Business Crisis Management in the Case of Commercial Air Crash Strategic Management of Air France

Eva Than Higher Diploma in International Hotel and Tourism Management HTMi Switzerland

Introduction
Air France had been known as the national airline of France for several decades before it was joined with KLM, a Netherland based airline. However, both companies are running independently. Air France is also known as a one of the founders of SkyTeam, a global airline alliance. According to SKYTRAX (no date), Air France ranks 4-star in terms of products and service quality, which obviously has led to a high level of expectation in pleasing and dealing with customers issues, from the smallest complain to a big crisis such as terrorism, air crash, etc. Crisis radically redefines the companys reputation (Gilpin and Murphy, 2008). The high vulnerability of aviation industry is illustrated by several complex accidents (Ray, 1999). Cabur (2010) demonstrates the worst crisis to an airway is a fatal air crash. While some airlines in the past failed to manage crashes leading to shutting down business (Thompson and Martin, 2010), others did not only control the crisis but also quickly recover the companys image by showing effort to rebuild its reputation (McDonald and Crawford, 2012). To succeed in handling a crisis, the organisation should be well prepared with a contingency plan (Fink, 2000) giving a track to control the catastrophe (Reid, 2000). During crisis stage, the organisation has to communicate with its stakeholders and media as well as showing effort to support victims families to prove companys concern and effective crisis settlement (Cabur, 2010). Post-crisis, organisational crisis managers should review and criticise their reactions to develop the crash contingency plan (Spillan and Hough, 2005).

Due to the vulnerability of hospitality industry (Santana, 2001 cited Hendersen, 2003; Ray, 1999), a variation of studies has become effective guidelines in terms of dealing with crisis. Some start with the smallest property, restaurants, such as Israeli (2007), Tse, So and Sin (2006); others are more interested in hotels and resorts crisis such as Stafford, Yu and Armoo (2002), Israeli, Mohsin and Kumar (2011) and Balakrishnan (2011); some even research on how to salvage the destinations from crisis (Speakman and Sharpley, 2012; Ghaderi, Som and Henderson, 2012). However, being a fundamental component of the industry, transportation crisis has not been studied extensively, especially aerial strikes. An organisational reputation is vulnerable to any crisis (Coombs, 1998 cited Claeys, Cauberghe and Vyncke, 2010). So do the airlines. Meanwhile, a fatal crash is the worst strike (Cabur, 2010). This has pressed the airplane manufacturer to study and improve their technical-error-aircrafts (Kobayashi, 1988; Jeon, Jin and Kim, 2012; Sadique, Iqbal and Bhargava, 2013) but the airways are way more vulnerable to the aerial crashes. Therefore, many researchers have strived to evaluate and improve the crisis strategies effectiveness of the airway facing the accident (Molesworth, Viggins and OHare, 2006; Chang and Yang, 2010; Cabur, 2010). However, those reflect only a part of strategies and are not enough to build an effective crash management system. Consequently, an intensive research to complete the strategic crisis plan should be conducted than ever.

Crisis anatomy and appropriate reactions

Crisis Stages Fink (2000) states that crisis cannot be recognised with five traditional senses of human (sight, hearing, taste, smell and touch); therefore, people cannot see if it is coming. However, it is not unexpected (Goel, 2009). According to Meyers (1986, cited Ray, 1999), crisis includes three stages: Pre-crisis, Crisis and Post-crisis. During the first stage, crisis can be foreseen by its signals. Then, Crisis stage begins and its impacts will clearly display. The last stage, Post-crisis is associated with recovery and crisis assessment. Besides, Fink (2000) proposes an advanced crisis anatomy with more details (Figure 1). He demonstrates the 4-phase- crisis: Prodromal (or Preliminary), Acute, Chronic and Crisis resolution. Preliminary in when some of the warning signals can be seen. Prodromal shares some similarities with Meyerss Pre-crisis phase (Ray, 1999). Though signals can be seen (Fink, 2000), it is normally difficult to realise crisis at its first period (McCray et al., 2011). Nonetheless, Ray (1999) suggests the warning is sometimes absent. Following the Prodromal, Acute phase marks the crisis beginning when destruction occurs and it depends on crisis managers strategies that whether more damage will take place. Towards Chronic stage, this is associated with organisational actions to recover after crisis such as investigation, self-analysis, media report, etc. Meanwhile, Ray (1999) demonstrates these actions are being taken in post-crisis stage. Basically, first three stages of Fink resemble three crisis phases Meyers has proposed (Ray, 1999). However, Resolution, the last crisis stage has distinguished Finks anatomy from others.

