China Airlines as a complex system

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MINISTRY OF EDUCATION, YOURTH AND SPORT OF UKRAINE

NATIONAL AVIATION UNIVERSITY

Air Transportation Management Department

TERM PAPER

(EXPLANATIONAL NOTE)

On discipline“Basics of Systems Theory and Management”

Topic: «China Airlines as a complex system»

Composed by:

FML 309

Moiseeva N.

Kyiv 2012

ABSTRACT

This course work consists of 31 pages, 2 table and 4schemes. In the process of writing the work the 5 resources were used, including online resources and further reading.

The object of study of this course work is“China Airlines”, which is considered as a complex system. Purpose of the researching is to generalize the theoretical knowledge of students on general systems theory and systems analysis procedure and practical skills of a systems approach to the analysis of the transport company as a complex system.

Upon completion of this course work there were purchased some knowledge and skills in the analysis of complex objects, as well as a clear definition of their goals.

Our task is to analyze “China Airlines” by terns of system and give the detailed description of its properties, characteristics, activities and functions. Also, the investigation of the internal and external environment, its influence to the functioning of the company takes place in this work.

List of key words: system, system analyzes, “China Airlines”, structure, classification, goal , resources, hierarchy tree of goals, subsystem, stability, etc.

A LIST of SYMBOLS, UNITS, ACRONYMS and TERMS

The main terms for the complex system characteristics can be represented in following way:

A system is a set of elements that are in certain relations with each other and forming a certain coherent unity or a system is an object, a process in which elements involved are, linked by some relationship.

An element is a division threshold of systems (an indivisible part) from the point of view of the aspect of considering a system, solution of a specific task and set objectives.

A subsystem is a part of system with some relations. Any system consists of subsystems; any subsystem of any system itself can be considered a system. The properties of integrity and purpose are characteristic of any subsystem.

Communication provides system integrity according to its definition limits the degree of elements freedom after they begin to interact and characterizes the system's structure (statics) and functioning (dynamics).

A structure is the organization of relations between elements and subsystems, it is all that brings order to a set of objects, i.e. set of relations between parts of a whole, necessary to achieve the goal.

A goal is a description, representation of the most desirable state of the system, the result of deliberate human activity predicted in advance, what the person should seek, and the model of the desirable future.

Behavior is a set of changes in the system, its response to external influence.

Balance is the ability of the system to save its behavior as long as it is needed, in the absence of external influences that lead it out from the state of rest, (or under permanent effects).

Stability is the system's ability to return to equilibrium after it was withdrawn from this state under the influence of external factors.

System's description (specification) is a description of all its elements (subsystems), their relationships, purpose, functions in some areas, i.e., all admissible states.

Integrity, coherence or relative independence from the environment and systems (it is the most essential quantitative characteristic of the system), if coherence disappears the system itself disappears, although the elements of the system, and even some ties, relations between them can be saved.

Availability of subsystems and relations between them, a structure or the presence of the system's structure (this is the most essential qualitative characteristic of the system), the disappearance of the subsystems or relations between them may cause the system to disappear.

Emergence of the properties or their not being innate to the properties of elements is the effect of organization, is the result of initiation between the elements of synergy.

Stratification is defining a system family of models (striation), each of which describes behavior of a system from the point of view of its respective level of abstraction.

The multilayered hierarchy is a family of sequentially solvable problems. Each layer is a block that makes the decision, or level of complexity of the decision made, allocated to reduce uncertainty.

Multiechelon(organizational hierarchy) is represented as independent subsystems that cooperate.

SA- System Analyzes

Plan

INTRODUCTION

I. Theoretical part

1.1 Description of the airline in terms of systems theory

1.2. Characteristics of the system and its properties

II. Analytical Part

2.1 Description of the structure of the airline (for multiple features) and the structure of its subsystems, their analysis

2.2 Description of the environmental features of the transport company

2.3 Analysis of the main activities of the airline, identifying the main goal, other goals. Building the “objective tree” of the airline

III. Conclusions

REFERENCES

INTRODUCTION

China Airlines (CAL) - is the largest airline in Taiwan and the flag carrier of the Republic of China. Although not directly state-owned, the airline is owned by China Airlines Group, which is owned by the China Aviation Development Foundation, which is in turn owned by the government of the Republic of China.

