Dealing With Risk and Uncertainty and Ways to Increase Profitability

Risk and Uncertainty
Students Name
University Affiliation
Course
Code
Risk and Uncertainty
Organizations today must deal with a variety of risks and uncertainties that have an impact on their day-to-day operations and financial situation. The ongoing Covid-19 pandemic has had a negative effect on significant number of businesses, including Delta airline company. Delta Airlines is an American company with a global reach and is among the biggest airlines in the world due to its size, revenues and clientele. To transfer passengers from one location to another, enormous risk and uncertainty are involve hence the company must adhere to strict operating guidelines established by the government. This paper will examine Delta Airlines' actions to address recent risks and uncertainty. Additionally, the paper will cover some of the issues and potential fixes Delta can use to increase profitability.
The Recent Actions
The Covid-19 pandemic has caused social and economic distress worldwide. As most businesses were caught unprepared to handle this kind of risk and uncertainty, the pandemic has caused panic in the business world. The government and healthcare industry provided measures to reduce the virus's widespread spread, significantly reducing the threat. These precautions include lockdown, international travel restrictions, social withdrawal, and quarantine (Monmousseau et al., 2020). The pandemic affected Delta Airlines' transportation business by disrupting daily operations. Inadequate preparation has significantly contributed to the high levels of destruction Covid 19 has caused to the company despite having a prior risk management strategic plan. Delta Airlines has implemented several measures and strategies over the last six months to deal with the pandemic and resume full operations.
First, the company devises various risk management strategies to ensure operations resume. These include reducing the local and international flight capacity to accommodate the low demand and increasing passenger space per the social distancing requirements. In doing so, the company is safeguarding its workers' and clients' health and safety.
Second, the business introduced a brand-new cleaning procedure that included high-touch sanitation before each flight and electrostatic disinfectants on aircraft. It also modifies their flight by obstructing the middle seat, requiring staff and customers to wear masks and maintain social distancing (Delta Air Lines, 2020).
Thirdly, the business collaborated with medical facilities like Quest Diagnostics and the Mayo Clinic to test workers regularly. Additionally, a plexiglass shield is installed to improve social distance measures. In order to establish contact tracing and protect customers and staff, Delta airline company teamed up with the Centers for Disease Control and Prevention (Delta News Hub, 2020). While the business resumes regular operations following the Covid-19 pandemic effect, contact tracking ensures the safety of the workforce, customers, and neighborhoods. It also worked with Aeroporti de Roma and Hartsfield-Jackson Atlanta International Airport to create a testing program that facilitated regular operation and permitted entry without quarantine in several nations, including Italy.
Along with financial incentives, the airline company Delta manages the financial risk brought on by the COVID-19 pandemic. For instance, the business decreased fuel costs and decreased capacity (Delta Air Lines, 2020). Additionally, it handles the expenses related to employee leaves, consolidating facility costs, work schedules, and aircraft parking (Delta Air Lines, 2020). To accelerate the recovery process and boost adherence to Covid-19 health measures, the company obtained a grant fund of $5.4 billion in unsecured loans.
Advice for Improving Risk Management
Many organizations, particularly those in the air transportation industry, have learned from the Covid-19 pandemic in terms of risk management tactics. The Covid-19 pandemic has surpassed the limitations of aviation safety risk management measures, necessitating a review of risk management strategies by Delta airline company with a greater emphasis on risk prevention and reduction measures. While the business tries to resume normal operations without doing more harm, the preventative measure helps the small team ensure that all employees and customers are safe.
The risk management team should concentrate on taking action to lessen or share the impact of the risk because some risks cannot be prevented from occurring and are outside the organization's control. Delta airline company should evaluate and pinpoint risks not initially preventable under the risk management division. In addition to developing a recovery plan to ensure that regular organizational operations resume as soon as possible, the company will develop measures and strategic plans to lessen the impact of such risk and uncertainty.
Problem with Adverse Selection
Delta airline company faces several adverse selection issues that not all stakeholders are aware of. Most employees and passengers are unaware of the company's current anti-freezing system, which has the potential to overwork the engine and trigger alarms, forcing the plane to make an emergency landing (Matyszczy, 2019). Because they are unsure of what is wrong, the crew and passengers on board are in grave danger.
The Federal Aviation Administration has recognized the airplane engine issue as an urgent safety concern. Regulators, however, fail to take the proper action against the aviation company, resulting in ongoing issues that are well-known to most people, primarily engineers. According to Matyszczy (2019), Delta Airlines acknowledges the current threat but chooses not to inform passengers about the assurance of their plane's safety out of concern for losing business. When such a problem is disclosed, custom...