2. Research Design
2.1. Research Method
As discussed in Chapter 1.3, a scenario-based analysis can be implemented in many ways.
Facing uncertainty and a problem-specific scenario which has not been explored before, an exploratory approach helps to gain an overview of the conventional jet fuel problem.
An exploratory method assists to further concretize the issue and thus to conduct further focused research. This is done by a qualitative approach with in-depth interviews to get an insight in practice and highlight the uncertainties and problems. Using a quantitative method would restrict the possibility to explore unforeseen uncertainties and hinder further development into new uncertainties drawn out for the future.
To investigate the problem-specific jet fuel price scenario in the European airline industry, this research will use an explorative, qualitative based on intuitive logics approach. The Oxford Scenario Planning Approach developed by Ramirez and Wilkinson (2016) gives a general guideline and factors to include in the scenario analysis. This research is following a deductive method, which entails mapping and analysing uncertain factors and how they interact and have an impact on the environment. Furthermore, two mutually independent drivers will be selected using a cross-impact analysis which will lead to an either/or 2x2 matrix based on the definition of van der Heijden (Ramirez & Wilkinson, 2014).
34 Figure 4 describes the factors developed by Ramirez and Wilkinson (2016) to design scenario planning.
Figure 3 Factors To Design Scenario Planning (Ramírez & Wilkinson, 2016)
Firstly, the purpose and intended use are designed. This includes clarifying how the scenarios are used, why the time frame is used and who are the intended users (Ramírez &
Wilkinson, 2016). This research answers the following questions:
What strategic scenarios can be derived regarding the jet fuel supply in Europe by the European airline industry? What key drivers of uncertainty are identified by the European commercial airlines for the jet fuel price for 2040? What strategic options can be identified? Which strategic implications can be made?
With the research the possible pathways for the future for airlines is explored considering interrelations and uncertainties. The scenarios are suited to help airline fuel managers to explore future strategic possibilities. The timeframe of the scenarios is chosen to be 2040,
35 as general oil developments are more long-term and current forecasts reach until 2040.
Moreover, the carbon emission offsetting scheme will be effective by 2040 and reflected in the costs. Depending on the business model, there are other priorities regarding the jet fuel price (Hansman et al., 2014). To make the set clearly comparable the study is focused on airlines which participate in an alliance and have their hub-base in Europe, meaning the EU 28. Secondly, the design and scope of the intervention are determined. Both depend highly on the resources available and who is involved in the scenario planning (Ramírez
& Wilkinson, 2016). Before including industry experts, the environment has been investigated using a PESTEL-Analysis of the jet fuel market to identify factors from the present and past to get a better understanding of the present situation which can be found in Chapter 1.4.
In the second step, key uncertainties for the future of the European airline industry are developed by conducting in-depth interviews with industry experts. In total, twelve airline fuel managers in Europe have been contacted. Four in-depth interviews have been conducted with executives in the strategy department of European commercial airlines.
The interviews are anonymised, as the transcripts include details on internal company strategy and details and will therefore not be stated for protection reasons. Several organisations are thus included in the research to identify key uncertainties and how these factors connect.
The interviews were held via Skype and followed an adapted version of the seven questions approach by van der Heijden (Ringland & Schwartz, 1998):
1. Covering the vital issues: Would you identify the jet fuel price as a critical issue for the future?
2. Assuming a positive outcome: If things went well, being optimistic but realistic, what you would see as a desirable outcome in the European airline industry and jet fuel price?
36 3. Assuming a negative outcome: As the converse, if things went wrong, what factors
would you worry about concerning the jet fuel price?
4. Taking cultural changes into account: Looking at internal systems, how might these need to be changed to stay competitive?
5. Lessons from the past: Looking back, what would you identify as the significant events in the jet fuel price development which have produced the current situation?
6. Decisions to be made: Looking forward, what would you see as the priority actions which should be carried out soon?
7. What responsibilities can be taken: If all constraints were removed and you could direct what is done, what more would you wish to include?