Generally, airlines are increasingly important and rank is not the first place in the speed of transportation, facilities, quality of service as passenger and freight at different distances to the most remote corners of the world. Nowadays, passenger or cargo can be delivered in any country for a short time.

Topic of this course paper is rather important in our time as grows in air-transportation system is observed. Our task is to analyze “China Airlines” by terns of system and give the detailed description of its properties, characteristics, activities and functions.

The aim of study of this course work is “China Airlines”, which is considered as a complex system. Purpose of the researching is to generalize the theoretical knowledge of students on general systems theory and systems analysis procedure and practical skills of a systems approach to the analysis of the transport company as a complex system.

I. Theoretical part

1.1 Description of the airline in terms of systems theory

transport airline ecological

System - is a set of elements associated with each other, which forms one object to achieve the goal and needed resources.

The main features of the system are:

1. Integrity, coherence or relative independence from the environment and systems (it is the most essential quantitative characteristic of the system), if coherence disappears the system itself disappears, although the elements of the system, and even some ties, relations between them can be saved.

2. Existence of subsystems and relations between them, a structure or the presence of the system's structure (this is the most essential qualitative characteristic of the system), the disappearance of the subsystems or relations between them may cause the system to disappear.

3. Relation with the environment of shared resources; possibility of separation or abstraction from the environment.

4. Subordination of the whole organization to some goals.

5. Emergence (The system property is not the sum of the properties of parts, property of the system depends on the properties of elements, the combined elements to the system may lose a number of properties which were inherent to them outside the system, i.e. the system as it suppresses some of the properties of its elements.

6. Synergy is increasing the efficiency of the integration. Synergetics is a science of nonlinear self-organizing processes in nature and society.

7. Additivity (summative) is an independence, isolation, that is, regularity, dual with respect to integrity. Property of additivity is shown in the system as it disintegrated into independent elements.

Let's consider features of the system on the example of “China Airlines”. "China Airlines" is integrated organization, which incorporates various departments, divisions, services and abroad representations; it is network, with strong ties between its parts (transportation of passengers, cargo, mail, and organization of technical personnel, airline pilots and other.) These complexes are the subsystems of the airline. A variety of services and departments of the enterprise are the components of the system. It is an example of integrity and existence of subsystems in the airline “as a system”.

China Airlines (CAL) - is the largest airline in Taiwan and the flag carrier of the Republic of China. Although not directly state-owned, the airline is owned by China Airlines Group, which is owned by the China Aviation Development Foundation, which is in turn owned by the government of the Republic of China. The airline, with headquarters in and flight operations from Taiwan Taoyuan International Airport, flies to destinations in Asia, Europe, North America and Oceania. China Airlines has a strong presence in the Southeast Asia, East Asia, and Northeast Asia. The airline started scheduled chartered flights between Taiwan and China on July 2008. Most flights serving this market are concentrated at Shanghai, Guangzhou, and Beijing. China Airlines has operated the Hong Kong route since 1967, which is the airline's most profitable market. China Airlines signed an agreement to begin the process of joining the SkyTeam airline alliance on September 14, 2010 and officially became a full member on September 28, 2011. This was marked by an update to the logo of the airline and the typeface in which "China Airlines" is printed. This information about airline shows us the existence of relation with the environment of shared resources and at the same time the ability of separation with the aim of reaching some results (3rd feature), because of without relations with environment but at the same time with ability to have own rules and separation company doesn't have any chance to be competitive in the aviation market.

"China Airlines", as well as any other company aims to certain goals. It can be profit, maintaining its leading position in the aviation market, to be competitive, to improve statistical, financial and economic performance, to provide qualitative service, etc. Activity of every department it directed to reach this aims. This makes it possible to confirm the presence of the fourth feature - Subordination of the whole organization to some goals.

