Introduction

Project
Management
Aviation Project Management
By Triant Flouris & Dennis Lock
 Introduction

• The ‘aviation industry’ is really a collective

term for a number of different industries,
each of which has its own distinct qualities
and management needs.
• the aviation industry is really a collection of
associated industries, all of whom need
project management if they are to become
established and continue to operate
efficiently and profitably
 Introduction
• OEM – Original Equipment Manufacturer.
First there are the companies that design
and make all kinds of aircraft, ranging from
the smallest private planes to large wide-
bodied passenger airliners.
• Projects and project management are
essential to these companies, some of whom
invest billions of dollars which they do not
expect to recover for perhaps as long as 20
years.

Image Source: https://jdasolutions.aero/blog/oem-anti-trust/

 Introduction
• Companies that operate the aircraft. These
are the carriers of passengers and air cargo.
They are a service industry.
• Service industries are not usually considered
as a home for projects, but airlines and other
companies that partake in the industry often
have to invest in projects.
• When, for example, an airline sets out to
rebrand a service or introduce a new
passenger route, they would be unwise not to
treat that venture as a project and manage it
accordingly.
 Introduction
• A third branch of the aviation industry is formed by
the many airports and other aviation service
providers (such as air navigation services, aviation
product suppliers, and so on).
• Others: military aviation
• All projects share one common characteristic—the
projection of ideas and activities into new
endeavors. Risk,uncertainty leads to unforetold
exact completion time.
• Examples abound of projects that have exceeded
their costs by enormous amounts, finishing late or
even being abandoned before completion.
 Aviation Project Failures
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 PURPOSE OF PROJECT MANAGEMENT

To predict, plan, organize, and control activities and resources so

that projects are completed successfully in spite of all the
difficulties and risks.

To satisfy the project sponsor or purchaser and all the other

principal stakeholders, within the promised timescale and
without using more money and other resources than those that
were originally set aside or budgeted.

The consequences of such project failures can extend well

beyond time and cost excesses, and can lead to expensive
litigation, contractual penalties, and cancelled orders.
 PROJECT LIFE CYCLES AND LIFE HISTORIES

SUCCESS IS JUDGED WHEN:

• Project completion within the cost
budget;
• The project delivered or handed over to
the customer on time;
• Good performance, which requires that
all aspects of the project are finished in
accordance with the project
specification.
 EXAMPLE

A
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air show a sponsor charitable
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(perhaps at a public display)
TIME
TIME
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PERFORMANCE
PERFORMANCE COST
COST
COST
 Customer/ Examples of organization:
client - Aircraft Industry
- Airport
- Airlines
- Institution
- Banks

Project
Stakeholder

Investors Contractor
Group Assignment (10 mins discussion 10mins presentation)

Find a study case related to failure of aviation project (ex:

closure of airport, closure of airline, discontinued production
etc)

• In your explanation give in introductory of the case (date,

location, event)
• State the factors of failure.
• State what should have been done.
 Project Management Processes:

Monitoring
Initiating Planning Executing and Closing
controlling
• Define • Define • Perform • Manage • Perform
preliminary detailed project work schedule, administrati
schedule, cost project costs, risks, ve closure
and identify schedule, stakeholder • Release
risk. estimate and project project
• Develop project cost team resources
charter • Secure
• Plan resources resources
 Defining the project scope
Before signing a contract it is extremely important that the
contractor determines exactly what the customer expects to receive
in return for money spent on the project. The customer’s
specification should set out all the requirements in unambiguous
terms, so that they can be understood and similarly interpreted by
customer and contractor alike.

Some projects are so surrounded by uncertainty that they cannot

be defined adequately before work starts. Such uncertainty is
especially true in the context of a cyclical industry like aviation. If an
investor still wishes to proceed with a new project that is
surrounded by uncertainty, there are various safeguards that can
limit the exposure to risk.
• Stage-gating
• Avoidance of fixed-price contracts
• Provisional cost items in fixed-price contracts
• Feasibility studies to improve early project definition
 Project Costs
Without a good understanding of the project requirements and the
intended strategy for meeting those requirements, estimating,
budgeting, and pricing become very uncertain processes.

Cost
Elements

Direct Indirect
costs costs

wholly attributed to the overhead running costs of the business.

project and are the costs of They include heating, lighting, rent,
labor and materials council rates, and property maintenance
project cost items can be either ‘above-the-line’ or ‘below the-
line’. Above-the-line costs include the total estimated direct project
costs plus an allowance for overheads. Below-the-line items are
generally allowances intended to give some protection from risk
and ensure that the project will be profitable
Estimating the costs of materials and equipment

The engineers or design representatives must specify what materials are

going to be used,
Purchasing department will be expected to find out how much they will cost
and how long they will take to obtain.
Materials need two types of estimate. These are:
• The total expected cost, including all delivery and other charges.
• The lead time, which is the elapsed time between placing the purchase
order and receiving the goods at the point of use.
 Uncertainty and Risk

Source: https://ocw.mit.edu/courses/civil-and-environmental-engineering/1-040-project-management-spring-2009/lecture-
notes/MIT1_040s09_lec24.pdf
 Difference Between Risk and Uncertainty
The following are a few differences between risk and uncertainty:
• In risk, you can predict the possibility of a future outcome while in
uncertainty you cannot predict the possibility of a future outcome.
• Risk can be managed while uncertainty is uncontrollable.
• Risks can be measured and quantified while uncertainty cannot.
• You can assign a probability to risks events, while with uncertainty you
can’t.
*source: https://pmstudycircle.com/2012/02/risk-vs-uncertainty/

Relationship Between Risk and Uncertainty

Uncertainty is the source of all risk and that risk is a consequence of uncertainty (Cleden,
2009; Olsson, 2007; Perminova et al., 2008
It is almost certain that some tasks will not be completed in line with their
duration estimates and budgets. Some might exceed their estimates, whilst
others could be finished early and cost less than expected.

Statistical tools such as PERT and Monte Carlo analysis can be used
to attempt an assessment of the probability of the project finishing by its
target completion date or of the intended return on investment being
realized. However, those measures deal with uncertainty rather than with
risk.
Risk analysis
• Risk analysis can be either qualitative or quantitative.
• Qualitative risk analysis goes at least one stage further than qualitative
analysis by attempting to quantify the outcome of a risk event or to attach a
numerical score to the risk that ranks it according to its perceived claim for
preventive or mitigating action.
Controlling Uncertainties
• Weekly Reporting
• Continuous Improvement
• Program review
• Review Board
 Qualitative Cause And Effect Analysis
Fault-trees and fish bones Fault-tree analysis (not described here) and
Ishikawa fishbone diagrams are methods commonly used by reliability
and safety engineers to analyze faults in design and construction. Project
risk managers can adapt Ishikawa fishbone diagrams to examine risk
cause and effect relationships.
Failure mode and effect analysis (FMEA) Failure mode and effect
analysis (FMEA) is another example of a method that has been imported
into project risk management from reliability and quality engineering, This
method is particularly helpful to aviation project managers because it
starts by considering possible risk events (failure modes) and then
attempts to predict all their possible effects.
GROUP ASSIGNMENT (10 mins discussion 10 mins
presentation)

Find a study case related to failure or success of aviation

project (ex: closure of airport, or success of upgrading a
runway.

• In your explanation give in introductory of the case (date,

location, event)
• State the uncertainty and risk/opportunity occurs in the
event. Put it in a fishbone diagram.
• Mitigation plan that was taken if any.
Thank You