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Executing for “Day Of” Airline Operational Excellence

Airline Leader

In my last column, I tried to answer the question raised by some airline executives: Can an airline achieve operational excellence and marketing innovation at the same time?

Summary
  • Airlines now have access to comprehensive data and capabilities to integrate data across different departments for operational excellence and marketing innovation.
  • Data-driven platforms can facilitate the integration of sub-functions within an airline's commercial and operations space for real-time system solutions.
  • Meticulous "day of" execution is crucial for integrating data and deriving actionable intelligence for customers and the business.
  • The challenge lies in aligning strategic and tactical decisions, balancing commercial and operational considerations, and making meaningful changes in decision-making processes.
  • Advanced technologies can optimize decisions and actions at a system level and in real time, reducing variances in arrival times and improving operational robustness.
  • Achieving operational excellence requires managing assets and infrastructure in real time and within a system-wide perspective.

My answer is emphatically yes, given that:

  • Airlines now have access to more comprehensive data and a suite of capabilities to integrate the data located in different departments of an airline (along with computational power, predictive analytics, prescriptive actions, and "day of" operational flexibility) to prevent defects and real-time communications;
  • Data-driven platforms can now facilitate the integration of numerous sub-functions within an airline's commercial space and within its operations space (system over silos) for a system solution in real time, as well as between the two spaces;
  • Integrated data and platforms, operating in the cloud, can make the most of customer relationships, employee relationships, and "day of" operational outcomes.

However, based on my experience, the real challenge lies not in the concept or the plan, but the meticulous "day of" execution to integrate the data (a) to derive actionable intelligence relating to customers and the business, (b) to perform the analyses on a system-wide basis as well as in real time to identify potential constraints/defects, and (c) to introduce meaningful changes in decision-making processes/actions to adapt to the information age and a digital future, and the fast-changing competitive dynamics.

The first part of the airline execution challenge is to align strategic and tactical decisions relating to, for example, the schedule. Commercial groups in airlines develop schedules months in advance based on forecasts of passenger traffic, competition, revenues, costs and profitability. Then operating groups take over the planning necessary to meet the schedule based on dozens of operational considerations such as crews, maintenance, airport facilities and services, gate and ramp workloads, and the ATC constraints. However, operations groups focus on the alignment of resources from the viewpoint of efficiency and infrastructure and asset productivities locally (for example, more efficient crew schedules). Then revenue management groups take over closer to the flight to maximise the revenue generated by flights. The execution challenge relates, as pointed out in the last column, not only on the need to balance commercial and operational considerations, but also strategic and tactical, "day of" decisions, and, more importantly, actions.

Take, for instance the recent desire of some airlines to focus on D-Zero and A-Zero, relating to on-time departures and on-time arrivals. To implement a D-Zero initiative, an operating group took into consideration, for example, not only numerous internal logistics (relating to crews, gates, baggage, catering, maintenance, ramp congestion, etc.), but also external factors, such as ATC and airport facilities (runways, taxiways, ramps, and repeatable patterns, etc.). Some airlines then decided to modify the D-Zero initiatives on an ad-hoc basis by holding back some aircraft to accommodate late-arriving passengers, tactical decisions, based on information from pilots and dispatchers about their ability to make up the time during the flight.

These tactical decisions are clearly in the right direction to reduce costs and or improve customer service, but the tactical decisions made are based on optimisations at the local level - that is, a combination of local factors, such as this aircraft (tail number), this crew, this gate, this ramp area and its workload, and these three late arriving passengers. Advanced technologies are available not only to compute these factors, in real time and at the system level, the impact of the delay, due to the late arriving passengers, but also to compute the value associated with each delayed passenger, based not just on the monetary value of each ticket, but also each late arriving passenger's frequency of travel, recency of travel, and influence in social media.

The main point is that, with the availability of new operational, real-time optimisation, planning systems, incorporating new technologies and much more comprehensive data, it is now possible to make optimal decisions and take actions at a system level and in real time relating to the day of operations. For example, advanced technologies can predict not only weather conditions much more accurately across a given region during the day of operations, but also ATC congestion (that is, queuing of arrival flow at the destination) more accurately during the day of operation, to identify and reduce significantly the variance in arrival times. Let us not forget that schedules are developed and implemented through the use of two lenses, one that focuses on revenues, and competitive positioning, while the other optimises the use of assets and the infrastructure (including its synchronisation), and assets, costs (crew, fuel, etc.), and noise. There is often a conflict in the outcomes viewed from these two lenses, in that a schedule may be optimal but not flyable. However, even when the resulting schedule may be optimal and flyable, the airline operation may not be robust enough to mitigate variances in the flight and dwell time (time between the arrival fix and the gate) in real time. This variance, and its cumulative effect, would depend on the departure ramp congestion, departure queue, pilot's chosen speed, ATC actions, queue at the arriving airport, descent profiles, taxi times, and gate changes in real time. And passengers feel the effect in the actual variance times (45% on time one day and 85% the next day), not averages in variance times (70% during a month, for example).

To make a schedule optimal, flyable, and an airline's operation robust, (from a system's perspective), operational groups can now work a few hours ahead of the predicted problem and develop, for example, multiple scenarios (graphically illustrated based on predicted trajectories) to determine a better outcome (based on profit, schedule, crew legality, weather, etc.). Decisions can be made, and actions taken, working within the ATC and airport configuration, relating to the predicted queue at the arrival airport, for example, to slow down or speed up different tail numbered aircraft, while en route, to minimise the problem with a delayed flight (that is, prescriptive actions for defect prevention). ATC professionals make decisions, as they should, optimising the aircraft flow in their local airspace sector control system within the safety and efficiency frameworks, but not what may be in the interest of a particular airline from a business perspective with respect to flights arriving at a hub.

The challenge, achieving operational excellence, relates to execution - management of the assets and infrastructure, as well as its synchronisation, in real time and within a system-wide perspective to achieve better outcomes. Airlines are beginning to have access to increasingly sophisticated planning systems as well as relevant data and analytics. However, to capitalise on their effectiveness, it might help to create a Chief 'Day of Operations' Officer, in charge of executing the day of operations, working with a perspective that encompasses, a system vision, a real-time orientation relating to tactical decisions and goals for a given day, unconstrained thinking, and a willingness to look at non-standard solutions.