Consulting, Outsourcing, Cloud? COTS or tailormade?

LOTR One Ring to rule them all

A friend last week seriously compared the Corona vaccine research with the need to use their cloud-based solution (Source). But is “The Cloud” a panacea? And what does that question have in common with consulting? Or with outsourcing? COTS or tailormade, DIY or expert job? Consulting, outsourcing or cloud?

The Value of Experience
click images to enlarge

The Consulting Rule

My mantra for many years has been that consulting is a short-term (high paid) business. Either you have a short-term, a peak demand in a certain know-how, then you hire a consultant. Else, you better have or develop your own expertise. To which a consultant may contribute. Most (not all) consultants being in a company for more than a year without helping the company to develop the necessary know-how are leeche(r)s.

Outsourcing

Always listen to the experts! They tell you it is impossible and why you can not do it. When you know that: Go Ahead!For outsourcing, it is very similar. If you have little need for a certain specialization, you outsource to experts and consultants. That can be i.e. tax management in small companies, HR, IT, etc. In this case, it is less about consulting, but about consolidation.

One common example would be the ground handling at your base (should be in-house) or at an outstation (outsourced). Though even at your base, if uncommon in your geo, you might outsource i.e. deicing to the airport, not serving just you, but all airlines operating at that airport using a central deicing pad.

Anything vital to your business, you better have the expertise in-house.

Cloud Computing

Dilbert - Lost CloudCloud computing is another area of (IT) outsourcing. It follows the same rules. So if you are a very small airline, you will likely take Commercial of the Shelf (COTS) IT-solutions. You use some passenger service solution (PSS), an OPS system, the airports’ check-in management system, etc.

But this comes with a benefit and a burden. The benefit being “commonality”, you can likely find experts that learned those tools in their previous company. You don’t need to bother about installation, server-management, etc., you entrust this to the partner. But that can also backfire, if that partner does not have sufficient infrastructure. Most major airline-wide groundings in the past years were not weather, but IT based. A single “outsourced” system not functioning as it should, such taking down the airline’s IT.

Further, you entrust your vital data to “someone else”. And I have seen that against all agreements, how that data was and is being used to do “own analysis”. You give someone else insight in mission critical information. Yes, if you are small, this might be your only choice. If you’re big, why would you do that?

Information Silos

Data SilosThe main reason, I see consulting, outsourcing and cloud computing critical is the development of information silos. Not you own the important information, but “someone else”, someone outside your company. It can be a consultant, it can be a service company or an IT-system.

The second reason is that this information in all my experience is not seamless available to others, be it your own people or other IT-systems used. Especially on IT-systems, even the large players in all my experienced failed on system-independent interfaces to all data. In case of problems, most systems do not allow you an export of the raw data for your own use, much less an interactive data exchange with custom software of your own.

Researching for KOLIBRI.aero about IT infrastructure for an airline, I did not find any given integrated combination of PSS, ops system, CRM, accounting with a common, instant BI (business intelligence) analysis. Speaking to several airlines, their IT managers expressed their own frustration on that situation. Airlines having developed their own solutions, investing big secondary money into interfacing their different added “licensed systems”.

The Cloud Computing Cage Model

SaaS AssimilatedMy first experience with cloud computing was Sabre, Amadeus, but SAP was my personal experience with the SAAS model and it’s most negative repercussion. Good for the software provider, bad for the user. You bind yourself to the ecosphere of the software provider. For good or for bad. To change later is being made so difficult and expensive, it’s virtually impossible. Where the data might still be available, the computing “rules” are mostly not, you have to reengineer from scratch – there is a big consulting industry out there, specializing on such jobs, usually not talking about thousands in cost but millions.

This ain’t a marriage, it’s an “adhesion contract”. Be very aware who you bind yourself to.

One Size Fits All – Does It?

With a hat size of 63 cm, I can tell you that one size does not fit all. A simple truth. If you buy COTS (commercial-off-the-shelf), you get something developed for others. It might do the job, but it’s like Micro$oft Office, a panacea. Remember how long it took until they supported PDF export? Bill Gates took the bet on “America Online” and “Microsoft Network”, rejected the Internet until it was almost too late – they’ve spend a fortune to catch up. And many users could live with Wordpad, never use the abilities of Word. Or use other text editors, Google Docs, Libre Office, … Just an example.