And what about the emergence, synergy and additivity it is obvious, that high quality functioning of different departments with the same aim leads to reaching more complete result.

Summarizing above listed information, "China Airlines" is a system according to every feature.

If we consider the divisions, departments, airline services as a subsystems, then they can be analyzed as a separate systems with its structural elements and relationships. On the other hand, "China Airlines" is supersystem regarding these systems.

So, for full analysis it is necessary to analyze every subsystem and its place in supersystem. In our case - to understand the structure of each department and what benefit it carries to “China Airlines”.

1.2 Characteristics of the system and its properties

Classification of systems can be carried out on the set of criteria. Classification of systems is often impossible to be determined and depends on its objective and resources. We will consider the following classification of systems (other criteria of systems classification are possible):

1. Based on a system's relation to environment:

· Open system (exchanges its resources with environment);

· Closed (doesn't exchange resources with environment).

2. Based on the origin of a system (elements, connections, subsystems):

· Artificial system (tools, mechanisms, machines, robots, works etc.);

· Natural system (animate, inanimate, ecological, social etc.);

· Virtual system (i.e. imaginary system: although it doesn't actually exist, nevertheless, it operates as if it actually existed);

· Mixed system (economic, technical, organizational structures etc.).

3. Based on the description of the system's variables:

· Qualitative variables (they have only contextual description);

· Quantitative variables (they have variables discretely/ continuously described in a quantitative way, i.e. the system is described with the help of quantitative variables);

· Mixed qualitative - quantitative type (includes qualitative and quantitative variables).

4. Based on laws description that refers to functioning of a system:

· “Black box type” (it is a completely unknown law of a system's functioning, only input and output information of a system are known, but the system is unclear);

· Non-parametrical system (a law isn't described, only some a priori properties of the law are known, i.e. the parameters are unknown);

· Parametrical system (a law is known within the parameters and this law can be related to the class of independence, i.e. the parametrical system contains parameters);

· “White box type” (it is a well-known law, i.e. when laws of a system are transparent).

5. In accordance with the type of a system control (in the system itself):

· Systems controlled from the outside (without feed-back, regulative system, systems structurally controlled by means of information);

· Systems controlled within the system (self-controlled or self-regulative system, this system is automatically controlled and regulated, and automatically adaptable, it adapts with the help of controlled state changes that in their turn self-organize the system, i.e. the states change their structure optimally in time and space. This helps to organize the structure under the influence of inner and outer parameters);

· Mixed type control (automatic, semiautomatic, automated and organizational).

"China Airlines" is a complex system, because it includes a large number of systems, subsystems, components that are in close connection among themselves and with external systems. Since this system is complex, it means that it is multifunctional (because this company performs a variety of functions - training, organization of passenger and cargo transportations, repair and maintenance of aircraft, etc.) and multipurpose (company sets itself targets depending on their functions as a significant number of functions leads to a large number of targets).

“China airlines” system :

is tangible (really exists);

open - because there is an exchange with the environment;

based on the description of the system's variables - mixed (available both qualitative and quantitative variables);

based on origin - artificial (man-made and operated using the human factor);

based on the method of administration(system of control) - combined (because the airline is regulated and externally - laws, regulations and documents, international conventions, competition, etc; and inside organization (the organization of personnel, organization work to repair the aircraft, the organization of staff, etc.);

based on the nature of the interaction of elements is coordination and hierarchical (because you can trace and equal elements, and the elements of subordination).

“China Airlines” can be described as adaptive, because it is able to adapt to changes in external factors and in it does not lose its identity. According to this facts we can conclude that this system is also dynamic.

II. ANALYTICAL PART.

2.1 Description of the structure of the airline (for multiple features) and the structure of its subsystems, their analysis

The structure of the system - is the organization of relations between elements and subsystems, it is all that brings order to a set of objects, i.e. set of relations between parts of a whole, necessary to achieve the goal.

