Dissertation Essay Example

Dissertation Essay Example Dissertation Essay Dissertation Essay Transport influences human access to different goods and services and enhances the capabilities to meet different welfare objectives. Transport improves human welfare by enhancing social inclusion whereby individuals travel to participate in social functions and social agenda (Lyons 2004:485). The transport sector has significant influence on other economic sectors globally, such as healthcare, employment, education, housing and business and industry. Improved transport enhances poverty elimination efforts by increasing access to income generating activities, education and healthcare services (Lyons 2004: 486; Currie 2010: 31). Classic public policy goals for transport systems in different countries have hefted beyond facilitating mobility and accessibility and encompass economic, environmental and social outcome elements which form the end result of governance goal in the new millennia (Currie 2010:31). Crustaceans and Boric (2007: 31) emphasize the role of transport in facilitating economic and social integration resulting from enhanced mobility and connecting communities to crucial social amenities and services such as education and health services. Under the economic dimension, transport systems are expected to minimize traffic congestion and promote dynamic urban economies. This is especially characteristic in the Northern American transport systems where cost-effectiveness is heavily emphasized in public transport systems (Currie 2010:32; Lyons 2004: 486). Environmental consciousness emphasizes the need for sustainable development in public transport systems as a means of meeting the Kyoto protocol emission targets while the social dimension calls for improved safety in public transport systems as a means of ensuring safe modes of mobility (Currie 2010:32). Lyons (2004: 490) emphasizes the need for sustainable development in the transport industry as a means of creating better quality life, currently and in the future. Moreover, stakeholders within the transport sectors are charged with the responsibility of fostering trade and competitiveness in order to stimulate growth and enhance resource efficiency. Public transport systems therefore play a significant role in national and the global economy. The world economy has become more globalizes characterized by increased economic integration and cooperation, cross-border interchange of policies, transfer of cultures, discourses of power, knowledge transfer and establishment of a global market. Globalization has significant political, social and economic implications on sectional economies (AY-Roadman Stonemason, 2006: 5). Abraham (2005:1) emphasizes the role of globalization in enhancing global integration, in aspects such as trade, national economies and capital flows by creating an autonomous global production, distribution and consumption system. This has led to trade liberalizing in different national economies as governments acknowledge the significance of the global economic system in fast tracking national fiscal growth and development. Computer influenced globalization by facilitating easier global transport and communication. The air transport sector has significantly benefited from integration of computer technologies for improving communication and efficiency leading to improved quality of life, economy and environmental impacts (Bimodal, 2012: 26). Air transport has enhanced easier transport and communication thus facilitating market penetration, increased trade and competition which have amplified efficiency and specialization leading to economic growth (Crustaceans Boric 2007: 31). Crustaceans and Boric, emphasize the role of globalization as a key driver of growth in the air transport sector. Cross investment across countries has created the need for enhanced labor mobility which is provided by air transport with airports providing connectivity and accessibility necessary for the growth of the modern society and economy. Further, airports have far reaching social and economic impacts on the set up regions characterized with easier air service accessibility and promotion of regional business. Airports serve as commercial entities and generate returns through on site economic activities such as force exchange, duty free shops, Jewelry shops, banks and coffee shops among other economic activities (Crustaceans Boric 2007: 34). The Air Transport Action Group (2005: 2) emphasized the economic and social benefits of air transport. The task force viewed air transport as the only means of transport that efficiently provides a worldwide transportation network required for global business and tourism. The air transport sector transports annually transports an estimated 2 billion passengers, 40% interregional goods and accounts for 40% of the recorded international tourism. The sector further accounts for 29 million employment opportunities generated through direct, indirect, stimulated and catalytic impacts on other economic sectors. The social impacts associated with air transport include improvement of quality of life by broadening the scope of leisure activities and human cultural experiences. Air transport provides a wider choice of holiday destinations by serving as an affordable way of vacationing in distant places. Through tourism and related benefits air transport assists in improving the standards of living and poverty alleviation by enhancing the social inclusion of remote areas in the economic, social and political agenda. These factors further leads to sustainable development (The Air Transport Action Group 2005: 2). The industry has been in the forefront in championing and taking steps towards environmental conservation through noise reduction measures, adoption of fuel- efficient engines and reduction of carbon emissions (The Air Transport Group 2005: 3). 1. 