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STI COLLEGE SAN JOSE

Quality Assurance Plan for Avianca Airlines (Colombia)

Submitted by:
Abaoag, Hanna Lea
Adonay, John Rafael
Bautista, Dianne
Bugarin, Janine Mae G.
Francisco, Rhayzelle
Gerero, Crissela
Majaducon, Jameson
Mangaliag, Lyndon Joshua
Ramos, Divine
San Roque, Mailynn

Submitted to:
Sir Joshua Valdez

BSTM301B

November 2024
Chapter 1: Research and Analysis

Conduct thorough research on the business and its industry to understand the root causes of its
bankruptcy.

A. Analyze the Bankruptcy:

 Identify Root Causes: Research the reasons for the business's bankruptcy, focusing on
factors related to quality, efficiency, or customer satisfaction.
- As the pandemic expanded, the Colombian airline said it was severely impacted by
lockdowns worldwide. 88% of all countries in which Avianca conducts operations
have travel restrictions, either entirely or partially. In order to protect and preserve
operations while the pandemic emerged, the decision to declare bankruptcy was
made. According to the airline, it typically operates 700 flights per day with 189
aircraft in its fleet. However, since mid-March, its passenger flights have decreased
because of the pandemic, reducing its overall revenue by over 80% and placing
significant challenges on its cash reserves. Avianca Airlines also has been facing
negative credit ratings and sudden changes in board control before the pandemic.
 Assess Quality Issues: Determine specific quality problems that contributed to the
bankruptcy, such as defects, late deliveries, or poor customer service.
- There is no information that the airline leads to bankruptcy due to its quality issues.
The airlines have a lot of negative feedback however it didn't reflect and affect the
negative feedback they received on their bankruptcy. It is just that the main cause
of their bankruptcy is because of the pandemic.

Chapter 2: Customer-Centric Approach

Focus on understanding customer needs and delivering products or services that exceed their
expectations.

A. Redefine Business Goals:

 Customer Focus: Identify the target market and their needs.
- Avianca Airlines serves different types of customers. They focus on three main
groups: business travelers, leisure travelers, and tourists. Business travelers want a
flight that is fast and has a smooth travel experience. This group's values are on-
time departures and excellent customer service, and they want to be the ones on
the plane like VIPs. Leisure travelers are looking for affordable flights that are still
comfortable. They want to enjoy their trip without spending too much money. They
prefer good deals and good services during their flights. Tourists people visiting new
places. They want to explore different destinations. Tourists also like to find special
offers and packages that make travel easier and more enjoyable.
 Value Proposition: Develop a clear value proposition that differentiates the business
from competitors and addresses customer pain points.
- Avianca Airlines can create a strong value proposition. This means they should offer
something special to their customers that other airlines may not provide. First, they can
establish loyalty programs that reward the travelers. By earning points for every flight,
customers can enjoy free flights or upgrades. Second, based on the reviews of - Avianca
Airlines, many passengers say that they have bad experiences with the services of
 Avianca, and there is no food or water provided, you should pay to avail that ,but it's
so expensive. I suggest improving service on flights. Avianca Airlines should offer
delicious meals/water and a variety of in-flight entertainment. This will make the
passengers enjoy their flights. Third, they should make the booking process easier.
They can do this by allowing customers to book online or through chat and text
messages. Lastly, the reviews say that Avianca Airlines continued to travel during a
typhoon and stopped in the middle of it. They should make sure the passengers are
safe. To ensure safety, Avianca can monitor weather conditions, delay flights during
dangerous weather, provide clear communication to passengers, and train staff on
safety standards. When Avianca Airlines does this, it can stand out in the
competitive airline industry.

Chapter 3: Proposed Course of Action

Use data and analytics to improve decision-making, drive improvements, and encourage collaboration
and teamwork among employees to foster a positive work environment.