A structure is characterized by its organization, steady orderliness of its elements and relations. In complex systems a structure doesn't reflect everything, but only the most essential elements, components and relations which change a little during the system's current functioning and provides the system's existence and its basic properties. In simple, completely determined systems, the concepts of system and structure coincide completely.

Structural relations possess relative independence of elements and can act as invariants for transition from one system to another, transferring the laws revealed and reflected in the structure of one of them, to others. Systems can have a different physical nature. On the other hand, the same system can be represented by different structures depending on the stage of knowledge, aspect of consideration, the purpose of the system's creation. Basic types of structures are: Hierarchical, treelike structures, Network structure, Matrix structure and linear stuctures. In our case we have Hierarchical kind of structure.

Practically "China Airlines" has a clearly defined organizational structure - a number of subsidiaries, divisions, various systems (industrial, commercial, financial, etc) that have established work to ensure regular passenger conveyance, cargo and mail, excellent work of ticketing system, registration system, aircraft maintenance works and others. The elements of this structure can be considered a passenger service training of some loading and unloading, repairing aircraft, flight test aircraft before others.

The company also has the officers, who are subject to all heads of departments, services, departments.

Structure of "China Airlines" has a Hierarchical structure and consists of the following elements :

1. Working Committee (Administration);

2. Transportation department;

3. Secretariat;

4. Executive Administrative Council;

5. Administrative Committee;

6. Safety and security department;

7. Information Department;

8. Department of Buildings and structures;

9. Department of Fuel and lubricants;

10. Supply department;

11. Finance Department;

12. Department of health services;

13. Production Department;

14. Human Resources;

15. General Department;

16. Legal Department;

17. Department of Public Relations;

18. Information Department;

19. Management Planning department;

20. Executive office;

21. Scientific and technical management;

22. Air Traffic Control (ATC);

23. Department of Research and Development;

24. Commercial activities;

25. Department of freight and mail traffic;

26. Division of domestic passenger traffic;

27. Cabin service;

28. Department of international passenger traffic;

29. Regional Governance;

30. Advertising department;

EMPLOYEES

Total number of employees: 10,822

Employees in Taiwan: 8,952

Employees stationed overseas: 1,870

Organizational hierarchy - is the system is represented as independent subsystems that cooperate. Some (or all) subsystems have the right of decision-making. The hierarchical arrangement of subsystems in a Multi-echelon structure is stipulated by the fact that some of them are influenced or managed by other subsystems. Multiechelon structures are also called multi-purpose as certain freedom in identifying of purposes is given to subsystems as well

So, If the structure - is an organization of connections between elements and subsystems - all that brings order to the set of objects, is a set of relationships between parts of a whole system needed to achieve the target, the airline is an example multi-echelon hierarchical structure that can be schematically illustrated as follows, as shown in the picture:

In order to prove that the airline "China airlines" is really a system, it is necessary to show the fact that between the elements of the system there is a link, which ensures the integrity of the system, by definition, limits the extent of freedom of the elements after they come into communication 'Us and describes the structure (statics) and operation (dynamic) system.

If we talk about the direction of ties, they still are aimed at what direction they go in order from top to bottom, so that virtually all departments of companies subject to higher standing leadership (Safety Committee, the Secretariat Committee of Safety, Office of Security.) And such bodies and Safety Committee or Council of Shareholders are under the government of such bodies as IATA or ICAO.

According to the nature of relations in the airline “China Airlines” refers to relations management. And according to tie directions the can be as the direct the same inverse.

Structure of “China Airlines” transportations

Most of China Airlines' flights originate out of Taiwan Taoyuan International Airport, its main hub near Taipei, Taiwan. At Taiwan Taoyuan International Airport, China Airlines' flight operations are in Terminal 1 and 2. China Airlines' regional flights as well as European flights, are mainly concentrated in Terminal 1. Its long-haul flights, especially American, and Australian, are mainly concentrated in Terminal 2. Additionally, China Airlines and its domestic subsidiary Mandarin Airlines operate numerous flights out of Kaohsiung International Airport and Taipei Songshan Airport. China Airlines' focus cities outside Taiwan are mainly Bangkok's Suvarnabhumi Airport, Hong Kong's Hong Kong International Airport, and Osaka's Kansai International Airport.

