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Why Schedule Simplicity Is Important

By
Miyuru Sandaruwan
 on September 20, 2011 12:19 PM | | Comments (0) | TrackBacks (0)
 While the world is moving towards a trend of simplicity - we still see some airlines who prefer to have complex fight schedules. Apart from being easy for the customers and to attract more of frequent passengers on the route, there is a host of benefits that can come by keeping your schedule simple. Have a look at these very simple, yet highly renowned things for example.
  • Light bulb
  • Pencil
  • Frisbee
  • Paper
  • Brick
  • Paper clip
  • iPhone

 Simplicity is not just an advantage, but it is a feature. Obviously, you will often come up with situations where it is necessary to have two different flights that cater for two different hub patterns- this is alright. But if you come up with a situation where you are flying three weekly flights at three different schedules, re-consider it. If you're doing so because you believe that "we do not have enough aircraft" or "this market has no business traffic" - you are nopt achieving the route's full potential.

The Networker Lessons #5: CASM

By
Miyuru Sandaruwan
 on August 5, 2011 5:36 PM | | Comments (0) | TrackBacks (0)

Welcome to the fifth chapter of The Networker lessons. CASM. I'm sure that you have heard this phrase once or twice. What does CASM stand for ? CASM stands for Cost per Available Seat Mile. It is an important measure about an airline's efficiency. What does it do? Let's learn.
CASM is the cost to fly one seat for one mile on an airline. It is calculated by diving a flight's direct operating cost by Available Seat Miles - the latter which is the equivalent of multiplying the number of seats that an airline offers with all of the nautical miles that the airline flies in the same time period.
For example, if an airline flies a 100 seater aircraft on a 150 nautical miles route, the available seat miles (ASM) for this route would be 15,000. If it cost the airline USD3000 to operate the route, the CASM would then be 20 cents.
CASM is often considered as a very accurate tool to compare the performance of two or more airlines - although it should be noted that the CASM may also vary between the nature of flights that an airline operates. An airline which operates a high number of short haul flights might have a slightly higher CASM owing to the higher number on landing and airport charges it may occur. However one could also argue that this is only fair given that it directly compares all the unit costs of the airlines. While a lower CASM may not guarantee that an airline is profitable, it still remains as one of the most important metrics in the airline industry.

The Networker Lessons #4 : Overbooking

By
Miyuru Sandaruwan
 on June 15, 2011 6:24 AM | | Comments (0) | TrackBacks (0)
 I am sure that you have heard the word overbooking at least once. What is overbooking? Why do airlines overbook?

 Overbooking is the process of an airline booking more passengers than the available capacity on a flight. For example, in an Airbus A320 aircraft with seating capacity for 180 passengers, an airline may opt to book 185 passengers on board.

 This need for overbooking arises from the need to minimise spoilage. (Spoilage is the term used for pre-departure cancellation of booked tickets and no-shows) Spoilage means that a flight will leave with empty seats that could have otherwise been sold to earn revenue. And in an industry as marginally profitable as ours, it has become critical to minimise this spoilage and earn the highest possible revenue. This created the need for overbooking and it has proven to be a valuable tool for the airlines.

 Overbooking in fact, is a very complex process. An airline must ensure that it is not overbooking too aggressively, which would result in rejected passengers and disappointed customers that will hurt the airline's image. To achieve this, the airline researches a flight's historical load and spoilage data, and sets an optimal overbooking rate for that flight.

 Naturally, if an airline has a high frequency of flights on a certain route, that means it gets the ability to overbook more aggressively. This is because that the rejected passengers could be easily booked in the next available flight without a heavy delay to the passengers' travel plans.

 It was the legacy carriers that began the process of overbooking, however, recently some low cost carriers too have adopted it.
 The strategy of overbooking has saved the airline industry billions of dollars to date, and will continue to play a critical part in any airline's revenue management.

The Networker Lessons #3 : GDS

By
Miyuru Sandaruwan
 on May 26, 2011 4:48 PM | | Comments (0) | TrackBacks (0)
 I am sure that you have heard the word GDS plenty of times when discussing about airlines. What does GDS mean? What can it do? Let's find out.

 GDS is the acronym for Global Distribution System. A GDS enables an airline to sell its tickets via travel agents.
 The GDS evolved from the concept of the CRS ( Computer Reservation System ). As airlines expanded their reach globally, the CRSes had to too. The answer was the GDS.
 
