Essays on Sustainability And Profitability - Air China Cargo Company Limited Case Study

Download full paperFile format: .doc, available for editing

The paper 'Sustainability And Profitability - Air China Cargo Company Limited" is a good example of a management case study. A lot of firms globally have been working hard to enhance profits while at the same time being sustainable. Based on the conventional notion of firm goal, the main aim is to maximise profits through allocating and utilising resources. This meant that corporate resources have been oriented to maximise profits (Kasarda & Green, 2005). Despite this, firms face a challenge of ensuring that they integrate environmental and social concerns with the aim of ensuring sustainability.

Airlines globally have been working hard to be sustainable. This is through trying to reduce their ecological footprint while at the same time remaining profitable (Morrell, 2011). This research paper focuses on Air China Cargo Company Limited in their journey to increase profits while at the same time being sustainable. This is through focusing on the various strategies which the firm has employed to augment its market share while at the same time focusing on sustainability and increasing profits. This is based on the current market and economic conditions.

The report then gives recommendations to Air China Cargo Company Limited on how to improve their strategies and enhance profits. Background information Air China Cargo Company Limited Air China Cargo Company Limited started in 2003. In 2011, a joint venture project was completed between Air China and Cathay Pacific Airlines. This is a joint venture that led to the registered capital of RMB3, 235,294,118. Based on the arrangements, Air China was to hold 51% of the equity interest. Additionally registered capital was subscribed in 2014 between air china and Cathay pacific which amounted to RMB2 billion.

This was based on the airlines respective shareholding. This led to an increase of Air China Cargo registered capital to RMB5, 235,294,118. The process of registration is still in progress (Air China Limited, 2015). Air China Cargo has been working to ensure that they are sustainable while at the same time meeting the shareholder's targets. This can be seen through their efforts where the airline has made a massive investment in sustainability. To remain sustainable, the airline has been modernizing its fleet with fuel-efficient aircraft.

There has also been the employment of new technologies and efficiency standards in the airline to ensure that emissions are reduced (Air China Limited, 2015). It has also been common for the airline to have water recycling programs and research on alternative source of fuels. Although the industry has a long way to go in reducing its carbon footprint, a lot of technological innovations have been made (Morrell, 2011). The new airlines are up to 40% fuel-efficient than the older jets. There is also less waste being produced by the jets.

According to the airline report, 2015 saw Air China Cargo acquire modern aircraft. This helped Air China Cargo to phase out some of the old aircraft. The group has aircraft which have an average age of 6.11 years. This shows that the airline is committed to a modern fleet which has a low environmental impact. The efforts of Air China have made them attain a profit sustainability index of 8.2 as a group. This is due to the fact that the Air China Cargo has maintained profits for consecutive years posting above-average profit margins (Air China Limited, 2015).

References

Air china Limited, 2015. Interim Report 2015, Retrieved 30th September 2016 from, https://et.airchina.com.cn/en/investor_relations/images/financial_info_and_roadshow/ 2015/09/18/FF923AB78A7AFAC512B07AA608FFB38C.pdf

Chow, C.K.W. and Fung, M.K.Y., 2009. Efficiencies and scope economies of Chinese airports in moving passengers and cargo. Journal of Air Transport Management, 15(6), pp.324-329.

Hong, S. and Zhang, A., 2010. An efficiency study of airlines and air cargo/passenger divisions: a DEA approach. World Review of Intermodal Transportation Research, 3(1-2), pp.137-149.

Kasarda, J. D., & Green, J. D. 2005. Air cargo as an economic development engine: A note on opportunities and constraints. Journal of Air Transport Management, 11(6), 459- 462.

Kasarda, J.D. and Sullivan, D.L., 2006. Air cargo, liberalization, and economic development. Annals of Air and Space Law, 31, pp.1-26.

Lei, Z. and O’Connell, J.F., 2011. The evolving landscape of Chinese aviation policies and impact of a deregulating environment on Chinese carriers. Journal of Transport Geography, 19(4), pp.829-839.

Morrell, P.S., 2011. Moving boxes by air: the economics of international air cargo. UK: Ashgate Publishing, Ltd.

Rohde, R.A. and Muller, R.A., 2015. Air pollution in China: Mapping of concentrations and sources. PloS one, 10(8), p.e0135749.

Wang, K., Fan, X., Fu, X. and Zhou, Y., 2014. Benchmarking the performance of Chinese airlines: An investigation of productivity, yield and cost competitiveness. Journal of Air Transport Management, 38, pp.3-14.

Wang, R.T., 2007. Improving service quality using quality function deployment: The air cargo sector of China Airlines. Journal of Air Transport Management, 13(4), pp.221-228.

Zhang, A. 2004. Air cargo in mainland China and Hong Kong. UK: Ashgate Publishing

Zhang, A. and Zhang, Y., 2002. Issues on liberalization of air cargo services in international aviation. Journal of Air Transport Management, 8(5), pp.275-287.

Download full paperFile format: .doc, available for editing
Contact Us