CHAPTER 15

Step E: Ongoing Monitoring and Vigilance

The Need for Ongoing Engagement

The exercise described in the previous steps is designed to expand understanding of potential shock events and position the airport to be more robust to such eventualities. However, it is not sufficient to simply identify shock events and identify potential remedies as a one-off (or “checkbox”) exercise; the consideration of shock events needs to lead to meaningful organizational changes and for the organization to be continually responsive and proactive to these risks. The aim should be to develop a much greater awareness of the potential impact of these shock events and for that awareness to continually feed into the ongoing and day-to-day planning, financing, and management of the airport. It will also ensure that the process and awareness continue even when there is staff turnover and other organizational changes.

To ensure that the information on shock events is current and that the potential impacts of shock events continue to receive attention, the following actions can be considered.

• Monitoring and early warning detection. Tracking previously identified shock events and identifying new potential shocks. Step D puts forward a response plan that identifies individuals with specific responsibilities for shock event action plans. These same individuals can have responsibility for monitoring shock events and looking for early warning signs (e.g., airline financial distress or stories of illnesses in other parts of the world). Some airports may already have risk management teams or risk registers, and tracking and identifying shock events could be folded into that process.
• Periodic and ad hoc updates. Updates can be provided to the wider management and planning team regularly (e.g., quarterly) to maintain awareness of shock events and ensure that information is current. This could be in the form of an update memo (which regularly keeps the potential for shock events in mind) or a presentation to management on potential shock events (the latter having the benefit of providing a forum for debate). Ad hoc updates or warnings can also be sent if there are concerns that a shock event could occur or is emerging.
• Full reassessment. On a less frequent basis (e.g., every year or 2 years), the scenario planning exercise in Steps A to D can be redone or at least reviewed and updated. Alternatively, this could be done before any major planning or strategic decisions are made (e.g., updating the master plan). The aim is not to rewrite the airport’s plans every year or two but to ensure that the focus remains on robustness to shock events and that the plans change as conditions change. Key questions to consider include the following.
  • Are there any new potential shock events that need to be considered?
  • Are any of the previously identified shock events no longer relevant?

• • Is there a need to produce and evaluate new scenario forecasts for previously or newly identified shocks?
  • Are any changes needed to the airport plans and strategy?

Disposing of and Modifying Scenarios

The purpose of the scenarios and the scenario forecasts is to engage and challenge the thinking of decision-makers. They are designed to break the focus on “most likely” outcomes and encourage “out of the box” thinking on the possibility of shock events and how to address them. However, these scenarios are not forecasts of the future and should not be treated as such. Scenarios have a limited shelf life as circumstances change, and the temptation should be avoided to cling to them due to their familiarity.

Some scenarios should routinely be disposed of or, at the very least, modified, and new scenarios developed as events and thinking change. As an example, a potential shock event might be that a major carrier fails or dehubs operations at the airport. If the carrier resolves the issue, such as by a merger and commitment of the merged carrier to retain operations or by successful restructuring, then the shock event previously identified may no longer be relevant. As an example, in 2003, Air France and KLM merged under a common holding company, and there was concern that the airline group would dehub operations at Amsterdam Schiphol Airport (AMS) or downgrade AMS to a regional, intra-Europe hub. However, the airline holding company made a formal commitment to not dehub AMS and locked this commitment in through formal agreements. Similarly, in the 1990s, there were concerns in Canada that the precarious financial position of the nation’s second-largest carrier, Canadian Airlines International (CP), would result in the failure of the carrier and loss of service at key hubs and spoke destinations where CP was the major carrier. When Air Canada acquired CP and made commitments to the government that it would retain a basic level of service at previous CP destinations, the concern for a major shock event reduced.

Communicating the Findings and Plans

Not all members of the organization can be involved in the scenario planning exercises, but action plans resulting from this process should be well-known and understood within the organization. As discussed in previous tasks, understanding and acceptance of risk and shock events varies considerably from individual to individual and so there is a need for clear and effective communication before and during any event. This is not to say that all the details necessarily need to be widely disseminated in all cases; certain types of shock events should be considered but are sensitive.

Communication can serve multiple roles in creating robustness against shock events and during a shock event itself as noted in the following list.

• Explaining and building confidence in decisions made to enhance robustness and decisions made during the crisis or shock event.
• Coordinating responses within the airport organization to ensure everyone is “pulling in the right direction.”
• Coordinating with key stakeholders—airlines, tenants, government agencies, local communities, etc.
• Informing customers (passengers, shippers, etc.) and the general public and avoiding unnecessary public concern.
• Protecting “brand image” and customer or investor (bondholders) confidence.
• Generating interest in related issues (and in some cases, promoting the airport’s plans).

Simplifying the Process

Repeated updates to the scenario planning and forecasting may not be possible. However, taking actions such as routinely including risk factors and shock events on the agenda of relevant executive and board meetings will help to maintain consideration of these factors.

Outcome

Ongoing monitoring and evaluation of potential shock events feed through to all aspects of the organization, ensuring that the airport is better able to have a robust response to unknown and unpredictable shock events.