COTS? Or Tailor Made?

Do you need a COTS suit? Or a tailored one? Can you afford the tailored one? Or will COTS be more reasonable?
Can you afford to try yourself or do you need an expert? Temporarily or strategically long-term? There is no black or white.
The choice is yours.

Food for Thought
Comments welcome!

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The True Meaning of Corporate Social Responsibility

For quite a while, I am stumbling over the issue of the common investor understanding of Corporate Social Responsibility (CSR) and their implication that it is the same as Sustainability. Which it is not.

Wikipedia a.k.a. an Academic Idea

Wikipedia on CSRReading the Wikipedia page about it, they see it as a high-level code of conduct for large, international organisations. And focused on the representation of the company towards its customers. I think we must step back and make a change. A change to how we must understand corporate social responsibility. And not just, but especially in times of Corona, this is not a nice to have, it is a desperately needed definition update!

Shareholder Value vs. CSR

The Rise and Fall of Dennis MuilenburgIf you focus on shareholder value, human resources and only your own, personal profit, you end up in a deep, dark pit. Sometimes, like Boeing’s Muilenburg and others who have been on the Olymp, just for that much deeper a fall. Examples aplenty.

In most cases, it’s like the recent decline in employee morale at Lufthansa, Carsten Spohr shelving Germanwings in a “strategic” and likely necessary move, but without the touch to understand the emotional repercussions on overall staff. Them having very well in mind the fate of Contact Air, Cirrus Airlines, but also Air Berlin with their last CEO a Spohr-lackey sent to liquidate the airline. And sure, there is quite some green- and whitewashing involved by such CEOs, having their own “sustainability” and “CSR” departments.

Basic Principle

So what is “CSR” truly about? Or should be? Like with all such “definitions”, there has been a basic idea. Then it was abused to abstraction to #whitewash investments and make them attractive to investors.

To understand the original idea behind corporate social responsibility you simply need to read it. It is everything about the social responsibilities in corporate (organisational) environments. Is it social to support sustainability? Definitely. But not only. Those definitions applied to CSR crippled the original definition. Then the #whitewashing continued. As Wikipedia refers to, there’s a cost-benefit analysis. Don’t get me wrong, it makes sense. But then let’s name it – it’s a business model, has nothing to do with philanthropy.

Micro Level Social Responsibility

Branson on EmployeesCorporate Social Responsibility starts with your immediate environment: Your own organisation!

When I started my aviation career with American Airlines under Bob Crandall, we were a family. My friends at Delta and Pan Am envied us for that family spirit, called us “brain washed”. To date, we were not brain washed, but professionally motivated. Something I miss since the button counters took over. Something Carolyn McCall at easyJet understood and (as I predicted) what left easyJet with her. The top management understanding that humans are no resource and that motivated staff and service are invaluable assets!

Air Asia CEO Tony Fernandes on staff importance CSRAside the example i used on the different approaches between Alex Cruz at British Airways and Branson’s Virgin Atlantic, there was a noteworthy post by Tony Fernandes of Air Asia. Please read it, this is only a key message out of it:

“What always drove us was our people, our AllStars . It’s what’s drives us every time we are in a Crisis. We must do whatever to protect their jobs.”

CSR the KOLIBRI.aero Style

United Nations Sustainable Development GoalsCo-Founder Ndrec coming from a military background, me grown up with American military and starting my career with American, it was clear from the very start, that developing such a better airline, aside profitability ☑ (check), USPs ☑ (check) and sustainability ☑ (check), we must take care of “ours”. What we considered and consider true “CSR”. From the outset, we such looked at staff management and banned to wording of “Human Resources” and its shortened version “HR”. And we looked at the locations we plan bases for, beyond the company, but the impact such development has to the communities “we serve”.