Through the mid 2000s, China Airlines' route network was affected by the political status of Taiwan, which has historically limited access for Taiwanese airlines to Europe and certain Asian countries. Because Taiwanese carriers did not have direct access to China, China Airlines used Hong Kong as its interline destination. China Airlines started to operate regular charter flights to China in 2008. The airline began regularly scheduled, direct cross-strait operations in December 2008, following the restoration of direct travel links.

Cargo

China Airlines Cargo is the airline's freight division, operating in Asia, Europe and North America. It operates a fleet of 19 freighters to 38 destinations around the world, in addition to utilizing the cargo space on its passenger aircraft.

China Airlines now serves 112 destinations in 28 countries and territories (including cargo) on four continents, with a well-developed Asian network.

Fleet structure

The China Airlines passenger and fleet consists of the following aircrafts:



From this table we can see, that “China Airlines” fleet consists of the 72 aircrafts ( 21 -cargo, 51- passenger).

Domestic and international routes

The airline, with headquarters in and flight operations from Taiwan Taoyuan International Airport, flies to destinations in Asia, Europe, North America and Oceania. China Airlines has a strong presence in the Southeast Asia, East Asia, and Northeast Asia. The airline started scheduled chartered flights between Taiwan and China on July 2008. Most flights serving this market are concentrated at Shanghai, Guangzhou, and Beijing. China Airlines has operated the Hong Kong route since 1967, which is the airline's most profitable market, generating 13.3% of its NT$121.9 billion (US$3.7 billion) revenue in 2006 with over 140 flights flown a week between Taipei, Kaohsiung, and Hong Kong.

China Airlines has flight on various destinations. Given routs we can observe in the lower table.



Prospects of development

From the point of view of SA it is very important to have scenario of further development of the company. “China airlines” in the practice uses such methods as brainstorming or writing scenarios. It is ought to say, that almost all aspects of the airline development are based on the fleet expanding.

Two of their earliest 747-400s (B-18271 and B-18272) have been given to Boeing and converted to Boeing LCFs for transportation of 787 parts. In return, four new 747-400s were delivered to China Airlines. The livery of one of the new 747s (B-18210) is a combination of the China Airlines plum blossom tail and Boeing's Dreamliner colors design. These were the four last passenger 747-400s to be manufactured and delivered, and feature the Boeing Signature interior in common with the 747-400ER and most notably the Boeing 777.

In an interview with Taiwan's Economic Daily newspaper, China Airlines' CEO announced a cabin upgrade of all the airline's Boeing 747-400s lasting from 2011 to 2012, at a cost of around billion New Taiwan dollars. The 747-400s will be have two new configurations, with six in a two class configuration of Dynasty Class and Economy Class for flights to regional destinations in Asia and to Amsterdam, and the others in a three class configuration of First Class, Dynasty (Business) Class and Economy Class for long haul flights to America. The first 747-400 in the two class configuration will be finished by the end of April, 2011.

China Airlines recently announced the intention of leasing more A330s or narrow-body aircraft in order to meet the increasing demands of regional routes and cross-strait routes. China Airlines also announced that the decision of the long-haul fleet plan will be announced by the end of 2012 at the latest.

The airline is undergoing a fleet renewal and simplification program. The A300-600R has been replaced with the A330-300 and there are plans for a long-haul fleet renewal. On December 11, 2007, China Airlines signed a letter of intent to purchase 20 Airbus A350-900s to replace their fleet of Airbus A340s, and the order was confirmed on January 22, 2008. The Airbus A350 will offer 2-class (Business and Economy) service with 327 seats, with the business class offering fully lie-flat beds.

In June 2012, Huang-Hsiang Sun, the president of the company, said that the airline was considering models such as the Airbus A350-1000 and Boeing 777-300ER to replace older Boeing 747-400 aircraft on long-haul routes, with the decision being finalized within the next 12 months. In addition, it was disclosed that the airline was evaluating the purchase of more narrow-body aircraft, for use in expanding its regional operations.

