Running Head: RISK
5-2 Report: Risk Impact Assessment
After conducting a comprehensive risk assessment of TransGlobal Airlines, two
major risks have been identified that have the potential to adversely affect its performance in
the market. One of the chief risks relates to the adoption of a robust safety management
framework while handling all the aircraft of the fleet. Its popular 737 aircraft has already
given rise to serious safety concerns (Qiu et al., 2020). The risk could further magnify in the
dynamic business environment. The risk that has been identified is related to the ‘internal
processes’ balanced scorecard component. The risk relating to the safety aspects can be
categorized as an operational risk that can affect the business performance.
Another risk that can adversely affect the TransGlobal Airlines business in the airline
industry is competition. It is a high-impact risk that has the potential to diminish its financial
profitability and market share in the airline business domain. The risk that has been identified
is related to the ‘financial category’ of the balanced scorecard. It is a major strategic risk that
could affect how the airline company delivers its airline services to its customers. The risk
area can be considered to be high-impact in nature as it could threaten the very survival and
sustainability of the business.
Evaluation of the risks
The probability of the risk relating to safety issues is medium. This is because a
diverse range of factors such as technical complexity, poor coordination, etc can intensify
these issues. The risk can adversely impact the reputation and goodwill of the company in the
airline setting. However, since the TransGlobal Airlines business has been operating in the
airline industry since the year 1951, it can capitalize on the experience to manage the risks
relating to safety aspects.
The probability of the risk relating to intense competition that could hamper its
financial performance in the airline market is high (Cao et al., 2018). This is because the
industry is considered to be one of the most attractive business domains that have been
flourishing in recent times. The impact if the risk could be severe as it may lead to the
shrinkage of the market share that is held by the company.
Prevention or Mitigation strategy
A possible risk-prevention or mitigation strategy relating to the safety concerns
involves the deployment of innovative technological elements to enhance the safety measures
that have been adopted in the aircraft (Cao et al., 2018). The company has the opportunity to
leverage innovative technology to create a robust safety management framework that can
enhance the current level of safety of the aircraft of the company.
A strategy that the airline business can adopt in order to prevent the risk relating to an
intense level of competition is by focusing on offering a personalized flying experience to its
customers (Qiu et al., 2020). The business needs to try to differentiate itself as well as its
offerings from its industry rivals so that customers will want to prefer to choose the flying
options of TransGlobal Airlines. By enhancing the quality of service by focusing on
personalization, the customer satisfaction can be improved and it can gain a competitive edge
against its rivals.
Cao, J., Xu, Y., Ou, H., Tan, Y., & Xiao, Q. (2018, July). PFS: a personalized flight
recommendation service via cross-domain triadic factorization. In>2018 IEEE
International Conference on Web Services (ICWS)>(pp. 249-256). IEEE.
Qiu, S., Yao, D., Wang, Z., & Zhao, G. (2020). Research on airline operational risk
management and control method. In>IOP Conference Series: Materials Science and
Engineering(Vol. 715, No. 1, p. 012053). IOP Publishing.