Aviation holistic viewIt might be surprising to the bean counters (accountant-mindset “managers”) that all of our related “cost centers” turned out to be no just driving loyalty, but to be true profit centers and vital in our attempt to melt the cost factors to competitive levels. As a start-up, investing into all the company’s assets, you must be competitive against all those large, established companies like easyJet owning around 70% of their fleet, cost down to maintenance, with roughly 25% being paid off and around 5% being leased to cover ad hoc opportunities (like taking over Air Berlin routes). And while now being a “burden” in Corona times, airlines cannot drop out of leasing either, so the cost still is there. But those airlines can secure credits based on their (aircraft) assets. To develop profit centers that allow to cut down the cost to competitive levels such ain’t a mere strategy, but a vital need.

Summary

 

The Man in the Mirror (Michael Jackson)

As in all my posts addressing moral and ethics, I turn back to my father, who told me that you got to be first and foremost someone you see in the mirror and you like the guy. Secondly, despite all mistakes you do, you must keep your sheet clean. Your sins will backfire on you.

So you got to start with the good old (wo)man in the mirror. Then think about “yours truly”, family, employees. Then look after the extended community, local and work. If you look at all that, sustainability will be a “natural development” for you.

Food for Thought
Comments welcome!

 

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Automated Flying and Fallback – an Aviation IT issue

Airbus 2020 vision based automatic take-off

Airbus 2020 vision based automatic take-off

B737max, Air France 447, Asiana 214 – and computer failures reason for the largest flight cancellations in the past two years. Lesson (to be) learned…?

Following a discussion triggered by Airbus’ automated take-off last week, I posted a comment on LinkedIn:

“Just discussed the issue of “autonomous flying”, two examples against it. Asiana flight 214 (there was also a similar incident with Turkish Airlines) caused by a pilot with a semi-religious belief in the Auto-Pilot. Said to have very little experience “flying manual”. And the 737MAX, also to keep in mind the missing redundancy of sensors to safe cost. Also Air France 447 accounted to incorrect sensor readings. One reason I don’t see a “pilot free cockpit”, but a “cockpit flight manager”. Like the flight attendants there in case of need, but usually just monitoring proper systems. “Accompanied” by a drone-operator at the AOC. Having GBAS+GPS a system to constantly monitor the four-dimensional position of the aircraft and if in line with flight plan. If not, maybe a sensor-glitch misguiding the aircraft? Please “Pilot” or “drone operator” override the faulty sensor…”

Several replies, notably the one public response by David Eiser outline the threat: “Too much reliance on automation by both operators and pilots is one of the biggest threats today.”

A frequent issue I discuss when discussing AOC or APOC (airline or airport operations centers) is the necessity to have fallback procedures in case of IT failure! This is also in line with disruption management and the fact that the major disruptions of the past two years were caused not by weather, but IT failures! Just an example reported by Wall Street Journal.

Lesson Learned?

Back in 1990, I came as a Sales person to the Frankfurt Airport to meet and greet an important FAM-group – FAMiliarization – a group of journalists invited for a trip overseas. To learn the flight would not take off, as the airport check-in-system failed. I got a printed passenger list, a stack of boarding passes and after 10 minutes of preparations issued the boarding passes to the passenger. With only 75 minutes into the process the flight got readied for departure. It was as far as I remember, the only flight that left that day during the computer downtime. Lufthansa used a different system, their flights were not impacted.

That was my day to learn the lesson to have fallback procedures in case of a computer glitch. It was driven home over the years by other failures that became public. But more and more, I also learned that managers developed a semi-religious faith in computer systems. Redundant systems cover for a failure, right? Wrong. Working with AOCs and APOCs – there are no system redundancies. If a system fails, there is a downtime. Period.

Computer Literacy

As Richard Maslen just wrote on CAPA’s Blue Swan Daily: “It used to all be about passes in English and Mathematics, now it is blockchain, cloud computing and analytical reasoning – the changing mix of skills most prized by the business world”. It is another example of the semi-religious faith in IT I talk about. Big Data was the buzzword everyone talked about and nobody had a clue on what it really meant. It’s hip, so it must be good. Now we added blockchain, cloud computing and analytical reasoning. Important buzzwords, but if you look for a business case, it’s for the ones making themselves a business with it.

Sabre HistoryCloud Computing

Did you know that aviation was the first large application of cloud computing? Sabre enabled to book flights from anywhere in the world anywhere in the world. I used Sabre-messages back in 1987 – that was years before e-Mail. Tell me about Cloud Computing. On the backside, most recent computer failures forcing airline downtimes were caused by small cloud solutions failing and taking down the airlines’ IT system as a collateral damage. Leaving airplanes grounded, passengers stranded.