2 Background of the Study The business environment continues to be more challenging with time as characterized by increased competition and economic downturns among others. Modern corporations are challenged by dynamic aspects of the business operational environment for example markets, tight schedules, risks and uncertainties, technology and task complexities (Dillon 2002; 12). The challenges in the business operating environment require organizations to enhance efficiency and operational effectiveness in order to survive harsh economic times. This is achieved through adoption of novel technology for transforming business operations and ensuring continuous innovations for influencing business operations holistically (Sheboygan organizational competitiveness and serves as a stimulant towards creation of global institutions, attracting best employees, reinforcing corporate ambition and fostering the implementation of new ideas in order to break existing or perceived boundaries. The challenges in the business environment further demand strategic management based on identification of organizational goals, formulation of strategic policies and plans and employment of sufficient resources towards meeting organizational goals and objectives (Radian, Jake, Hassling Alumina 2009:402). Airports are not excluded from the challenging business operational environment and therefore require proper leadership and operational efficiency and effectiveness for survival in the air transport industry. Lyons (2004: 490) emphasizes the need for strategies for overcoming the challenges faced in the transport sector through adoption of tragic transport policies in the new age. Lyons further calls for upholding the social agenda or social capital in the political and public agenda with regards to the transport sector. The author emphasizes the need for developing transport in a manner which supports the society as dictated by policy aspirations and fostering environmental conservation through proper precautionary measures for preventing environmental degradation. This calls for strategic and Joined-up thinking between governments and transport experts in order to effectively link the transport sector with the needs of the society (Lyons 2004: 490). Currie (2010; 31) emphasizes the need for proper governance and management of public transport systems through the involvement of key stakeholders in development of transport policy programs through a coordinated approach where decisions are based on scientific knowledge. The public sector serves as the central mode of providing services in developing and develops nations (Chickening, 2013: 1). However, the public sector is accused of deeply entrenched inefficiency which has led to increased vaporization of public corporations. Public corporations are associated with inefficiency due to failure in Eng term management, poor quality services and protection by governments (Barter Harrison 2005: 137). The inefficiencies associated with public entities emanate from lack of clearly defined performance measures, poor evaluations, deeply entrenched corruption practices resource limitations and complexities in identifying the effects of adopted institutional reforms (Christine, Linton Command 2007:32). Most nations are unable to finance, develop or maintain national airports and view vaporization as an effective strategy towards development of new airports and maintenance of old ones (Craig, 1999: 1). Researchers have called for improvement of efficiency in the public sector. Public organizations and service providers worldwide are under increased pressure to advance efficiency through provision of improved and integrated services (Chickening 2013; 3). Christine, Linton Command (2007: 2) calls for improvement of efficiency in the public sector by reforming key institutional arrangements through diverse approaches such as increased devolution and decentralization, enhancing competitive pressures, changing workforce structures and adopting result oriented measures. Infrastructural developments including development of airports have en the liability of public agencies whose funding results from capital funds collected through taxation, issuing of public bonds and the operational costs offset by collected revenues or through the taxation system (Chickening 2013: 3). Viability of financing major projects through tax revenues (Chickening 2013: 3). Moreover, the inefficiency in the government sector has led to vaporization of airports, globally. Countries such as the I-J, Australia, Columbia, and Thailand have privatized their airports. However, in some countries governments still own most airports. In 2006, private investors owned and m anaged only 2% of all commercial airports in the world (Frost Sullivan, 2006, Para. 5). In some countries such as Australia, the airports are sold on long-term leases of 50 years (Keynote Beck, 2009, p. 02). In other countries such as the I-J, the airports are fully privatized by being listed in the stock exchange market. The vaporization has increased the profits in most countries prompting vaporization of additional airports (Musketeer Aphids, 2013, Para. 9). Mum, Adler and You (2006: 126) emphasize the shift from government operated airports to vaporization as a wide world trend with the exception of airports in the United States. Most of the airports in different countries operate autonomously with more airports expected to be privatized in the future (Craig, 1999:2). Craig, perceived the involvement of the private sector in development and operation of airports as a commonly accepted concept. Governments therefore sign agreements with development consortia for construction and operation of airports for a mutually agreed time period (Craig, 1999: 2). Chickening (2013: 4) argue that tapping private sector capital resources provides a means of promoting development of public infrastructure and facilitating the implementation of required capital projects. Vaporization of public enterprises acts as a significant policy in developed and developing nations which is placed in the context of broad-based approach for achieving economic De-regulation together with other strategies such as trade liberalizing and enhancing market access. The airport vaporization debate is based on pure economic necessities and changes in perceptions towards development policies as the private sector is viewed as more efficient and profitable (Christine, Linton Command 2007:1). Airports are also privatized as a means of enhancing easier access to private sector financing and investment (Mum, Adler You 2006: 126). However, the motives for airport vaporization and centralization differ across countries depending on the adopted approach towards institutional restructuring (Mum, Adler You 2006: 126). 