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Five Steps Airlines Can Take to Prevent Parked Planes and Billions in Losses

Current Accounts | Forbes

Posted: 11/28/17

Five Steps Airlines Can Take to Prevent Parked Planes and Billions in Losses

It is a very basic, very simple production concept: If the production line stops, the revenue also stops. Unfortunately for airlines, shareholders and passengers, this basic concept is not something airlines fully understand.

Airlines, in their operational “day-of” essence, are geographically dispersed production lines. Airlines take in raw materials at the front end (people, bags, cargo, food, fuel, etc.), perform many services or processes with them and then deliver the finished product (passengers/baggage/cargo) to the destination curb or dock.

A quality airline product is a smiling customer, bag in hand, on time. Sadly, with airlines’ ever-present day-of production failures, this happens only 65% of the time (absolute on-time zero arrival, or A0), with the high day-to-day A0 variance and lack of product consistency being even bigger problems.

In airlines’ production process, predictable, on-time aircraft movement is the critical success factor driving costs and revenue. For example, aircraft movement is the largest value proposition for the customer (on-time arrivals are a valid basis for airline choice), the highest cost factor for the airline (nearly 70% of total), the production process from which all other day-of-flight processes take their cue (ground processes start only when the aircraft actually arrives, not at the “scheduled” or “estimated” times) and the largest producer of end-level defects and rework costs (cargo or passengers were not where they were promised, when they were promised, in good spirits or order, requiring productivity, cash costs and goodwill losses to remedy these defects).

So, if aircraft movement is absolutely critical to airline quality and profitability, why do airlines unnecessarily “park,” “hide” and “warehouse” their aircraft throughout the day?

  • Airlines park aircraft by highly buffering their flight schedules and gate times to hide variance.
  • Airlines park aircraft with overly complex boarding priorities and by charging for bags, slowing the boarding and deplaning processes.
  • Airlines park aircraft waiting for a gate.
  • Airlines park aircraft with crew-scheduling philosophies that split aircraft, pilots and cabin crews, dramatically increasing complexity, especially during irregular operations.
  • Airlines park aircraft by refusing to track and manage their aircraft trajectories and arrival/departure times in real time, something possible for the last 20 years.
  • Airlines park aircraft by canceling flights during irregular operations, with no consideration or capability for a quick restart of normal network operations.
  • Airlines hide aircraft with their aircraft spares policy and maintenance production processes.
  • Airlines force air traffic control to warehouse aircraft in highly structured routings in the last 200 miles of flights to deal with the unmanaged, highly variant flow of arrivals and departures — despite investment in state-of-the-art hardware like ADS-B and satellite communications and processes like RNP approaches and departures.
  • Airlines force air traffic control to warehouse aircraft with overly long (in distance and in time) final approaches caused by the random arrival of more aircraft than that airport is known to be able to handle, exacerbating variance and driving excessive queueing and delays.
  • Airlines park, hide and warehouse aircraft because they lack a robust command and control process, something required to manage their day-of operation in real time, 24-7, 365.

Each of these local processes and policies must at one time have provided a local benefit — that is, made sense from the local decision-maker’s perspective, especially when incentivized locally to reduce costs. But these local benefits pale against the loss of system-level production capability from parking, hiding or warehousing aircraft, which costs billions of dollars annually for individual airlines.

Unfortunately, the broader system’s cost-benefit analysis of these local cost decisions, to account for lost aircraft productivity, production interdependencies and day-of defects, is not something airlines consider or complete.

The parking, hiding and warehousing of aircraft at such a high level, and the huge costs that generates, need not occur. There is an independently demonstrated, profitable, quick and easy internal airline path to achieve shared airline and customer goals: operational excellence, a system-driven solution to achieve 85% A0, less than 3% daily A0 standard deviation, 8-to-10-minute scheduled block/gate time reduction, reduced costs, reduced fuel burn and emissions, and improved quality and revenue.

Below is the top-level, five-step program for airlines to reach operational excellence to dramatically mitigate the problem of congestion, chaos and inefficiency.

  1. Airlines must have the leadership and vision to take ownership of this problem, and air traffic control needs to stop accepting the blame. And it is all the same problem. By adopting operational excellence, airlines can attack the root problem facing both airlines and air traffic control: huge variance, on daily and hour-to-hour bases. Airlines can’t continue to simply throw aircraft at air traffic control in real time and tell air traffic control to work harder, do better and spend more money. Once airlines take ownership of this problem, they need to create 5-, 10-, 15- and 20-year operational visions of how they want to operate their aircraft day of, flight by flight, 24-7, 365. No airline today has done that, with airlines unnecessarily abdicating control of the movement of a plane to air traffic control as soon as the plane leaves the gate.
  2. Airlines need to assign a single leader within the company who has cross-departmental, day-of responsibility and authority to implement a system goal and the necessary processes to smoothly ensure smiling customers with their bags reach their destinations faster, better and more profitably. Incredibiy, there is no one leader at any airline responsible for delivering a high-quality day-of product.
  3. Airlines must track and manage their planes in real time to stabilize their flow, making their movement much more predictable.
  4. Airlines must optimize and assign gates in real time, three to five hours before their planes land, based on the stable, predictable aircraft flow.
  5. Airlines must optimize and assign all other day-of operational tasks (crews, maintenance, galleys, boarding, baggage, etc.) in real time with the stable, predictable aircraft/gate package.

Operational excellence starts with airlines managing their aircraft flows in real time, timing and sequencing arrivals and departures to maximize system-level business goals. Airlines can do this immediately, and passengers, industry regulators and legislators should demand it.

Airlines must change direction and move to help themselves by adopting operational excellence since the “blame game” model simply isn’t working. Blaming air traffic control, weather or airports, or expecting air traffic control to fix an airline’s broken internal production process, represents misplaced aggression. Only airlines have the proprietary information to optimize their flight sequencing and timing to meet their business rules and priorities. Air traffic control is not in a position to affect carriers’ outcomes. Collaborative decision-making does not solve this problem.

It is past time for airlines to take control of their assets, costs and quality, improving what they have always been able to. Doing the same thing over and over again for 40-plus years — blaming air traffic control while expecting different results — is the very definition of insanity.



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