Blockchain

Where aviation has a strong requirement to keep a “history” of changes in their IT systems, blockchain might help, but it adds complexity and slows down systems. And keeps the question of the ultimate truth. If there is a data discrepancy between two independent systems, which ones is the right one? That’s not just on A-CDM between different stakeholders, I’ve seen the same problem arise on internal systems aplenty!

Analytical Reasoning

Now on analytical reasoning, it goes with the old issue of who analyses with what intent. As the old saying goes, I only trust the statistics I falsified myself.

Get the FactsAircraft System Redundancy

Now have we learned our lessons? Speaking to academically educated managers, I find a lot of superficial knowledge. Like the Big Data picture. Someone – usually the IT companies – come up with those buzz words and explain they are important. They are not unimportant. But it boils down to my usual question: Give me a business case. No wishful thinking. Nor divine revelation and forget what the stars foretell!

Boeing managers, in what I consider a criminal neglect, prioritized commerce over safety. In line with FAA and others. “Shareholder Value” is a word that was invented in the U.S. It implies that the only value a shareholder has is short-term profit. I disagree ever since I learned the word back in 1997 in the process of the IPO of Cytric. At the time my baby – yes, the one today owned by Amadeus. Shareholders have different values. Long term profitability. Sustainability, not even linked to profitability. An idea. Something “good”.

Now Boeing used a single sensor to trigger MCAS. And the system overruled the pilots. It crashed two airplanes. The cause? Greed. A mortal sin.

Oh Gawd... Helpdesk: Final Level. PrayFaith in The Computer

A key-finding on Asiana 214 was a pilot who believed in his on-board computers. Who had thousands of “auto-pilot” hours, but very little experience in manual flying. Who did not grasp that for a wrong sensor his system was wrong. Who made small mistakes on his computers’ settings (i.e. direct input, no landing flaps) ignored the tower’s advise to do a turn-around, to disrupt the landing and start the landing process anew. A similar case grounded a Turkish Airline plane. Pilots like this make a case for autonomous flying. Better a stupid computer than a pilot with blinders.

Another sensor failure caused the crash of Air France 447. GPS giving a three-dimensional point in space, where are the systems that provide that information to the pilots at night? How can it be that pilots and airplanes loose their direction in the air?

And while we talk about GPS and GBAS in aviation, a flight like MH 370 teaches the same lesson. Not the one shot down over Ukraine, but the one that got lost over the Indian Ocean. Airline and authorities are blind over the big oceans. All those fancy systems, satellites, etc. and we have no information, neither in the cockpit nor at the control centers, where the flights are? And trust in pilots following navigational directions (semi-)blind?

Faith in the Pilot

A frequent argument for the cockpit automation is German Wings flight 9525, where the pilot flew the airplane into the mountain. While that was a freak incident, neither pilot nor computers are “fail-safe”. All we can do is to minimize the risk. And while autonomous flying will come, I’m an advocate for a “flight operator”, both in the cockpit, as well as on the ground. Then we have three independent “systems” and any two will override the third. Still, there will be ad hoc decisions to be taken, then who “rules”? If you have another aircraft on collision course. If you have foreign object or another aircraft on the runway.

Fraport VelocopterFly by Wire, Drones and Air Taxis

Since the development of Fly-by-Wire, airplanes cannot fly without computer aid. If the computer fails, the steering signals from the side stick go nowhere. So we already rely on the computers in airplanes. And a computer failure will result in a crash. Period. But Fly-by-Wire also makes the case for automated flying.

Pilot-less air taxis already require a fully automated system. If you consider them to fly in airport vicinity, they interact with the flight plans of commercial airplanes, today considered a major security risk with an excessive bureaucracy for a single approval for any plane, helicopter or drone entering the airport’s air space!

Doctor Who GridlockA similar case is the automated drones as envisioned by Amazon, DHL and others, for automatic passenger delivery. As the air taxis, they will rely on a fully-automated flight planning and flight plan filing with the authorities’ computers. Simply to avoid in-air-collisions.