Specifically, this is the time when crisis managers turn the crisis into an opportunity for their business or just trigger a new one because Fink (2000) emphasizes that crisis anatomy is a cycle.

Figure 1. Crisis Anatomy in Peoples Minds (Fink, 2000) Organisations appropriate reactions Whitman and Mattord (2003, cited Spillan and Hough, 2003) state that crisis management is a set of actions taken during and after a strike. However, Crisis management evolves elements of planning and management (Thompson and Martin, 2010, p.53), which means crisis preparing is also considered as a part of strike management. Composing colleagues ideas, Spillan and Hough (2005) suggest 3 steps in crisis management paralleling with three crisis stages: Pre-crisis, Crisis and Post-crisis.

Specifically, crisis plan should be formed during Pre-crisis stage as a preparation for the strike (Spillan and Hough, 2005); during crisis stage, organisations should update the most recent and accurate news to its stakeholders (Schuetz, 1990 cited Ray, 1999) because crisis communication can minimize the damage to business image (Banks, 1996); while in Post-crisis phase, crisis managers should evaluate crisis plan and vulnerabilities (Fink, 2000) in order to implement and complete organisational crisis plan to prepare for future crisis (Spillan and Hough, 2005).

Pre-Crisis: Planning Crisis Strategy Fink (2000) and Reid (2000) agree that with a contingency plan, organisations can avoid being panic and make use of time. Moreover, with the crisis plan, company may reduce the adverse effects accompanying a crisis (Caponigro, 2000 cited Spillan and Hough, 2005). According to Oster (2010, cited Gamble and Thompson, 2013), setting a certain array of actions for the organisation to follow is called building a strategy. To plan crisis strategies, Spillan and Hough (2005) recommend analyzing internal vulnerabilities (departments within the company) in order to protect the most vulnerable baits. Meanwhile, Thompson and Martin (2010) suggest that the organisation should scan the external environment (stakeholders, competitors, etc.) so as to bring appropriate actions such as protecting or changing strategies. AICST (2006) proposes the SWOT Analysis identifying organisational strengths and weaknesses as well as the environmental opportunities and threats, which is more completed because people consider both internal and external issues.

Crisis: Communicating with company stakeholders and Publicity The sooner the crisis is managed, the easier the organisation recovers after destruction (Fink, 2000). According to Schuetz (1990, cited Ray, 1999), the purpose of crisis management is to update the reliable situation with its stakeholders. To support, Thompson and Martin (2010) emphasize the importance and necessity of crisis communication. Therefore, managing crisis in this paper mainly discusses about communication between the company with its stakeholders and the public. Glaesser (2003) indicates Media Relation does not only transmit accurate information to publicity but also change the audiences attitude. To support, Sen and Egelhoff (1991, cited Holladay, 2012) and Coombs (2007) emphasize that rapid responses contribute in forming peoples perceptions about company image. Consequently, organisation should promote a persuasive spokesperson, who aware of the organisational circumstance, to represent the company in order to listen and respond to the questions from media (Holladay, 2012). Moreover, according to Pop (2011), the way the company looks at the crisis is really important because positive thinking influences on the companys willingness to devote for crisis management and vice versa (Penrose, 2000 cited Pop, 2011).

Post-Crisis: recovering Companys image The post-crisis stage is the opportune time to recover the image as well as to develop the current crisis management system (Murphy, 2008). Spillan and Hough (2005) demonstrate that managers should learn from decision-making mistakes during crisis stage.

Specifically, by evaluating the effectiveness of strategic plan and reviewing vulnerabilities, the company should adjust their plan in order to make it more proficient and effective. Besides, according to Pforr et al. (2007, cited Seeger and Padgett, 2010), crisis recovery can also be defined as organisational image restoring process. Nonetheless, it does not mean to defence and refuse the accident so as to retain companys positive image (Seeger and Padgett, 2010); yet, it is about to show organisations effort to rebuild its reputation thanks to crisis communication between crisis managers and public (McDonald and Crawford, 2012).

