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As was explained in chapter 1 (p.14) of the textbook, recent organisational alliances have placed greater demands on new information sources, hence impacting management accounting. One example is the alliances amongst some airlines, who share common costs with their competitors; for instance, some airlines share airport facilities and services. The key message in the textbook was that such alliances are always possible, and that management accounting calculations (but not just financial calculation!) will inevitable play a key role in assessing their worthiness.

I had an experience a few weeks ago, that made me consider whether (or not) such alliances between airlines might possibly go a stage further. At about 8.30pm on a Friday evening, when everyone really wants to be home, I was waiting at the departure gate in Dublin airport for my flight back to Exeter. The plane was on its way, we were told, and it’s only a 50-minute ‘hop’ over the Irish Sea anyway. But then, another announcement was made to say that our plane had returned to Exeter, due to ‘technical difficulties’. Not a problem, I thought – no one really wishes to board a plane that has ‘technical difficulties’!

Unfortunately, the third announcement was that our plane would now arrive in 3 hours’ time, at the earliest. It transpired later that a different plane had to fly from Manchester to Exeter first, to catch the Dublin-bound passengers. I arrived home in the early hours of Saturday morning, around 5 hours late. Needless to say, there were no taxis waiting outside Exeter airport to take me home!

This got me thinking: why can’t airlines extend their alliances further still in extenuating circumstances such as these? There were plenty of aeroplanes on the ground at Dublin airport that night, and I am sure pilots’ skills are fairly transferable? I have no answers, I don’t even know if my hunch has any air-mileage in it (for example there may be lots of hindering regulations in the way for this to happen), but think of it from an accounting perspective. There would be costs to incur if your airline outsourced a ‘replacement’ flight to a competitor airline (or maybe these sorts of occurrences would even out over time?). But, against this cost of outsourcing, as an accountant would you not also look to consider the cost of an extra flight from Manchester to Exeter and the aborted (original) flight from Exeter to Dublin. Then, there were costs of feeding (and appeasing!) stranded and rather irate passengers at two airports, overtime costs for airport staff, compensation claim costs, and the non-financial costs of customer ‘dissatisfaction’.

 

Source: self reflection, based on personal experience

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