While commerical airplanes, delivery drones and air taxis follow pre-assigned flight plans and routes, drones are operator-guided… Can we expect manually guided drones in the air space of other operators? Be it air taxis, helicopters or airplanes? I doubt it, I believe this is a short-lived fashion. Soon drones will be so restricted in use that they go back to hobby and in pre-assigned areas. All other operations requiring the filing of a flight plan!

I like the examples in The Fifth Element. Or Doctor Who’s episode Gridlock (image). We’re not talking about individual travel or we risk air accidents, way more potent than any car accident you might imagine today! This can only work in a fully automated environment. You want to change your flight plan? The computers must secure a safe route in four-dimensional space – including the time, beyond what ATC can do today! A constant prediction of traffic for several hours ahead!

My Prediction

I take it with Heinlein, as he wrote in Friday, a 1982 novel. I believe we will have ability for a fully automated flight, which will also improve A-CDM and flight planning. We will have a pilot on board. Plus a drone-pilot in the AOC. Heinlein wrote that the pilot no longer pilots but is there for the sake of passengers’ reassurance. The pilot unlikely to have better ideas than the computer.

The pilots will be turned into a flight operator in the cockpit, plus a flight operator on the ground. Both will be specialists, but I predict that their “work times” will no longer be privileged, but more like computer specialist. Automated flight management will reduce the work load and make those jobs mostly observational. Making privileges in duty times or salaries obsolete. Heresy. To the pilot industry. But in my opinion a “logical consequence” since the introduction of fly-by-wire – which also was the start of the discussion about autonomous flying.

Side note: This will also automate Air Traffic Control, ground handling, etc., etc. – Give take 100 years, likely less, we will have air traffic automated. With very limited manual input by pilots or other stakeholders. Backbone is slot management, scheduled flight planning. Then add “scheduled air-taxi” (air-bus), followed by delivery drones (for people or freight), ad-hoc flights. Think about medical emergency but also “VIP” flights (Air Force One)…

Food for Thought!
Comments welcome

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The Dying of Social Media

“For those who agree or disagree, it is the exchange of ideas that broadens all of our knowledge” [Richard Eastman]

“For those who agree or disagree, it is the exchange of ideas that broadens all of our knowledge” [Richard Eastman]

Look to Book

Leecher… or the question of leeching.

Social networks become more and more inactive, “leechers” that consume but not share their own opinion even with a “like”. In “online booking”, we called that a “look to book ratio”. In Germany, we call it the “caller in the forest” (echos, but no replies). In modern times it’s called the “social media bubble”. Which statistics say consist of 100:1 or worse “data corpses”.

But this is about success eating its children. The larger your network, the more information jumps up on the timeline. With little to no “filtering”, much of those “news” showing on the timeline becomes “irrelevant”. The more often you post, the more the social networks show your news on your followers timeline. Whereas I would like to be attracted every time someone posts who does not post that often. But then we come to Post Expiration and Information Flooding:

Post Expiration

How long are posts visible in social networks
Source: Sprocketwebsites (click on image)

In my last years qualification on “online marketing”, there were some interesting statistics about post visibility, that I found quite interesting.

What is not covered here are the increasingly used online chat tools like WhatsApp, Skype, etc. – posts there are lasting minutes.

You may remember my articles sharing my experience with LinkedIn articles and also media campaigns. As a result, already four years ago, I discontinued writing “articles” on LinkedIn, but with ongoing visits to my blog archive articles, LinkedIn articles (different from the normal posts) have a life span of about three days – older articles are not having relevant visitor numbers ever after.

Now companies, SEO-experts etc. tell you to post constantly to show constantly on those “channels”. But that turns, no it backfires into

Information Flooding (1)

LinkedIn CampaignFor which there are two reasons. And both reasons are in reality counterproductive.

In the beginning, Facebook promoted to post “everything”. Other companies built on that and developed i.e. restaurant reviews and posting of food, selfies from the weirdest places on Earth, etc. – now people post all relevant and irrelevant stuff and clog the timelines. Where it was nice in the beginning to get input from friends, now the flood of irrelevant information makes the tools largely unusable. A business friend recently asked me why I did not respond to his latest posts. Well, I was busy with real life and did not even see those posts, they were long gone when I logged in again. Don’t get me wrong, I did the same mistake. Posted irrelevant things, missing out on relevant news.