Figure 2. Crisis management Proactive Stance (Spillan and Hough, 2005)

Review of existing empirical research

Crisis management in hospitality There have been enormous studies conducted recently in order to analyse the crisis managing process in hospitality. Some investigation demonstrate how restaurants deal with external crisis such as Israeli (2007), Tse, So and Sin (2006), others indicate how hotel industry survive after a crisis strikes such as Stafford, Yu and Armoo (2002), Chien and Law (2003) or Israeli, Mohsin and Kumar (2011).

Even further, various have analysed the involvement of authorities in destination crisis handling process including Speakman and Sharpley (2012), Ghaderi, Som and Henderson (2012). However, the fundamental component of the hospitality industry, transportation, has not been studied extensively. Especially, fewer researches have been done on aerial crisis despite its increasingly important mode of transport for tourism (Graham, Papatheodorou and Forsyth, 2010, 1). Besides, the researcher has suffered from aerophobia, a fear of flying, since she was a child due to approaching a variation of crash news. This motivated her to do an air crash related research, especially on how an airline company deal with its crisis.

Air crash management Grundy and Moxon (2013) in a recent research point out the intimate connection between air transport and airlines brand. Moreover, Clifton (2010) supports that brand are the most valuable asset of a company. However, any crisis could negatively influence on organisational reputation (Coombs, 1998 cited Claeys, Cauberghe and Vyncke, 2010). Consequently, brand protection has been increasingly concerned to any business without exception. On the other hand, fatal air crash is the worst crisis that any airway has to face (Cabur, 2010). This has pushed a pressure on the aircraft manufacturers to research extensively to find out and to improve the technical errors on their products such as Kobayashi, 1988; Jeon, Jin and Kim, 2012; Sadique, Iqbal and Bhargava, 2013.

However, the most vulnerable organisation is still the company suffering the crash. Ho, Qiu and Tang (2012) suggest that the crash have negative influences not only on the crash airline but also its rivals, other airways. Therefore, building a strategic air crash plan is inevitable for any airline company. Surprisingly, there are quite a lot of researches focusing on evaluating the effectiveness of the airline companies crisis management. While some propose educating pilots in advance to avoid potential aerial crisis (Molesworth, Viggins and OHare, 2006), others research on raising survivability after crashes thanks to training cabin-crew as well as the involving of people inside and outside the airports (Chang and Yang, 2010), most of studies examine the companys communication strategies after a real crash such as Grundy and Moxon (2013), Cabur (2010), and Henderson (2003). Although many researchers have studied a part of the crisis plan (crisis preparation, crisis response after air crash as being shown above), not many of them build a completed crash contingency plan for airline company specifically and the aviation industry generally. Realizing this gap in air crash studies, the researcher now has a firm reason to start studying and building an effective contingency plan to an airline specifically and aviation industry generally.

Conclusions and Recommendations

Even though crisis is frequently associated with reputation damage, it can also be an opportunity to change the old organisational structure with a well-prepared crisis plan.

Consequently, crisis management has always been considered as one of the most important aspects of business that examines the sustainability of the organisations. This research is conducted to propose a completed crisis plan presenting what an airway has to do when an air crash happens. Due to the most current noticeable strike in 2009 in the Atlantic Ocean and its controversial responses, Air France has been chosen as the context of the primary research, whose crisis plan and communication strategy will be analysed in order to build up a better crisis management system for airlines. The secondary research in this paper has proposed the crisis anatomy including separate stages describing the crisis evolution, has suggested the appropriate actions taken by the organisations by stages accordingly. Besides, it also emphasized that communication is the key to success in crisis management and brand restoration in crisis and post crisis stage. However, a proper and specific air crash management system of Air France specifically and airways generally will only be valuable and authentic with the help of primary research. Due to the limitation that Air France might not want to cooperate, the researcher should convince them appropriately that they can get peoples attention and sympathy by publishing their strategies, should be honest with them about the aim and objectives of the research which is only to improve the current crisis management system. However, the proposed crisis plan should only be considered as a guideline, the company needs to be flexible and creative in dealing with an air crash because the situation may vary. They should also take consumers opinions into account because that is the main factor deciding whether the company will be forgiven the airline for their effort, whether the company goes on with their business.

Besides, due to the differences in budget, human resources, strategies, etc. between airways, this study might not be reliable enough and cannot be transferable to some contexts. Consequently, the future researchers should divide the airlines sharing common situations into different categories, build up crisis preparation and response for each group effectively. Moreover, they should conduct researchers other contexts to compare and finalise the best crisis management system for airlines generally.

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