 GDSes are owned by large corporations or groups of airlines and act as the cornerstone of the flight booking process between airlines and the travel agencies. The airline uploads its flight details ( available seats, fare classes etc. ) to the GDS and the travel agency can then use these data to book its customers on those flights.

 GDSes usually consist of four layers:
 1. Inventory display and management
 2. Pricing and fare search engines
 3. Ticketing and document generators
 4. Database reporting engines

 Some of the most popular GDSes are Sabre, Amadeus and Galileo.

 Low cost carriers generally do not use GDSes and instead rely on their own methods to sell tickets, in order to save on the distribution costs. With the advent of the LCCs and their solely web based flight booking, the GDSes have been threatened too. This is lead by the fact that the web based systems save the airlines a lot of money that would have otherwise been spent on travel agency commissions via the GDS. However, the GDS' ability to reach regions with low internet penetration has helped the GDSes retain their leading position.

 The GDS remains a critical part to any airline's operation.

The Networker Lessons #2 : Equipment

By
Miyuru Sandaruwan
 on May 18, 2011 4:10 AM | | Comments (0) | TrackBacks (0)
 Welcome to the second chapter of The Networker lessons. I'm sure that you have often heard the word equipment when talking about an airline route. What is an equipment ? Let's find out.
 The equipment refers to the equipment type - or vehicle - that is used to operate a particular flight. This is not strictly about an aircraft, it could range from a jet aircraft to a helicopter to a road vehicle.
 Equipment codes are used to identify different equipment types used. While there are some standard codes, airlines too are free to use any codes that they wish, to distinguish one aircraft from another. An example for this is Cathay Pacific - Cathay Pacific operates the Airbus A330-300, in multiple seating configurations. Hence, while the standard code for the Airbus A330-300 is 333, Cathay Pacific uses 33B for one of its different seating configurations, in order to distinguish it from the other A330-300s in its fleet.
 Some of the most popular IATA equipment codes are provided below ( IATA codes, with three letters are used in the reservation systems and are the most popular. There are also ICAO codes, which consist of four letters. )

32S - Airbus A320 family aircraft ( A318/A319/A320/A321 )
AB6 - Airbus A300-600
332 - Airbus A330-200
333 - Airbus A330-300
343 - Airbus A340-300
388 - Airbus A380-800
AR1 - Avro RJ100
732 - Boeing 737-200
738 - Boeing 737-800
73H - Boeing 737-800 Winglets
74M - Boeing 747 Combi
748 - Boeing 747-800
76Y - Boeing 767-300 Freighter
77L - Boeing 777-200LR
77W - Boeing 777-300ER
E90 - Embraer 190/195
HS7 - BAE HS748
IL9 - illyushin Il96
M11 - Boeing McDonnel Douglas MD-11
MiH - Mil Mi Helicopter
TU5 - Tupolev Tu-154
EQV - Equipment varies ( on different days )
BUS - Bus

The Networker Lessons #1 : Load Factor

By
Miyuru Sandaruwan
 on April 26, 2011 4:59 AM | | Comments (0) | TrackBacks (0)
 Welcome to a new feature on The Networker - Lessons - teaching you about the essentials of airline route networking.
 Let's start with the Load Factor.





 I'm sure that you have heard of the term load factor at some point. What does load factor mean ?
The load factor is the actual number of seats utilized on a single flight. This could be calculated by dividing the number of revenue passengers carried on a flight by the number of seats that were available on the flight.
 For example, if a flight was flown on an aircraft with 100 seats and only 75 passengers flew on that flight, the flight's load factor is 75%.

 On a more wider scale, the load factor could be referred to as the proportion of airline capacity output that is actually consumed. On this scale, the load factor could be calculated by dividing the Revenue Passenger Miles (1) by the Available Seat Miles (2).
(1) - The actual number of passenger miles sold and flown.
(2) - The available number of seat miles, whether passengers fly them or not.
 The load factor is always expressed as a percentage.

 The load factor is often used to describe an airline's performance, however it is not one of the most accurate. An airline may sell its tickets at deep discounts and fill its seats. However the actual revenue may be low. Another airline on the same route can sell its tickets at a higher price and have a lower load factor, but still earn a higher revenue than the first airline.
 Nevertheless, the load factor remains one of the industry's most noticeable benchmarks and will continue to be so.

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