Dealing with Risk and Uncertainty. Mathematics & Economics Essay

Dealing with Risk and Uncertainty
Name
Institutional Affiliate
Dealing with Risk and Uncertainty
Introduction
The probability of both a known and an unknown outcome to occur in a given project is a decisive factor in the success or failure of the same. Risk refers to the chances of the known or unknown results occurring in a given business activity. The mitigation of effects of the known and unknown factors characterizing the possible outcomes of business activities, projects, or transactions calls for the implementation of effective risk management strategies. Such interventional measures function to enhance the sustainability of business entities across the diverse sectors of the economy. However, the preferred risk management strategies in alleviating or mitigating the risk factors in a given project often create a gap or uncertainty towards their efficacy in achieving the desired outcome. It is therefore important for business organizations to embrace effective risk and uncertainty management strategies to enhance their sustainability in the highly competitive markets across the globe. The airline industry makes for one of the sectors of the economy with a wide range of risk factors that require effective interventional measures for the firms to remain afloat. The break out of the Coronavirus pandemic in late 2019 exposed different airlines to unprecedented risk factors and uncertainty in the highly competitive market bringing the business to a standstill. The response measures embraced by Delta Air Lines against the adverse effects of COVID-19 on the industry provide an excellent framework for the analysis and evaluation of how business organizations deal with risk and uncertainty.
Evaluation of the company’s recent actions
The containment measures for COVID-19account for a significant reduction in the demand for air travel across the world with airline companies reducing their business operations such as air travel to almost 90% with a majority of the companies. Airline companies face the risk of bankruptcy and uncertainty over the return to normalcy in business operations as a majority of the organizations are forced to shut down their daily business activities including air travel. Delta Air Line has adopted various responses and interventional measures against the risk and uncertainties posed by the novel Coronavirus. The risk management strategies embraced by the company focus on the achievement of two primary outcomes; enhancing the safety and health of both the consumers and employees and reducing the company’s operational capacity to address the declining demand CITATION Del20 \l 1033 (Delta Air Lines Inc., 2020). Among the measures taken to maintain the company’s liquidity is reducing the domestic and international operational activities by 80% and 90% respectively CITATION Del20 \l 1033 (Delta Air Lines Inc., 2020). The company also endeavors to extend the expiration of consumers’ traveling credits in bids to increase consumer’s flexibility in re-booking and planning their travel arrangements.
The outlined measures function to maintain the firm’s consumer base while also enhancing the quality consumer experience, which functions to alleviate the risk of losing ...