can lead to accidents which can
lead to bankruptcy as a result of loss of assets, reputation, etc. However, overprotection can
also lead to bankruptcy as result of low productivity. The Accountable Manager is therefore
responsible to ensure that the SMS program is optimum for the mission of the airline.

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THE ACCOUNTABLE MANAGER AND FINANCE

It is obvious that the operations of an airline requires significant amount of fund. From
the application phase to start an airline, investors must satisfy the authority that sufficient fund is
made available for the safe and legal operations. There are many sources of finance such as:
Private Placement, Personal Loan, Sinking Funds, Sovereign Funds, Venture Capital and many
others. It is the responsibility of the Accountable Manager to secure the finance and together
with the management team to have an allocation plan of the fund.

CONCLUSION

Airline is a complex business that is capital intensive and heavily regulated. The duty of
the Accountable Manager or other title appropriately is to ensure that the operations are safe
and legal in accordance to the applicable regulations. In addition, airline as a business has the
objective to make profit. The Accountable Manager has to ensure all the above objectives are
met and adequately financed. It concludes that financial management is a key issue to a
success of an airline. It is essential for the Accountable Manager to have a good understanding
of the financial issue of an airline.

Works Cited

http://www.skybrary.aero. (2010, August 18). Retrieved May 19, 2011, from Skybrary:
http://www.skybrary.aero/index.php/Accountable_Manager

Buono, G. (2009). Quality Management in Airline Operations. London: City University London.

ICAO. (2009). Safety Management Manual. Montreal: International Civil Aviation Organization.

O'Donovan, M. (2011). Airline Operations. London: City University London.

Steiner, G. A. (1979). Strategic Planning. New York: The Free Press.

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