The interviews were conducted between the 30th January 2017 and 10th March 2017. Each interview lasted on average forty minutes and are anonymised. The above stated questions are then analysed with the inductive content analysis framework by Mayring (2008).
Qualitative content analysis is based on three techniques. Firstly, summarizing the most important content to inductively create categories and thus arrive at the main statement of a quote. Moreover, the analysis explains unclear parts and clarifies the context and finally, structures quotes and shows the context by using categories. (Mayring & Gläser-Zikuda, 2008) Figure 5 shows the detailed steps conducted in the research. Firstly, the interviews are conducted and transcribed. Based on the transcription, the interviews are paraphrased and thus summarized to the main statements. In the step of generalisation, the paraphrases are invivo categorized and drivers are derived. In this generalisation process of the transcriptions, thirty drivers of uncertainty are determined. In a further reduction step, eight key drivers have been derived and then reconfirmed with the qualitative data analysis programme Atlas.ti. The anonymised paraphrases and deducted categories can be found in Appendix B and C.
37 Thirdly, the scenario drafts are defined and sketched. As the deductive method is used, two uncertainties which are mutually independent are determined as axis which best support and organize the other uncertainties (Ramírez & Wilkinson, 2016). With the key factors developed, a 2x2 matrix based on van der Heijden (2002) was created. Each scenario includes all key drivers included.
The fourth step develops the scenario set. In this step the exact details of the scenarios were determined and elaborated. This includes the elements, making sure of the plausibility and names (Ramírez & Wilkinson, 2016). Also included are time-independent connections of uncertainties according to their relations to ensure plausibility. The scenario participants have been contacted to validate the scenarios and comment on the plausibility. In the description of the scenarios, interview references are embedded to validate the descriptions.
In the fifth step, translating and transplanting the scenarios, the scenarios are further developed to fit a wider set of stakeholders and see their context. The aim is to make the scenarios more universally and usable for a wider context (Ramírez & Wilkinson, 2016).
To translate and transplant the scenarios, additional stakeholders which have not participated in the scenario building have been interviewed to confirm or challenge the created framework. Firstly, all stakeholders involved will be identified in a stakeholder analysis to expand the view from commercial airlines to a more global context. Regarding the business problem, the degree of power and interest of the stakeholders is determined and depicted in a matrix (see Figure 6) (Van der Heijden et al., 2002).
Figure 4 Qualitative Content Analysis Conducting
interviews
Transcribing Interviews
Paraphrasing Interviews
Generalising
& Creating Drivers
Reduction To Key Drivers
Revalidating Results
38
Figure 5 Relative Position For Stakeholders (Van der Heijden et al., 2002)
In the last step, the scenarios are embedded. This includes reframing and rehearsing the created scenarios based on the feedback of the scenario participants and additional stakeholders (Ramírez & Wilkinson, 2016). The scenarios are then used to draw strategic implications for the long-term development of the European airline industry in regards to jet fuel price developments.
The Oxford Scenario Planning Approach includes one more step which can be not executed due to time constraints. In the sustaining scenario planning capabilities, the goal is to continuously improve the capabilities by developing and testing new methods and applications (Ramírez & Wilkinson, 2016). As this concludes doing a long-term project, it was not possible to include this step into the research. Generally, the Oxford Scenario Planning Approach entails an open methodological approach to fit the purpose of the learners. Nevertheless, workshops and discussion groups are implemented in most of the
39 cases. Due to cost constraints and scope, only phone interviews have been utilised for research.
Summarized, the steps depicted in Figure 7 based on Ramirez and Wilkinson (2016) and the Oxford Scenario Planning Approach were taken in this research. As the approach is an iterative approach, the steps are illustrated as a circle.
Figure 6 Scenario Planning Method
Define purpose and use:
research question and goal
Design and Scope:
PESTLE-Analysis and in-depth interviews
Define and sketch scenario:
Qualitative Content Analysis, Key Drivers
Develop scenario set:
elements, name, revalidation Translating &
transplanting scenario:
Stakeholder Analysis, revalidation with
stakeholders Embedding scenarios:
reframe and rehearse
40