Now I will intentionally limit my Facebook to less but higher quality posts. So this week I deleted my all the old content (since 2008) of my Facebook profile. I decided to keep my profile but only for an occasional look, the most important “updates” and use of the messenger to reach out to my friends. But it took me three days to remove all that data, even using Chrome Apps that allow bulk cleaning – with some bugs to slow you down anyway. Now I can “restart” with focus on quality, not quantity.

Back in 2016, I removed my “articles” from LinkedIn, after I found them to be seen just a few days with little interaction, whereas this blog, with the same little interaction except from the same people, has several thousand readers meanwhile and a constant flow of readers on the “old” articles as well. Except for a few readers they do not interact, not even with the easy “like” button I’ve added to all posts some years ago. It keeps motivating to hear on conferences that people obviously follow my blog, referring to my articles.

Information Flooding (2)

App Flood

I also last year discontinued to actively use Skype and drop WeChat. Same reason. In business and with friends I now mostly use Viber, WhatsApp (another Facebook-company). Many years ago, I decided to stick my newsletters to ten. As I can’t keep following the flood of information, it distracts from doing business and make money to sustain my family.

A friend on a conference talked about the “first screen” on the mobile phones. While they become bigger, you also need to decide, which apps make it to your first screen. My new smart phone has space for 30 app icons. I may be unusual by having my apps grouped and using folders, even on first screen, but yes, I have my few important ones.

Social Networking – Lessons Learned

In the expensive Social Media lectures I attended last spring, on which I shared my lessons learned, I mainly learned that if you are a good marketeer, the same rules apply on- and offline. It also confirmed, I can spend all the time someone wants to pay me for, to analyse the online performance with KPIs that are the same useless as the QSI (Quality Service Indicator) as they are set and defined by the analyst with an intentional or (rarely) unintentional outcome in mind: “you are going to get very quickly to ‘factors’ and ‘coefficients’. And that they are variables, subject to interpretation and weighting, they are “relative values” (from The Bias of Route Viability Analysis, Dec. 17).

Lunchmoney Lewis - I've Got Bills [Unhyping Online Marketing]We all know of headlines that celebrities (and companies) bought and buy “followers”. Implying that all those leechers make an impact to your business. While it may take longer to grow your real “Stammkunden” (patrons, regular customers), only the ones that “buy” or stimulate a purchase by recommendation are valuable to your business. In the end it you got to pay your bills!

Marketing is about reputation management, it’s about indirect sales, but in the end, marketing is a part of sales and sales support. Brand is marketing, but in the end it is to stimulate memory and reputation and bring the brand to mind in the purchasing process. Neither marketing, nor brand, nor sales or public relations are an end to themselves. They are to stimulate business and keep the coin rolling.

So where do “Social Networks” fit in here? Same issue. Commercially, it does not help to have leechers. You need either buyers, or ambassadors. That must be first and foremost on your activities. Privately, you neither want leechers, you want people that share information with you, to discuss, agree or disagree, help you to evolve.
So I split my activities to two layers. Connecting with friends. While I appreciate a lot of Facebook “friends”, interaction is limited to very few. I will keep posting occasionally there, but just personal and limited to friends and only the “important” news, not to “flood” my friend’s timelines! I use LinkedIn for business and have some other responses there, confirming the value of the network. Xing is a German social network, but I keep finding them focused on job opportunities. So don’t expect me to do much there.

We are Listening ... and we're not Blind! This is your Life. This is your Time [Snow Patrol - Calling in the Dark] Instagram? Twitter? YouTube? Tik Tok? Yes I could do more there. If you convince me to drop LinkedIn for better impact to my information exchange with friends…?

And if you want my opionion, feel free to reach out to me or to share. I’ll keep watching my Facebook timeline for updates and on occasion also look at Instagram. You can reach me directly using Viber or WhatsApp (if you have my number).

