Swiatek Advisory Services

Aviation is a large and growing industry

Swiatek Advisory Services

Swiatek Advisory Services
 AIRLINE INDUSTRY
 The Airline industry came into existence during the
17th centuries.

Air travel remains a large and growing industry. It

facilitates economic growth, world trade, international
investment and tourism and is therefore central to the
globalization taking place in many other industries

The network is a key strategic factor of airlines,

as it is the main driver for generating revenue and costs
as well as a source of competitive strength or weakness. Gillen
(2005)

4
Swiatek Advisory Services
Dr. Elif Değirmenci
Passenger Number
Total Pax (million)

38.2
32.6
29.2
26.9
22.6
19.7
17
14.2
12 10.3 10.4 10.4 12

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012T

** 2012T is forecast.
OPERATING PROFIT (Million USD)

401 463 457

278 262 261
103 159
62 36
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
OPERATING PROFIT MARGIN 17% 15% 5% 3% 1% 11% 10% 10%

Dr.Swiatek
Elif Değirmenci
Advisory Services
 Swiatek Advisory Services
Dr. Elif Değirmenci
 Long Term Mid &Short Term Last 3 Days
Planning Planning

 Fleet planning Master Schedule  Tail Assignment

 Summer and Winter schedules
 Network structure  IATA schedule conference  Ad-hoc (operational)
 Market Research  Civil Aviation permissions schedule changes
 Repetitive Charter flights
 Number of frequency  Maintenance control
 Maintenance
 Connection structure  Schedule coordination meetings  Crew Assignment
 Budget planning Current Schedule
 Changing aircraft type
 Cooperations  Cancel/Add flights
 Combining flights
 Usage of idle capacity
 Charter flights
 Extra flights
 Haj – Umre flights
 Maintenance program revision
 Feasibility check
 Crew coordination

Network Operation
Planning
Scheduling Coordination
Star Alliance Confidential
 O&D Analysis Where ?

Direct/Connect ?
Network
Structure Banks ?
Frequencies ?

Timing
When ?
Optimization

Fleet Which aircraft type ?

Optimization How many aircraft ?

Dr. Elif
Star Değirmenci
Alliance Confidential
 Hopefully we are all a bit of artist and scientist to perform network tasks

Big Picture

Optimization

Dr.
StarElif Değirmenci
Alliance Confidential Page 9
 EU CIS
NA

ME FE

AF

SA

Dr. Elif
Star Değirmenci
Alliance Confidential
 Luckily a chronologic order to network decision making helps us

Operations

Strategy Schedule Schedule

Planning Optimization

> 1year > 3 months < 1 year > 3 months < 6 months > 3 days
Star Alliance Confidential Page 11
Dr. Elif Değirmenci
 We will focus mostly on those decisions made in network management

Schedule Schedule
Planning Optimization Operations

Strategy

> 1year > 3 months < 1 year > 3 months < 6 months > 3 days
Star Alliance Confidential Page 12
Dr. Elif Değirmenci
 We will focus mostly on those decisions made in network management

+- +- +- Retime Retime
Destinations Schedule Planning
Frequency SeatsDecision
For Local For Cnxs

+- +- Macro Other
Flight #’s Schedule
Code Share Optimization
Banks Decisions
Refleet i.e. Config

Star Alliance Confidential Page 13

Dr. Elif Değirmenci
 There are many different decision which must be made every day

+- +- +- Retime Retime
Destinations Frequency Seats For Local For Cnxs

+- +- Macro Other
Flight #’s Code Share Banks Refleet i.e. Config

Star Alliance Confidential Page 14

Dr. Elif Değirmenci
 With so many decisions a good process is needed

Star Alliance Confidential Page 15

Dr. Elif Değirmenci
 Building blocks help to break down and build up the process

1 Assess 2 Assess
Current Current
Demand Supply

3 Build
Your
Schedule

4 Calculate 5 Calculate 6
Allocate
Future Market
Cost
Demand Shares

7
Calculate
Profit/Loss

Star Alliance Confidential Page 16

 Process is just one component to a best practice network management team
Process

Data Assumptions
X
Y
Z

Tools

Star Alliance Confidential Page 17

Dr. Elif Değirmenci
 1 2 5
Assess Assess Calculate Interactive
Current Current Market Session
Demand Supply Shares Three

