AirAsia, you’re doing great, but ... – Rama Ramanathan

AirAsia flight QZ8501 is the third Malaysian-linked aircraft disaster this year. It is the first disaster involving a low cost carrier – a species which others look to as a model of success.

In the mid-eighties I was a young engineer working in the Malaysian factory of an American multinational. Like other corporations, mine was waking up to the evils of waste.

Mantras were injected into our meetings and conversations. The mantras included “Idle capacity is waste.” “Inventory is waste.” “Rework is waste.”

Programmes with names like JIT (Just in Time manufacturing), SMED (Single Minute Exchange of Die), 5S (Waste Elimination), AUI (Asset Utilization Improvement), CTR (Cycle Time Reduction), TPM (Total Productive Maintenance) and TQM (Total Quality Management) were taught.

It was all about cost reduction. Cost reduction goals were mandated. Cross-functional teams were formed to reduce costs using the tools associated with JIT, SMED, 5S, AUI, CTR, TPM and TQM. Reward systems were revised or created to motivate teams and individuals to deliver results. Internal communications such as videos and newsletters kept the stories flowing.

Stories were important teaching and motivating tools. South West Airlines (SWA) was a frequent case study. SWA was one of the pioneer low cost airlines. SWA was visionary. SWA had a BHAG (big, hairy, audacious goal) before Jim Collins popularized the term in his bestseller, "Built to Last".

SWA’s BHAG was to be the airline with lowest fares, frequent flights and exceptional customer satisfaction.

One of the technical enablers for achieving lowest fares and frequent flights was elegantly simple: minimize the time an aircraft spends on the ground; we in industry began overlapping shifts so that one crew could ‘handover’ to the next crew without stopping production.

To minimise the cost of maintenance, SWA standardized its aircraft; we began standardizing equipment; henceforth we would “single-source” and develop preferred vendors.

SWA flew only Boeing 737 aircraft. This meant SWA could minimize its inventory of spares and its cost of training, whether of ground or flight crew; we created teams to reduce inventories of spares.

To minimise cost and enable the lowering of fares, SWA removed frills such as fancy meals. At one time all you got for dinner on board a SWA flight was peanut butter crackers; we worked on reducing variants. We asked: do people really need shampoo in six colours and fragrances?

To maximise asset utilization, SWA aimed to keep any aircraft stationary on the ground no longer than 10 minutes (“the ten minute turn”). This meant commitment to swift completion of all required checks and maintenance upon landing and before take-off; we became ardent about “quick changeover.” For instance, we became able to switch from filling half litre bottles of detergent to filling two litre bottles within minutes – a task which used to take days.

The SWA story, particularly the ten minute turn, was told often in training sessions to show that it is possible to maximize asset utilization and reap gains without losing anything. Trainers pointed out that SWA could do with three aircraft what other airlines required four aircraft to do. And that SWA did it without annoying customers and without distressing employees.

SWA has a good safety record. SWA began flying in 1971. No one has died on an SWA flight due to a crash; no flights have gone missing. There have been a few incidents though. These include a plane over-shooting a runway, a plane skidding off a runway in bad weather, two de-pressurizations and emergency landings, a crash due to incorrect landing angle and even landing at the wrong airport.

Despite the incidents, amongst US based carriers SWA has the fewest complaints per number of passengers boarded. SWA is a much-admired corporation.

That is not to say SWA is not without controversy, or that it has never run foul of flight safety regulators. On 28 July 2014 the Federal Aviation Administration (FAA) of the USA proposed a fine of US$12 million against SWA for failing to observe established protocols during maintenance work performed on three aircraft, and for failing to ground the aircraft after being informed by the FAA of the failures. SWA refused to pay the fine. In November 2014 the FAA initiated civil proceedings against SWA. On a previous occasion SWA, after much negotiation, paid a fine of US$7.5 million.

Let me now return to AirAsia flight QZ8501. People generally like AirAsia, for, thanks to AirAsia, they can travel much. Also, there’s a ‘swagger’ about AirAsia; AirAsia has even been creative in the way they make announcements on board flights. They’re young, fun, exciting.

Unlike SWA, AirAsia operates in Asia. Formerly headquartered in Malaysia, in 2011 AirAsia moved its headquarters to Indonesia. Tony Fernandez, CEO of AirAsia, claimed the move was inspired by the fact that “Asean is based in Jakarta and Indonesia will be the largest economy in Asean in times to come.”

We who worked in industry winked at each other. We’d never seriously considered locating our regional headquarters, let alone global headquarters, in Indonesia. To put it mildly, Indonesia is not a paragon of effective enforcement of regulations; winking is routine in Indonesia.

A year later we learned that AirAsia “had issues” in an audit conducted by Malaysia’s Department of Civil Aviation (DCA). The DCA renewed AirAsia’s operational certificate for only six months – versus the ‘normal’ 24 months. The issues weren’t made public beyond a bland statement that operations procedures, practices and training were involved.

AirAsia is managing the media well. Tony Fernandez is being described very positively. He is credited not only with personal passion for enabling people to fly, but also for “a compassionate face,” “a personal touch” and for “being on the ground” in responding to the present crisis. Kudos to Tony and his Crisis and Media Management Teams.

I wish AirAsia and Tony well. I also wish the media and regulators will ask the hard questions. Remember SWA. Ask AirAsia what ‘issues’ resulted in the short duration renewal of right-to-fly in 2012. Ask AirAsia and industry insiders what ‘issues’ have been and are being discussed with regulators.

Make transparency one of your markers, AirAsia. We will love you all the more for it.

* Rama Ramanathan blogs at http://write2rest.blogspot.com/