Gunjan Jangid Gunjan Wagh Nidhi Nagpal Prekshi Choksey Shefali Agarwal Soham Roy AIRLINES INDUSTRY • The aviation industry is one of the fastest transportation sectors. • Commercial airlines carried more than 4.5 billion passengers in 2018. • Expected to generate global revenue of 606 billion U.S. dollars in 2019. • DELAG (Deutsche Luftschiffahrts-Aktiengesellschaft) was the world's first airline found on November 16, 1909. KEY CHARACTERSTICS
• Barriers to entry- oligopoly
• Seats cannot be stored • High operating gearing • Many markets highly seasonal • Long aircraft ordering lead times • Poor financial performance LEADING AIRLINE GROUPS WORLDWIDE IN 2018, BASED ON PASSENGERS(IN MILLIONS) 5 KEY PLAYERS OPERATIONAL PERFORMANCE METRICS
According to International Civil Aviation Organization
(ICAO) operational performance metrics is a performance indicator and can be defined as “a tool for quantitatively measuring current, past and expected future performance as well as the degree to which performance objectives are being met and should be met”. To be simply put a performance metric is a standard for measuring performance. OPERATIONAL PERFORMANCE METRICS USED BY AIRLINES INDUSTRY 1. Load factor : •Passenger load factor, or load factor, measures the capacity utilization of airlines. •Higher load factor values make the airline more profitable by spreading fixed-cost expenses across more passengers.
2.Revenue passenger miles :
•A revenue passenger mile (RPM) is a transportation industry metric that shows the number of miles traveled by paying passengers. •It is a is a measure of demand, airlines have to try to match supply with demand for passengers' benefit. 3.Revenue per employee: •It is a financial ratio that measures the revenue generated by each employee of the company on average. •It is a meaningful analytical tool because it measures how efficiently a particular firm utilizes its employees.
4.Number of arrival and departure delays :
•A delayed flight as one in which the aircraft fails to release its parking brake less than 15 minutes after the scheduled departure time. Similarly arrival time. •On time performance helps the airline to grow in the market.
5.Runway incursion rates :
•A runway incursion is an incident where an unauthorized aircraft, vehicle or person is on a runway. •Less runway incursion rate signifies high efficiency. COMPARISON OF TWO METRICS OF 5 AIRLINES