The Covid-19 Pandemic has forced airlines to examine crew costs at a forensic level and cut expenditures dramatically in order to survive.
With thousands of aircraft grounded, flight crew were immediately put on furlough, and that helped airlines to manage crew costs in the short-term. Recovery means getting flight crew back to flying the line in anticipation of continued increases in passenger numbers and progressive revenue growth. A major challenge that airlines now face is to maintain a balance between revenue management and cost control.
While flight crew costs are mostly predictable, they are also highly variable. Crew schedules reprint to change in the normal course of operations and often get disrupted due to irregular operational events. This can make it difficult to control the build-up of costs – especially when crew cost information and performance measures are not easily available as a solid basis for decision making.
Airlines publish flight plans, crew rosters and related budgets but then struggle to track and quantify variances from the plan as the action happens. As a consequence, few airlines have a detailed understanding of what the real drivers of crew cost variances are. Without detailed insights into a crew’s operational events, related decisions and how these drive costs, airline management lack the diagnostic evidence for them to intervene and improve the situation. As a consequence, increased crew costs across every bid period are seen as inevitable and uncontrollable.
To have any chance of managing crew costs effectively, modern airlines need to always have a finger on the pulse. This requires the ability to:
- Establish an accurate baseline for current operating costs and performance
- Identify variances against plan, root causes, waste and cost saving opportunities
- Take action to exploit cost saving opportunities through collaboration across operational departments
- Track the improvements from period to period – gather the evidence
The natural instinct of an airline is to keep the operation moving and aircraft flying no matter what. This instinct tends to drive behaviours that disregard cost as a decision factor. A Scheduler can make decisions that cost an airline large sums of money, but the cost implications are not evident at decision time. In fact, the cost implications are often lost entirely because the CFO of the airline can only see an unwelcome cost variance and not the specific actions that created it. The result is that the same operational decisions are taken again and again without fully understanding if these are the best decisions for all stakeholders including Schedulers, Flight Crew, Passengers and Airline Management.
Airline Management needs access to decision-grade information every day to manage the efficient performance of the airline.
Rainmaker Crew Pay Manager and Crew Analytics provides the dynamic information needed to manage crew costs and drive operational improvements. Call us today for a demonstration of the solutions that can transform how you manage your airline operations.