China Airlines has announced the plan of expanding its cargo fleet by the induction of either A330-200 Freighters or Boeing 777 Freighters.

2.2 Description of the environmental features of the transport company

External environment - is a set of components of systems that are outside the system that interact with it and on it, but do not belong to her. Environmental factors of "China Airlines" include:

* Airline partners on the aviation market ( Domestic and International);

* Various laws, statutes, regulations, general rules of transportation which are the same for all carriers, international conventions, documents, etc.;

* Agencies, offices, brokers, both domestic and abroad;

* Competitors in the international market and the domestic market in all types of air transport (passenger, cargo, baggage and mail);

* Interaction with all forms of transport;

* Cooperation with airports that have international status and so on.

From the point of view of SA we know, that the existence of relations with environment is one of the key features of every system. Higher we have proved that airline is a system and now I will show how environment influences “China Airlines”.

“China Airlines” can be regarded as a system, and as a subsystem in large system of transportation, cooperation with leading airlines. Airline has close relations with many of the components of the environment. For example, the airline is working closely with other carriers. This enables it to expand card operations, increase range, improve passenger and freight turnover, and receive certain skills, explore new opportunities and improve the quality of service based on exchanges with their partners. Airlines cooperates with "China Airlines", also, in turn, expand geography of flights, improve the performance of their work and so on. "China Airlines” has interline agreements with the following airlines: Virgin America, WestJet. It signed an agreement to begin the process of joining the SkyTeam airline alliance on September 14, 2010 and officially became a full member on September 28, 2011.This was marked by an update to the logo of the airline and the typeface in which "China Airlines" is printed. Also given airline has codeshare agreements with the airlines denoted as SkyTeam members(Alitalia, China Eastern Airlines, Korean Air, etc.)

Also our airline is a member of various international organizations, which gives the right to carry passengers and cargo to the international space. Firstly, these organizations include the ICAO and IATA, which are the main control organs the market of international air transportations.

Entering into these organizations "China Airlines" set a goal to get equal rights to conduct business in the field of international air travel, free to compete with the other of airlines and also have access to recommended practices regarding the implementation flights IATA and ICAO, which help to avoid unforeseen incidents in space, or at any other period of aircraft operation.

Let's consider other environmental factors - competitors. Because the airline market "China Airlines" must constantly improve their quality of service, in the way of providing new technologies or registration, whether booking tickets follow the work of its agents, check qualifications of their employees and conduct courses for professional development, check the technical equipment sheds and more. All this is done in order to remain the leading position in the airline market both in China and abroad.

Now we can see, that "China Airlines" is a subsystem of a large transport system (Super-system) and has strong established relationships with all components of the environment.

Main threat in the aviation market are Japan airlines. Oddly enough, the crossing of flag-carriers (Taiwan based-airlines and Mainland China PRC based-airlines) occurred almost hourly at then British-controlled Hong Kong's Kaitak International Airport. The 1 hour 30 minute Taipei-Hong Kong route alone, between just two airlines, saw approximately 13-17 roundtrips flights per day (actual flight totals depending on day of the week and airline) per carrier (between China Airlines and Hong Kong-based Cathay Pacific Airways) this was indeed the busiest air corridor on the planet reaching the point where the service was purely operated by wide-bodied jetliners. Add to those frequencies at least seven additional airlines flying that single route. Adversely, other regional airports such as Bangkok, Singapore and Manila were entirely spared of this indignity imposed on Japan by China. But the combination of China's necessary access to Japan, the most highly prized aviation center in Asia, notably the slot-restricted Tokyo-Narita at the time, coinciding with the opening of China to the global trade markets of the world, Japan itself needed commercial aviation access to Chinese airports for pure business and competitive reasons and therefore acquiesced to China's insistence of air carrier separation. In retrospect, it now seems like a brilliant strategy on China's behalf to gain unfettered (as opposed to treaty negotiated) access to Japanese airports at levels only enjoyed by the United States. By 2010 however, this would all perish as direct nonstop flights between every major Taiwan and Chinese airports materialized for all carriers of both former enemy states.