Carrier Interactive Carrier

Knowledge Session Knowledge
Exchange One Exchange

3 4 6 7
Build Calculate
Allocate Calculate
Your Future
Cost Profit/Loss
Schedule Demand

Carrier Interactive Carrier Interactive

Knowledge Session Knowledge Session
Exchange Two Exchange One
Star Alliance Confidential Page 18
Dr. Elif Değirmenci
 The objective is to make better network management decisions

A…
……
….Z

smarter collectively faster

exhaustive

Star Alliance Confidential Page 19

Dr. Elif Değirmenci
 And communicate those decisions for better buy in and implementation

Star Alliance Confidential Page 20

Dr. Elif Değirmenci
 And of course – to make more money

Star Alliance Confidential Page 21

Dr. Elif Değirmenci
OMAN AIR

Star Alliance Confidential Page 22

SINGAPORE LONG HAUL

Star Alliance Confidential Page 23

EMIRATES

Star Alliance Confidential Page 24

AIR CANADA

Star Alliance Confidential Page 25

 some terminology

Cabin Class
• First(F)

• Business(C)

• Economy(Y)

TOTAL
RPK (Traffic): Revenued Passanger Km FLOWN
KM

PAX

TOTAL
FLOWN
ASK (Capacity): Available Seat KM 26
Km
# of SEATS
Star Alliance Confidential
Dr. Elif Değirmenci
 some terminology

Cycle NUMBER OF LANDING

Revenue per Available Seat KM ( RASK ) TOTAL REVENUE/ ASK

Cost per Available Seat KM ( CASK ) TOTAL COST/ ASK
27

Star Alliance Confidential

Dr. Elif Değirmenci
 market and connection types

Non-Stop MarketTK1793
ONE FLIGHT NUMBER,

ONE FLIGHT LEG,

IST ARN

TK80
Direct/Through Market ONE FLIGHT NUMBER,

AT LEAST 2 FLIGHT LEG

IST JNB CPT

TK 1980 TK 1056 MORE THAN ONE FLIGHT NUMBER,

Connect Market
AT LEAST ONE STOP

AT LEAST 2 FLIGHT LEGS

LHR IST KHI 28

Star Alliance Confidential

Dr. Elif Değirmenci
 market and connection types

MCT (Minumum Connection Time)

Time needed to connect two flights

Code Share aviation business arrangement where two or

more airlines share the same flight.

Online Flight
Non codeshare flights

Interline uçuş
TK 001 TK 8661
Flights on commercial agreements like
codeshare

IST JFK LAX

Operated by Bağlantı Operated by
29
Tukish Airlines American Airlines

Star Alliance Confidential

Dr. Elif Değirmenci
 Flight Terminology

LHR - IST IST - TLV

Taxi Taxi

Flight Time

Connection
Block Time Time Block Time

Elapse Time

•MARKET : LHR-TLV •SEGMENT : LHR-IST,IST-TLV

• ITINERARY: LHR-IST-TLV • SERVICE : CONNECT

30

Star Alliance Confidential

Dr. Elif Değirmenci
Basıc Terms Of Avıatıon
Connect / Nonstop Markets
Connected Flights
LHR - IST IST - TLV

Connection @
Istanbul Ataturk
Airport

Nonstop Flights
LHR - TLV

31

Dr.Star
ElifAlliance
Değirmenci
Confidential
 Basıc Terms Of Avıatıon
O&d- Beyond- Feeder/Defeeder
O&D (Origin-Destination) TK1793

The start and end points of travel

IST O&D (MARKET): IST - ARN ARN

ALA
BEYOND
ALA ve DXB are beyond points
LHR IST for London-Istanbul segment.

DXB
FEEDER DE-FEEDER
For the segment Istanbul –Londra, For the segment London-Istanbul, ALA ve
ALA ve DXB are called DXB are called defeeders of London.
feeders of London
Star Alliance Confidential
Dr. Elif Değirmenci
 BASIC TERMS OF AVIATION
DETOUR FACTOR

Detour a + b
a =
Londra Factor c
Istanbul

Detour 2510 km + 1134 km

b = = 1,02
c Factor 3585 km
Tel Aviv  Meaningful connect

Londra

a
Detour 2510 km + 2258 km
c = = 2,86
Factor 1666 km
İstanbul
Cezayir b 33
X Null connect

Star Alliance Confidential

Dr. Elif Değirmenci