AIRLINE FORUM 2015

The Catch 22 of Cost Based OCC Decisions

Airline Operations Control

The Catch 22

05.09.20162

Decisions

consider

safety &

regulations

The Aviation Reality

Cost based

decision

making

requires

integrated IT &

real-time data

Outdated IT Systems

Airlines

burn

money

every day

Costs are not the issue

Manage your airline operations by exception

Airline Challenges

Manage your airline operations by exeption3 9/5/2016

Fragile schedules and ripple effect of

delays

Increased passenger expectations and choices

Economic instability

and uncertainty

Need to optimize asset utilization and efficiency

Difficulty creating accurate forecasts

Volatile fuel costs

How Airlines burn money every day

Manage your airline operations by exception4 9/5/2016

Many OCC work spaces are equipped with data silos

Many applications, not integrated and isolated data

Reservations

Airport

Slots

$€

Crew

Dispatch

FPL

NOTAM

Email

PDF

• Very poor decision support with available data

• Time required to get the necessary information

• Time required to take decisions

• Mediocre on-time-performance

Airline spend a lot of money on airport lounges, new aircraft, flat

bed C-Cl seats, but also on disruptions

3rd

All necessary information at a glance

• Critical weather at airports

• FTL of affected crew members on flights

• A/C restrictions and maintenance requirements

• Airport slots and ATC slots

• Operational costs for ACH/EQT, ETD, CNL

• Inbound & outbound PAX connections

N America

$12.1 bn31 airlines

12,608,000 flights

77,9%

$390 m / airlineWorld Total

$ 24.93 bn

$228 m / airline

ME

$567 m4 airlines

637,220 flights

77,8%

$141 m / airline

Asia

$8.1 bn33 airlines

5,296,120 flights

70,9%$245 m / airline

Europe

$3.3 bn34 airlines

5,238,457 flights

83,6%

$100 m /

airline

Source: IATA 2015

S America$0.86 bn

7 airlines

1,598,451 flights

84,2%

$122 m / airline

SM

What are the costs of an airline operations disruption?

05.09.20165

Re-active problem solution

Tools for early detection

Daily Usage / pro-active

Tools for curing

Prevention

Curing

Manage your airline operations by exception

How airlines burn money every day

05.09.20166

Many airline operations control center work

spaces are equipped today with data silos

Ops Controller using a cross-functional

integrated OCC IT systems save costs

Reservations

Airport

Slots

$€

Many outdated airline IT applications, not

integrated and with isolated data streams

Crew

Dispatch

FPL

NOTAM

Email

PDF

Very poor decision support with available data

Time required to get the necessary information

Time required to take decisions

Enhanced & fast operations decision support with all necessary information about

Critical weather at airports

FTL of affected crew members on flights

A/C restrictions and maintenance requirements

Airport slots and ATC slots

Operational costs for ACH/EQT, ETD, CNL

Inbound & outbound PAX connections

3rd

Manage your airline operations by exception

Let’s consider an aircraft has to be swappedACH or EQT – what are the costs of each of the following items?

With the given factors, the Ops Controller needs to look at some points:

• Aircraft restrictions (MEL)

• Aircraft version on this route?

• Pax capacity (off-loads), seating configuration (old or new C-Cl)

• Maintenance check for one of the aircraft considered?

• Aircraft lessor allows to fly to the specific destination?

• Runway long enough for B77W with possible high weight?

• Does the airport provide a GPU in case of an APU inop ?

• Crew type rating? Licenses of Crew ? Crew change?

• If crew is not changing, APIS?

• Operating costs (A321 vs A320)

9/5/20167 Manage your airline operations by exception

3rd

All necessary information at a glance

• Critical weather at airports

• FTL of affected crew members on flights

• A/C restrictions and maintenance requirements

• Airport slots and ATC slots

• Operational costs for ACH/EQT, ETD, CNL

• Inbound & outbound PAX connections

Let’s consider an aircraft has to be divertedDIV - what are the costs of each of the following items?

With the given factors, the Ops Controller needs to look at some points:

• The weather/visibility is not below minimum condition?

• The aerodrome is open?

• Firefighting is available in satisfying category?

