Last-minute decisions key to airline success

Just recently I caught up with Dirk Albrecht, who is the partner in charge of Roland Berger's aviation practice.

I spoke with Dirk to get some input into our recent feature about whether the hub and spoke model is broken. He gave me some fantastic insights about airline decision making, but not all of them made it into the final article, so I thought I would share them here.

The conversation was based on Roland Berger's report called "Future scenarios for the European airline industry". Here are some of the findings which Dirk shared with me:

"The sad truth is nobody knows what the future is made of," said Dirk. "Assumptions based on the past are more often than not proven wrong."

 

Roland Berger is therefore advising airlines to push decisions out until the last minute - planning for more than one future so they can deploy a detailed reserve strategy when things become clearer.

In Dirk's words: "You need to explore scenarios and develop possibilities. I argue to airlines that, as difficult as it is to prepare for one future, they need to prepare for more than one and be ready to 'switch on' one or more of these solutions as things evolve.

 

"They can't break the bank and ruin the company for it, but when they come to the point where they realise their assumptions are not correct, they have to be ready to switch assumptions. 

 

"This means having a concrete, down to earth strategy on a number of possibilities, rather than just one which is ready to deploy when necessary. I am not talking hundreds of options, just a few."

 

This advice is far easier said than done, but I thought it was an interesting insight into how airlines can tackle today's ever-changing business environment.