Airline Cost Management through Operations Planning and · PDF file · 2014-08-31Airline Cost Management through Operations Planning and Control ... Operations Control (OCC), Airport

Airline Cost Management

through

Operations Planning and Control

Bill Johnson Airline Cost Conference

Geneva – August 25-27, 2014

25-27 August, 2014 Airline Cost Conference

Geneva

Over 45 years in aviation and airline industry

Pan American World Airways, Delta Airlines,

Fueling and Ground Handling Companies,

Operations Consultant to numerous airlines worldwide

Airport and System Operations

Cost Management / Control

Performance Analysis

IATA Senior Consultant – Airline Operations

Operations Efficiency and Cost Management

Operations Control (OCC), Airport and Ground

Operations, Fuel Efficiency

Best Practice assessments and implementations

2

Agenda 0900 - 0930 Introductions and Opening Remarks

0930 – 1015 Operations Planning

1015 – 1045 Break

1045 – 1215 Operations Control

1215 – 1330 Lunch

1330 – 1500 Operations Cost Management

Cost of Delay

1500 – 1530 Break

1530 – 1630 Operations Management - exercise

1630 – 1645 Operations Cost Assessment – explanation

1645 – 1700 Summary – Key Takeaways

1700 Closing Remarks – ACC Update Information


Geneva

3

Format for Today’s Meeting

our goal is to be as interactive as possible

great value in sharing viewpoints, priorities,

processes

less presentation and more discussion

request your active dialogue and participation

team grouping and discussion


Geneva

4

The Industry Challenge


Geneva

5


Geneva

6

Cost of Operations, 26%

Fuel, 31%

Maintenance, 12%

A/C Ownership, 10%

Distribution, 6%

Charges, 9%

Pax Services, 5% Others, 1%

Total Airline Operating Cost: US$ 686 Billion (2013)

Airline Operations - Complexity

Few industries have to

profitably manage so many moving parts


Geneva

7

The schedule/operations model is one of the most complex


Geneva

8

Airline Operations - Complexity

Few industries have to

profitably manage so many moving parts

in so many geographically separate locations

dependent on performance of so many others - ATC, Airports, Vendors

subject to so many outside influences – regulatory, world events

with so much variability requiring immediate action


Geneva

All of which drive Cost All of which drive Cost

9

Airline Operations – Size and Scope Modern airlines are complex operations & business structures

Ever-changing route structures

Frequent mergers and acquisitions

Expanding alliance marketing arrangements

Extremely susceptible to world events

Weather, Environmental


Geneva

10

Competitive Landscape


Geneva

11

Airline Operations – Size and Scope Modern airlines are complex operations & business structures

Expanding route structures

Frequent mergers and acquisitions

Growing alliance marketing arrangements

Extremely susceptible to world events Weather, Environmental

Political

Economic

Competitive


Geneva


12

The complexity and frequency of required near-term planning

changes and daily operations changes are ever increasing

The complexity and frequency of required near-term planning

changes and daily operations changes are ever increasing

Airline Operations – Constant Change

Every day is an irregular operation

IRROP ???


Geneva

13

IRROP - Irregular Operation

Any deviation from published or planned schedule

Delays

Cancellations

Diversions

Ferry Flights

Extra flights


Geneva

14

Airline Operations – Constant Change

No airline schedule is ever executed as

planned

Airline schedules are constantly changing

from planning phase

to day of execution

“a schedule is a plan to deviate from”


Geneva


15

OECM OECM

Operations

Cost Scope

Overfly

Navigation

Landing

Charges

Overfly

Navigation

Landing

Charges

Ground

Ops

Ground

Ops Flight

Ops

Flight

Ops

Fuel Fuel Opns

Planning

Opns

Planning

OCC Operations

Control

OCC Operations

Control Supply

Chain

Supply

Chain

Tech

Ops

Tech

Ops

Network

Planning

Network

Planning

Commercia

l

Commercia

l


Geneva

16

Commercial and

Network Planning Long-term strategic business plans

Which markets to serve

What type of operation

Which aircraft type


Geneva

17

Note: Network Planning is the subject of another IATA program

Overfly

The focus of today’s presentation

Operations Planning

What is Operations Planning ????

What are some characteristics of effective Operations

Planning ???


Geneva

18

Operations Planning

Nearer-term tactical operations plans

Schedule components – frequency, timing,

aircraft type

Resource requirements – number of aircraft,

crew, manpower, facilities

Schedule requirements – flight-time, ground-

time, servicing, maintenance


Geneva

19

Operations Scheduling Final Planning Phase

Converts operations plan requirements into actual work

schedules for

Airport facilities

Aircraft

Crew

Maintenance

Service resources


Geneva

20


Operations Control

What is role of Operations Control ????

What are some objectives of effective

Operations Control ???


Geneva

21

Operations Control (OCC)

Management of daily operations

coordinate operations and resource changes

to deliver schedule and service as planned

Manage Irregular Operations

minimize schedule disruptions

service failures

and lost revenue


Geneva

22

Operations Planning and Control Timeline


Geneva

23


Operations Planning - produce the schedule

Operations Control – manage deviations from schedule


Geneva

24

Relationship to Operations Cost Management Relationship to Operations Cost Management


Geneva

25

***

****

****

****

N

ote

: T

his

is

an

op

tio

na

l tr

an

sit

ion

sli

de

*

****

****

****

** *************** N

ote

: Th

is is

an

op

tion

al tra

ns

ition

slid

e ***************

Thank you!


Geneva

27

Airline Cost Management through Operations Planning and · PDF file · 2014-08-31Airline Cost Management through Operations Planning and Control ... Operations Control (OCC), Airport

Documents