As the conclusion, it is necessary to take into account the problems concerning the airport activity and functioning. “China Airlines” has strong position in the aviation market, it has its internal problems. There are a lot of strategies for airline improvement which will be implemented during the current year.

From the point of view of SA well-structured organization in the way of demand and supply analyzes carry out the benefits, with attract passengers and carco-clients to use this airline.

Advantages of “China Airlines” are the following:

· Convenient Reservation (When making a reservation, client need to only give membership card number for an express reservation.)

· Dynasty Package Benefits (Members can enjoy following benefits when they use Dynasty Package products each time)

· Birthday Gift Miles (China Airlines offers extra bonus of 2,000 miles as a birthday gift for Gold/Emerald/Paragon card members who travel with revenue tickets on China Airlines and Mandarin Airlines' flight during the month period of their birthdays. The extra bonus mileage will be credit to your account in the following month.)

· Upgrade Mileage ( With Upgrade to Paragon Membership, members receive 10,000 upgrade miles.)

· Welcome offer (With upgrade to Emerald Membership, members receive an exquisite gift. )

· Reservation Hotline (If a chosen flight is full when making a reservation,

Gold/Emerald/Paragon Members receive priority on the reservation waiting list.)

· Priority Reservation( If a chosen flight is full when making a reservation,

Gold/Emerald/Paragon Members receive priority on the reservation waiting list.)

· Advance Seat Selection (Dynasty/Gold Members and their companions are given seat selection.)

· Extra Baggage Allowance

(1) Based on piece system, each piece should not be over 32kg for First and Business Classes or 23kg on Economy class on flight to/from the Unites States and Canada. Weight system applies to other regions. (In accordance with IATA regulation, extra baggage allowance is subject to change without notice.)

(2) This benefit is only available on China Airlines and Mandarin Airlines flights. It does not apply to any connecting flights on other carriers. Where travelling involves a commencing flight from Europe or North America with an onward CI flight, the handling airlines will collect excess baggage fee all the way to the final destination. Member may contact CI branch office and claim refund for extra baggage allowance on CI sector by submitting receipt of payment. Baggage is limited to personal effects only. No merchandise may be included.

· VIP Lounge Usage Privilege ( Gold, Emerald and Paragon members may redeem their mileage to invite extra guests, other than the allowable number of their membership, to enter our self-operated airport VIP room together.)

· Incentive Mileage

In addition to actual and bonus mileage, for each flight on China Airlines an additional 20% in incentive mileage is credited for Paragon Members.

· Domestic Ticket Discount

Gold, Emerald and Paragon members may enjoy 10% discount off published fare for domestic tickets at designated ticket counters, other members are entitled 5% discount.

2.3 Analysis of the main activities of the airline, identifying the main goal, other goals. Building the “objective tree” of the airline

Each system necessarily pursues a target task. Target system - a priority in the state for the system, which is often expressed in the form target function.

Main Objectives of "China Airlines".

Any transportation company its has a number of tasks and purposes. And every company is trying fully realize them. Since the airline operates in a market economy the main problem is the competitive ability of enterprises to improve the quality of passenger service, fleet expansion and geography flights hold positions in the aviation market and, of course, profit. This issue deals with the marketing department.

Under the solving the problem of obtaining a sustainable profit, service marketing variable key components of the aviation market - the frequency of flights, their distribution by season and by time of day, the structure of commercial loading rates and benefits, as well as network airlines.

Marketing Service is designed to ensure compliance with traffic demand and the possibility of its satisfaction. If demand for transportation begins to fall, marketers need to find out the causes and take appropriate measures to address them. These measures may include: improving the company's image, improving service quality, review tariff structure, making more convenient for customers of schedule. Bringing offered capacities in line with demand can be achieved by reducing the frequency of flights, reducing the number of seats offered per week on this line and even suspend flights on certain routes.