And again, it boils down to my early mentor Richard Eastman‘s favorite quote:

“For those who agree or disagree, it is the exchange of ideas that broadens all of our knowledge”

It is all about interaction, about exchange. Without a “feeback loop”, writing blogs or posting on Social Media becomes boring – in turn, more shares turn to leechers – and the slow dying of Social Media continues. And if you like this post, click onto the little like button… If you did not, let me know what I could do better or where I’m far off in your opinion. Preferably not by e-Mail or direct message, but use the comments function this blog has.

Food for Thought
Comments welcome!

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Why Do Airlines Keep Failing

Cognitive Dissonance Resolution

Recently, I attended the ISHKA conference Investing in Aviation Finance: Germany in Munich where one session addressed Why are airline bankruptcies still happening in a booming environment?

There are some, very few, very common reasons. And auditing airline business plans, start-ups and established, I keep raising the same questions.

What’s Your Business?

Back in the 90’s, I became the honorary member of the Airline Sales Representatives Association in Frankfurt. Aside the narrow-minded thinking of sales managers denying to understand that the emerging Internet was about sales channels, it kept and keeps bugging me, that they focused on their “sales channels”, denying responsibility for the new channels, as they had to be handled “by others”. In the beginning and to date, many if not most airlines have no personal e-Mail-contacts for their customers, be it travelers, travel agencies or online portals. The same applies to their smartphone numbers.

My former boss Louis Arnitz used a historic lesson to explain the change we faced converting FAO Travel, a “classic” business travel agency into i:FAO, the first European business travel portal. In the 19th century, rail companies built the railroads of America. Replacing the Pony Express. Then came those crazy flyers, “aviators”, in their small machines transporting mail. To date rail and air travel are not “connected” (very few exceptions). Because the managers understood the building of steel railroads as their business. Not the transport of people. And they still focus on the wrong priorities. Airline and Rail managers alike.

11 years ago, I wrote about the revival of the sales manager.

Know Your Cost

Speaking about Sales Managers ignorance to the cost of their airline’s operation, I found the fish stinks from the head first being a true proverb. I’ve met too many investors, airline managers, airport managers, not understanding the cost involved. Then they try to compete on the price with the large, established airlines. I have no idea, what those managers learned, I heavily doubt the quality of university education…

The recent failure of Ernest is a “classic”. They take little money, rent Boeing 737 or Airbus A320 family airplanes, in case of Ernest 1 A319 and 3 A320. Then they buy software licenses (COTS, Commercial Off The Shelf). They buy ground handling and maintenance. Something I learned studying Whole Sale & Foreign Economics  35 years ago: If you outsource, it is either more expensive or you they safe from the service levels they provide.

Something I keep telling about consulting. If you need someone with special knowledge for a short time, you “outsource”, you hire a consultant to do the job. If you need something long-term, you hire a consultant to develop the know-how within your company. Again, the job for the consultant is short term.

A ship engine failed, no one could fix it. Then they brought in a man with 40 years on the job. He inspected the engine carefully, top to bottom. After looking things over, the guy reached into his back and pulled out a small hammer. He gently tapped something. Instantly, the engine lurched to life. The engine was fixed! 7 days later the owners got his bill for 10K. ‘What?!’ the owners said. ‘You hardly did anything. Send us an itemized bill.’ The reply simply said: 1. Tapping with a hammer. $2 — 2. Knowing where to tap: $9,998. -Don’t Ever Underestimate Experience.-

In both cases you pay for the experience.

Airline managers that do not understand their real CASK, their Cost per Available Seat Kilometer (or mile as CASM), are not doing their job! Airline managers that fire good people because they are “too expensive”, airline managers that save on “service”, don’t understand reputation and brand as important are being doomed from the outset.

So these airline startups come and believe that with some 10 million Euro, leasing the same (but usually older) aircraft, pay for outsourced maintenance, IT, ground handling, etc., etc. They truly believe they can “succeed” in the shark pond where an easyJet owns 70-80% of their fleet. Only some 20-25% being still paid off (until they own them), less than 3% being leased to cover for ad hoc demand. Where they run their own maintenance operation, their own ground handlers where they can. Then they have established processes and understanding of the cost of disruptions and delays – and cover them with an own fleet of spare aircraft. Do those small airline operators have any spare aircraft on hand when their aircraft fails them?

From Cobalt, