Aer Lingus 2014 Annual Report Download - page 34

32
2014 risks
classification
2013 status &
classification
Change
Description and impact
Mitigation strategy
Change
Management
(Organisational
agility)
Organisational
capacity/ people
(Operational)
Management and staff are keenly
aware that change is constant and
essential. We consider it an
opportunity and face it confidently
and with creativity.
For Aer Lingus to continue growing
on a sustainable basis it is essential
that we improve our ability to adapt to
changing market and customer
demands.
Through our annual staff engagement
survey process we identify where we are
effective in implementing change and
where we need to improve.
Action plans derived from the survey
results are integrated into management
activity on an ongoing basis, ensuring we
remain agile, flexible and committed to
delivering change to improve both our
business and our workplace.
The Company is also engaged in a change
programme to create a flexible and
entrepreneurial company.
Industrial
Relations
(Organisational
agility)
Industrial
relations
(Operational)
The Company has a largely unionised
workforce and collective bargaining
takes place on a regular basis across a
range of issues.
A successful relationship with our
staff stakeholders is vital to our
performance.
We work with all of our people and
partners to ensure we clearly explain the
rationale and benefits of change.
Where we disagree on the methods of
implementation we will introduce an
internal disputes mechanism to ensure our
disagreements do not impact on our
customers as they have done in the past.
Progress on staff related initiatives was
delayed by industrial action in Q2 2014 and
the implementation of the proposed IASS
solution.
However we are at an advanced stage in
development of our Internal Dispute
Resolution panel which should see a better
way of resolving disputes between the
Company and its employees.
IT
Infrastructure
(Organisational
agility)
IT environment
(Operational)
The Company is dependent on IT
systems for most of its primary
business processes.
The performance and reliability of
these systems is critical to our ability
to operate and compete effectively.
The ever increasing threat from cyber-
attack is real and needs to be managed
actively.
The Company follows a systematic project
management approach, properly resourced
and supported by each Executive division
to ensure timely implementation of required
IT change. Over the last years, Aer Lingus
has significantly invested in its IT systems.
Aer Lingus employs best practice IT
security protocols to mitigate the risk of
cyber-attack with regular penetration
testing
Cost & Revenue
(Cost
competitiveness)
Cost and
revenue
management
(Financial)
The nature of our markets can make it
very difficult to pass cost increases on
to passengers without adverse impact
on traffic volumes.
Failure to enforce rigorous control
over all of our costs, and to maximise
opportunities to generate revenue
through effective yield management
and targeted ancillary sales
promotions, will adversely impact on
our margins.
The CORE programme was launched in
early 2014 to continue Aer Lingus’ product
differentiation and price competitiveness in
a market in which competitors are
increasingly seeking to emulate our
successful “value carrier” model
Several commercial initiatives successfully
concluded in 2014 including the
introduction of 26 booking classes (€10m
annual benefits at maturity); additional
aircraft for summer schedule; move to
Heathrow Terminal 2; re-launch of business
class service, new website and mobile app
and the launch of new retail products
including merchandising.
CORE recently re-launched with cost
savings of €40 million targeted by the end.