An important aspect of improving the competitiveness of airline transportation market is the impact of marketing on their own production and financing to improve sustainable earnings. This effect is done using special software modernization:

- Improvement of air transport infrastructure;

- Improvement of commercial services;

- Improvement of personnel training;

- Improving sales system of transportation;

- Improving the organizational structure of the airline.

This marketing function also provides better coordination of all units airline, to the latter worked as a unified system of aviation. The disadvantage of the existing control system is that it operates not as an integral system, and as the sum of individual actions hierarchical divisions, each with its own purpose, sometimes conflicting goals of adjacent units. For example, a commercial service may interest income, but do not apply to expenditure as financial services, in contrast, is occupied only budget; summer service, delivery service, ground service may have their task not only targets associated airline. The company, which has levers such as air transport, system prices and sales system, must find an optimal combination of these funds to influence the market in order to ensure its development and success in competition with other airlines.

Important role is played by commercial service that performs the following functions:

- Attraction of passengers and freight customers on flights and controls the sale of passenger and freight traffic through representative agents and airlines;

- Development and conduction activities to improve the cost-effectiveness of existing international lines and on opening new ones;

- Controlling the maximum usage of the capacity ability of freight aircraft and conduction activities to improve economic load aircraft;

- Studying the market conditions of international transport and demand for passenger and cargo transportation and developing future plans for development of a network of “China Airlines”;

- Coordination and monitoring the business airline offices abroad;

- Supervising and implementation measures to expand the network of agents for the sale of the flights ;

- Providing payments to foreign airlines, companies and other organizations for received and services providing;

- Controlling of reported missions on the sold traffic.

If to develop the “Objective Tree” it will have the following presentation:

It is obvious, that the main aim of this airline (“China Airlines”) , and any other is to obtain the final profit. But along with the fact there are a number of other, less tangible goals that ultimately lead to the achievement of the first. All other sub goals (and there may be many) are under the influence of main aim. These include, for example, the desire to provide the most comfortable airline service, to be the safest airline, to offer qualitative and most delicious food in air passengers, charity, etc.

Financial situation of the airline (one of the main aims) has changed. The Revenue of “China Airlines” up to 2010 was NTD138,140 million ; Net income - NTD15,000 million . Up to 2012 situation has been changed and revenue has grown up to 13 percent.

As the conclusion, it is evident that the complex system of “China Airlines” provides a lot of activities concerning the suitable airline functioning and development of air transportation system of Ukraine in general. The “Objective Tree” describes the set and interrelations between main activities of the company.

CONCLUSION

During this course paper I have got the practical skills of a systematic approach to the analysis of the transport company. On example of "China Airlines" I have proved that the hauler is a complex system which consists of subsystems and components that are closely interrelated. I have gave the examples of subsystems, have indicated a relationship between them, and between the external environment.

Work include description of the airline as a system with different characteristics, analyzes of the structure of the system and its components, main activities of the company, identification of the main goals and objectives of the airlines, pointing out methods how to achieve them.

After the analysis of "China Airlines", using the theory of SA we practicaly conclude that it is one of the leading airlines in the market of aviation services. Airline provides a wide range of services: passenger and cargo handling, well qualified staffing, training and technical inspection, checking the technical condition of aircraft, charity, etc.

We have investigated main threats and unique advantages of this Airline. Main activities and functions of the company like a system are represented through the “Objective Tree” method.

The course paper has very important impact on the generalization and systematization of knowledge obtaining during studying the course “Basics of System Theory and Management”.

REFERENCES

Printed materials:

1. Yun G.M., Marinceva C.V. Basics of systems theory and systems analysis: Lecture course. - NAU, 2004. - 68 pages.

2. Mogilevsky V.D. Systems methodology. - M: «Economics», 1999. - 251 pages.

3. Surmin Y.P. Systems theory and systems analysis: Educational manual. - K.: MAUP, 2003. - 368 pages.

Electronic resources:

1. http://en.wikipedia.org/wiki/China_Airlines#Change_of_logo_and_livery.

2. http://www.china-airlines.com.

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