• How many runways? (Only one might restrict the company minima)

• Lighting facilities for the runway all working? (If not, minima go down)

• Navigation facilities / instruments working? (If not, minima go down)

• Runway long enough for B77W with possible high weight?

• Does the airport provide a GPU in case of an APU inop ?

• Immigration facilities are available for international flights?

• How do we get the passengers to the hotel, to their connecting flights?

• How do we get the crew to the hotel, to their next flight?

9/5/2016Manage your airline operations by exception 9/5/20168

3rd

All necessary information at a glance

• Critical weather at airports

• FTL of affected crew members on flights

• A/C restrictions and maintenance requirements

• Airport slots and ATC slots

• Operational costs for ACH/EQT, ETD, CNL

• Inbound & outbound PAX connections

Complex OCC Decision Making Requires Sophisticated Decision Support Tools and Data Integration

05.09.2016NetLine/Ops ++9

Revenue – to be retained, lost

Crew – lost time, premium pay, accommodations

Maintenance – missed service, wasted resources

Labor – mechanic, ground service agent overtime

Passenger servicing costs -Interrupted trip expenses - hotels, meals, transportation, denied boarding compensation, frequent flyer awards

Any regulatory penalty or cost of delay (EU261)

Cost of passenger god will

IRROP Cost Considerations

How many passengers could be impacted – are there special accommodations passengers onboard

When is our next flight available for the passengers or on OAL – How long will each passenger be delayed in reaching destination

How disruptive is the reaccommodation for the passengers – overnight, long airport delay, multiple stops, missed connections

Are there adequate passenger & crew accommodations available

What type of market are we dealing with –history in this market – airport slots

IRROP PAX Considerations

Do we have an aircraft

Do we have a crew

What happens to the passengers

What happens to the revenue

How much does it cost

Are there any special circumstances

How and how long will this decision impact airline

What are the associated / future / indirect costs

Do I have an alternative

OCC IRROP Decision Tree

Integration of all kind of data is the key.Actual Data in Airline Operations

05.09.2016NetLine/Ops ++10

Movements

Critical weather

information

Delays

Crew

rotations

Passenger

figures

Transfer

passengersOperations IT

Airport Limitations

Airport Slots

Prevention is better than curingAll Identified Operational Infeasibilities listed

05.09.2016NetLine/Ops ++11

Modern OCC ManagementGet the potential mixconnex costs calculated

05.09.2016NetLine/Ops ++12

Modern OCC ManagementFigure out decision alternatives and related costs

05.09.2016NetLine/Ops ++13

Modern OCC ManagementFigure out decision alternatives and related costs

05.09.2016NetLine/Ops ++14

Decision Support – Which other tail for Kilo Bravo?Swap Candidate Filter

05.09.2016NetLine/Ops ++15

Decision Support – Which other tail for Kilo Bravo?Swap Candidate Filter – operating hourly costs per a/c

05.09.2016NetLine/Ops ++16

Decision Support with EU261 Costs IndicationPotential PAX compensation claims calculated

05.09.2016NetLine/Ops ++17

Filter out flights affected from a strike in a specific country and get the costs for potential operational decisions

05.09.2016NetLine/Ops ++18

Decision Support with Crew data in Airline Ops, however what’s the cos of CNL a flight with a check trainer assigned

05.09.201619 Manage your airline operations by exception

Management reporting with sophisticated toolsGenerating dashboard and KPI reporting

05.09.2016NetLine/Ops ++20

Management reporting with DeltaMasterGetting most out of the operational data analyzing the leg export

05.09.2016NetLine/Ops ++21

Recommendation for Airlines

05.09.201622

Don’t

compromise on

safety &

regulations

The Aviation Reality

Figure out a

cost model

which can

easily be

administrated

Keep it simple

Get rid of non-

integrated IT

systems and

save costs

IT Systems

Manage your airline operations by exception

Lufthansa Systems GmbH & Co. KG

Daniel R.J. Stecher

Senior Product Manager Operations IT Solutions

Salzufer 8

10587 Berlin

Germany

Tel. +49 (0)30 34007- 435

Fax. +49 (0)30 34007-100

E-Mail: daniel.stecher@lhsystems.com

www.LHsystems.com

05.09.2016NetLine/Ops ++23