1. 3 Problem Statement Vaporization of airports has significant operational and economic impacts. Studies have highlighted that government owned airports are less efficient as compared to privatized airports (Mum, Adler You 2006: 127). Cavalier and Corroborates (2008: 1) view vaporization as a means of reducing government budget deficits, fostering financial development and improving efficiency. It is agreed that privatized airports attain significantly higher operating profit margins as compared to government operated airports. This is attributed to engagement in non-aviation related activities and services which generate additional revenues. This is also associated with increased vaporization of government operated airports (Mum, Adler You 2006: 127). Mum, Adler and You (2006: 127) emphasize that government operated airports are run by bureaucrats with the aim of maximizing the objective function subjective to social welfare and personal agendas while privatized airports are strategically managed to enhance performance. This assertion has however been refuted by other researchers vaporization of airports in different areas of the globe (Christine, Linton Command, 2007:7). Cavalier and Corroborates (2008:2) attribute this to lack of conclusive empirical evidence on the impacts of change in ownership especially in relation to vaporization. Mum, Adler and You (2006: 128) assert the lack of conclusive research on the impacts of vaporization on airports. Cavalier and Corroborates (2008:1) further argue that improvement in productive efficiency does not imply improvements in locative efficiency. Moreover, complexities are experienced in disintegrating the effects of vaporization from the impacts of related fiscal policies such as liberalizing and regulatory changes (Cavalier Corroborates, 2008:2; Mum, Adler You 2006: 128). There is therefore need to close the research gap by investigating the impacts of vaporization on airports. 1. 4 Purpose of the Study Nations have adopted the trend of vaporization of airports with the aim of reducing government deficits, improving efficiency and fostering development (Cavalier Corroborates 2008:1; Christine, Linton Command, 2007:2; Mum, Adler You 2006: 128). The literature on impacts of vaporization on airports is however inconclusive (Cavalier Corroborates 2008:2; Christine, Linton Command, 2007:7; Mum, Adler You 2006; 128). This creates a need to explore the impacts of vaporization on airports. This study aimed to close the research gap by exploring the impacts of vaporization on airports. The study specifically focused on the impact of airport vaporization on the profit level, profitability, completion levels and aeronautical tariffs in the airline industry. 1. 5 Research Objectives To achieve the purpose highlighted above, the study was guided by the following pacific research objectives: 1 . To determine the impact of airport vaporization on the profit level of the airline industry. . To determine the effect of airport vaporization on the efficiency of the industry 3. To evaluate the impact of airport vaporization on the level of competition in the airline industry 4. To evaluate the effect of airport vaporization on the aeronautical tariffs 1. 6 Research Questions The study was guided by the following research questions: 1. What is the effect of the vaporization of airports on their profitability? 2 . How goes the vaporization of airports affect the operating efficiency of the airline industry? . How is the level of competition in the airline industry affected by the vaporization of airports? 4. What effect does the vaporization of airports have on the price of air travel paid by customers? 1. 7 Research Methodology The study adopted a mixed methods design incorporating both quantitative and qualitative designs. The quantitative design adopted an ex post facto research approach for examining the relationship between the vaporization of airports and the economic variables mentioned above. Quantitative data was collected from secondary sources such as books, Journals, newspaper articles, periodicals and web documents highlighting the performance of airports before and after vaporization. Government documents of countries which have done airport vaporization will also be used for the study. The ex facto research approach enabled the researcher to meet the study needs where accurate an experimental approach is not possible significant information on vaporization of airports and assist in establishing a simple cause-effect relationship between vaporization and the highlighted variables (p. 09). The ex factor research approach while non-experimental assisted the researcher to arrive at unbiased conclusions (Cottrell Mckenzie 2010: 9). The qualitative design was used to acquire primary data from 20 managers in the airline industry. The qualitative approach focused on acquiring the perspectives of managers within the industry on the impacts of vaporization on the mentioned study variables. The primary data was collected through a self administered semi-structured questionnaire. A qualitative design assists in capturing human feelings, attitudes and perspectives on the research phenomenon. The qualitative approach unlike the inattentive approach brought out the human feelings towards vaporization of airports. The mixed method design facilitated a holistic approach towards establishing the effects of vaporization of airports leading to balanced, unbiased and objective conclusions. 