A. Forecasting and Demand Management:

 Historical Data Analysis: Analyze historical sales data to identify trends, seasonality, and
demand patterns.
- Avianca experienced significant financial difficulties during the COVID-19 pandemic,
with a sharp decrease in passenger revenue. The airline’s financial recovery is
ongoing. The pandemic led to a substantial drop in passenger numbers. Avianca’s
operational adjustments to navigate this downturn are a key element of its
historical performance.
 Market Research: Conduct market research to understand current and future demand
for the business's products or services.
- Avianca operates in a highly competitive market, facing pressure from both
established legacy carriers and the growth of low-cost airlines. Economic conditions
and tourism trends in Latin America significantly influence passenger demand and,
consequently, Avianca’s market position. Avianca’s pricing strategies must balance
competitiveness with the need to maintain profitability in a fluctuating market.
Despite negative feedback from the people, they still patronize the airline as the flag
carrier of Colombia.
 Demand Forecasting: Develop accurate demand forecasts using appropriate forecasting
techniques.
- Utilizing the use of a Qualitative Approach which is market research like surveys,
and interviews to provide insights about the consumer preferences of the
passenger since there are lots of negative reviews, particularly about the service.
 Knowing their wants, and needs and providing them a quality service. Knowing the
market trends can help the airline and what are the current trends in the market
that could apply in the said airlines.
 Demand Management Strategies: Implement strategies to manage demand
fluctuations, such as promotions, discounts, or inventory management.
- Avianca Airlines can utilize different pricing strategies to effectively manage
demand, such as dynamic pricing, where prices change according to demand,
among others. They also make promotional offers and offer discounts during low
seasons to encourage demand. Prioritize the service availability where giving the
passengers excellent service and providing customer satisfaction.
B. Inventory Management:
 Optimal Inventory Levels: Determine optimal inventory levels to balance costs and
customer satisfaction.
- Spare Parts Inventory: Avianca likely uses predictive analytics and historical data to
forecast the demand for aircraft spare parts. The goal is to have a safety stock so
when there is an emergency there are parts or things that may be used.
Catering Supplies: They optimize inventory by analyzing flight schedules, passenger
demand, and menu preferences. Overstocks are avoided to reduce waste. For
example, in-flight foods from Avianca Airlines offer a special menu for infants, a
vegetarian menu, and allergies and intolerances. Other foods they offer are chicken
sandwiches, cup noodles, croissants, and the like. Snacks like potato chips, Pringles,
Kit Kat, filled cupcakes, and many more. Drinks like coffee, fruit tea, juice, red wine,
water, sparkling water, and the like.
Stationery and Consumables: Items like boarding passes, cabin cleaning materials,
and uniforms are kept in line with operational needs at each hub.
 Inventory Control Systems: Propose inventory control systems to track stock levels,
monitor usage, and prevent stockouts or excess inventory.
- Tracking and Traceability: Parts and materials are tracked using barcodes, QR
codes, or RFID tags. This ensures real-time visibility of stock levels across all stations.
Vendor-Managed Inventory- A collaborative approach between the suppliers of
Avianca Airline takes responsibility for managing the product inventory level.
 Supply Chain Optimization: Optimize the supply chain to ensure timely delivery of
materials and components.
- Supplier Relationships: Avianca likely partners with Original Equipment
Manufacturers (OEMs) like Airbus and Boeing that develop, manufacture, and
service commercial airplanes. Another is for their in-flight services they partnered
with gategroup menus were developed in conjunction with gategroup, one of the
most experienced catering companies in the design and management of in-flight
sales programs for airlines globally. Collaborating with Chevron in providing fuels
and Amadeus and Ramco System to ensure the smooth flow of their system.
Predictive Maintenance: By using data from sensors and maintenance logs, Avianca
may reduce spare parts stockouts and optimize replenishment. Use predictive
analysis to foresee maintenance needs and demand for parts and services.
Lean Principles: Their inventory processes probably follow lean principles to reduce
waste, improve turnover, and streamline operations.
C. Supply Chain Management:
 Supplier Evaluation: Evaluate and select reliable suppliers who can provide high-quality
products or services at competitive prices.
- According to our research, there are three main suppliers in the airline industry,
including fuel, aircraft, and labor. One factor is aircraft companies, and there are
two big suppliers, i.e., Airbus and Boeing. Airbus collaborates with over 12,000
suppliers worldwide, focusing on both flying parts (e.g., engines, and avionics) and
non-flying parts (e.g., ground equipment). They prioritize suppliers with strong
operational reliability, innovative solutions, and adherence to sustainability
principles. Similar to Airbus, Boeing has an extensive network of global suppliers
specializing in aircraft parts, safety systems, and advanced technology solutions.
Suppliers include aircraft manufacturers and maintenance companies such as
Boeing and Airbus, fuel suppliers like Chevron, catering services like gategroup, and
technology providers like Amadeus and Ramco System. Airlines rely heavily on these
suppliers to ensure the quality and safety of their services.
 Risk Management: Using the risk response planning tool, implement risk management
strategies to mitigate supply chain disruptions and ensure business continuity.

Risk Category Risk Description Risk Impact Risk Response

Airline Fuel Lack of providing Possible delay of Conduct weekly

(Chevron) fuel travels meeting

Technology Possibly the The operation Conduct regular

Providers technology is will cause cybersecurity
(Amadeus and crashing and damage and audit
Ramco System) system outages delays.
or cyberattacks
affecting booking
systems,
passenger
handling, or flight
operations.

Aircraft and Delays in aircraft Flight schedules Maintain a

Component delivery or spare were disrupted, strategic
Suppliers (Airbus parts availability leading to a loss inventory of
and Boeing) due to of revenue and critical spare
production issues customer parts.
dissatisfaction.

Catering/Inflight Catering supply Customer Identify multiple

Services chain disruptions dissatisfaction catering service
(gategroup) due to labor with foods providers that
shortages or can be able to
logistics provide.
D. Project Management:
 Project Prioritization: Identify and prioritize critical projects that will contribute to the
business's revival.
- Top Priority Projects
1. Prioritizing Customer Satisfaction- Conduct training for employees and
staff so that may improve their skills and provide customer satisfaction
since many passengers are complaining about their service and rude
staff. Launch comprehensive customer service training for staff that
focused on empathy and improving skills. Do surveys and feedback to
measure and know what to improve.
2. Enhance In-Flight Experience- Some passengers are complaining about
foods that they didn’t serve foods, Avianca Airline should enhance the
services they offer during flights like enhancing the quality of food or
adding more options and upgrading seating with more legroom.
3. Enhance Customer Service- Implement a 24/7 live chat and chatbot
system for rapid query resolution. Additionally, enhances customer
service calls or responses particularly when passengers have questions.
 Project Planning: Develop detailed project plans, including scope, timeline, resources,
and deliverables using a Gantt chart.
- Project Plan for Customer Experience Enhancement:

 Project Execution: Implement effective project management methodologies to ensure

timely completion and quality deliverables.
- Implementing agile methodology to Avianca can help for continuous improvement.
We want Aviana Airlines to improve in the airline industry by improving processes,
 providing customer satisfaction, and overall business operations. This approach
emphasizes adaptability, collaboration, and continuous improvement. By
implementing this it can help Aviana Airline address the needs and challenges.

Chapter 4: Sustainability

Develop a sustainable business model that ensures long-term viability and profitability.

A. Process Review and Improvement:

 TQM Tools or Techniques: Using at least three (3) of the TQM tools and techniques,
propose a sustainable business model that will help eliminate waste, reduce defects,
and improve efficiency in the workflow.

1. Pareto Analysis
This tool helps identify the most common problems. Based on our research, many passengers have
negative reviews of Avianca Airlines. The goal is to focus on the issues first. Like if 80% of complaints are
about bad customer service, uncomfortable seats, and flight delays, the 20% reason is that there is no
proper training for the employees and those seats have not been improved. Even the airline and the
flight delays or adjustments are always because there are no available seats or they are overbooked. The
20% should be solved so that it no longer goes to the effects. What Avianca should do is work on
improving its schedule and reducing delays. The management should be told immediately that the
flights are delayed and should conduct customer service training for the employees to know their skills
and to have knowledge about providing excellent customer service and improving the overall airlines.
Because of this, the problems are solved and the passengers can meet the expectations.

Customer complains Frequency

Bad customer service 30

Uncomfortable seats 15

Impolite staff 13

Delays flight 20
2. Fishbone Diagram

This diagram helps find the root causes of problems. Based on our research, many customers complain
about rude staff and bad customer service. The management should conduct a meeting to find out why
the employee is like that. By identifying the reasons behind the problems, the airline can take action to
fix them. This could mean providing better training for staff or improving working conditions for them.
They say that staff do not serve meals and water to passengers, and some staff are rude. There are also
delays in flights because of problems with the system. Some flights are canceled because the schedule is
wrong. The seats are uncomfortable, and the materials are outdated, which makes passengers unhappy
during their trip. Lastly, management should have reward programs, like "Employee of the Month," to
motivate employees. This will help ensure they provide excellent customer service to passengers.

3.Continues Improvement (Kaizen)

Avianca Airlines can benefit from using Continuous Improvement also known as Kaizen. This method
helps make small improvements rather than big changes all at once. Avianca can encourage its
employees to share their ideas for improving customer service. Since there are many negative reviews
about the airline, it's important to pay attention to these comments. By understanding what customers
want, prefer, and dislike, the airline can identify specific areas that need improvement. Like if
passengers complain about long wait times and bad customer service, the airline can focus on training
employees to provide better service and always fast so that passengers don't have to wait and listen to
both employees and customers. By doing this Avianca airline can enhance its service and reputation
over time.
References:

Colos, L. (2024, January 31). Avianca Holdings SA: Business Model, SWOT Analysis, and Competitors
2024. Avianca Holdings SA: Business Model, SWOT Analysis, and Competitors 2024 - PitchGrade

EdrawMax. (n.d). Airline Industry Porter's Five Forces Analysis.

https://www.edrawmax.com/article/airline-industry-porters-five-forces-analysis.html#:~:text=There
%20are%20three%20main%20suppliers,%2C%20i.e.%2C%20Airbus%20and%20Boeing.

Sharma, S. (2023, September 13). Airline industry analysis | Airline Industry Value Chain Analysis |
Airline industry Porter 5 forces | Airline industry pestel analysis.
https://shailesh-sharma.medium.com/airline-industry-analysis-airline-industry-value-chain-analysis-
airline-industry-porter-5-99646ef05d42#:~:text=Suppliers%20include%20aircraft%20manufacturers
%20(Boeing,and%20safety%20of%20their%20services.