There are a lot of differences between legacy carriers, which are at the forefront of the airline industry, and new-entrant air carriers that usually are not only new but also much smaller. The organizational chart is one of the most important issues in management and organization, so, naturally, it is also different for both of these airline types.
The Organizational Chart and Its Role in the Company
An organizational chart is “the blueprint of the company” (Wensveen, 2011, p. 232). It illustrates how the organization is built, maintains the connection between the superiors and subordinates and regulates the communication among all of the hierarchical levels. It also helps to control the employees of the company and determine their authorities. For example, a chart strictly establishes the span of control for every boss and manager.
One of the most important roles of a chart is to raise the motivation and morale. It is important for every worker to see where they stand in an organization and how can contribute to the common cause.
The Differences between a Legacy Carrier Chart and a New Carrier Chart
Considering that the airline industry has only been growing in past several decades, it is hard to determine what kind of organizational chart is typical. However, all of them do have common components. For example, both large and small air carriers are divided into “administrations, departments, divisions, and so forth” (Wensveen, 2011, p. 233). All of them have their boards of directors, presidents and vice-presidents, staff and line administrators. Naturally, legacy carriers have wider departmentalization and the broader range of tasks. It is also obvious that they operate with the higher number of employees.
Advantages and Disadvantages of Both
The organizational chart is not static and changes from time to time. Moreover, it is impossible to say how it will change in a few month or even tomorrow. Air carriers exist in a vibrant environment and, surely, have to adapt to it by revising their charts. For example, with the passage of time, completely new positions can be required while some of existing ones can be unnecessary anymore.
Legacy carriers, naturally, have more complicated and broader organizational charts. Considering this, it can be difficult to monitor the changes. On the other hand, new air carriers have an opportunity to grow, so their charts change quicker. It is also challenging for a new employee to get used to an organizational chart, especially the one of a legacy carrier.
“Cost-driven” and “Revenue-driven” Airlines
Looking at the details, the difference between organizational charts and air carriers is even more fundamental. According to Chopra and Lisiak (n.d.), all airlines, both large and small, can be divided into two groups – they are either “cost-driven” or “revenue-driven” (p. 1). The “cost-driven” airlines differ from others because of the fewer amount of workers, lower wages and cheaper fuel. The “revenue-driven” air carriers focus on the higher load factor and growing revenue per RPM (revenue passenger mile). While those that belong to the first type only strive to minimize the costs, the ones that relate to the second group try to maximize the revenue. It is not surprising that legacy carriers are often “cost-driven” and the new-entrant airlines are “revenue-driven”.
So, the difference between these two types of airlines, as well as the organizational and managing issues, including organizational charts, is noticeable. Besides, it influences not only the working process but the success of the company as such.
References
Chopra, S., & Lisiak, R. (n.d.). How Should Airlines Structure? Web.
Wensveen, J. G. (2011). Air Transportation: A Management Perspective (7th ed.). Burlington, VT: Ashgate Publishing Company.