1. 8 Significance of the Study The research may be useful to policy makers in the government to determine whether it is economically advisable to privatized government owned airports. The research weighs on the costs and benefits that would result from such a move. The study may also inform strategic decision in the airline industry especially in nations which are anticipating vaporization of the airports by highlighting the effects of vaporization on profitability, competition, efficiency and flight prices. In addition, the research will assist private investors in knowing the impacts of vaporization on airline efficiency, competitiveness, profitability and cost of flight travel. The study may therefore inform the investment decisions of potential investors by informing them on the profitability of investment in airports. The study will also provide significant insights to students in management and especially aviation management on the effects of government vaporization policy on the airline industry. 2. 0 Literature Review Traditionally airports around the globe were managed and operated by governments as they form a significant part of the national aviation system and are perceive as public utilities (Marino 2008:5). Airport operation and handling activities were not traditionally perceived as above commercial activities (Marino 2008: 5). Airport operational activities were therefore under public authorities charged with the role of managing airport assets and property while other commercial aspect activities were outsourced to private entities. Although public ownership of airports is still being used in few parts of the world most airports around the globe have been privatized (Marino 2008: 5). Historically, governments around the globe are characterized with adoption of simple but revolutionary policy innovations. Airport vaporization is among such policies which have transformed the modulus operandi in airports around the globe. In 1987 Margaret Thatcher privatized the British Airports awakening the aviation industry to the idea that vaporization opened up the tremendous but untapped potential of revenue generation and efficiency gains in the here London Airports of Heathers, Catwalk and Standee, Southampton and three other airports in Scotland (Craig 1999:11). Since then British Aviation Authority has developed through investments in airports around the globe such as Ferrying airport, a major airport in Hungary and has also reflected on taking on trade agreements at Boston Logan International Airport and Baltimore-Washington International Airport through its subsidiary BAA USA (Boney 2007: 4). The vaporization of the British Airports Authority was sequenced by airport vaporization recess in other countries such as Austria whose Vienna Airport which entered the Vienna Stock Exchange in 1992 followed by other two Danish airports which were commercialese as Copenhagen Airports Ltd and entered the Copenhagen Stock Exchange by 1994 (Divan 1999:1). Belgium formed a corporation for owning the Brussels airport terminal while New Zealand privatized three international airports (Boney 2007: 4). The United Kingdoms Northern Ireland based Belfast International Airport was privatized while Australia privatized 22 airports to the countrys Federal Airport Corporation (FACE) in 1994. In Northern America, Canada created the Vancouver Airport Services (WARS) which is charged with the responsibility of managing 18 airports in the country, Dominican Republic, Greece Jamaica and Chile. By the year 2007, one or more of 39 countries airports had been privatized (Boney 2007: 5). In the United States airports are partially privatized as characterized by management and operation by local, federal or the central government corporations or independent airport authorities possessed by the local, federal and the central government. Airlines are highly involved in the management f airports within the United States, making the airports appear more privatized. Full vaporization is hindered by the dependence on federal grants emanating from the FAA airport improvement program. Full vaporization of airports within the United States can only occur where the private owners are willing and able to reimburse the federal grants (Boney 2007:5). 2. 2 Forms of Airport Vaporization Airport vaporization takes different forms such as direct control and management through civil aviation administration, through specific ministerial units, through congenial or municipal government levels, through specific and financially and operationally autonomous government bodies, through autonomous corporations established through special statutes and through companies established under company law (Marino 2008: 5). Vaporization of public airports to autonomous bodies is aided by sale of concessions to private sector entities such as developers, financiers or consortium of operators charged with the responsibility of operating or developing an airport for a pre-determined and mutually agreed number of years (Craig 1999; 4). Marino (2008: 6) characterize such as concessions as management entrants where the management of entire airport systems shifts to the private sector for a pre-determined period of time. The private sector corporations however pay a fee to the government through fixed professional fees, or percentages of the gross revenues or profits collected from the airports, proportions of savings resulting from use of the airports or from generated additional revenues (p. 6). Airports are also privatized through sale of concession to private sector entities charged with the role of developing and operating a system of several airports on behalf of stipulated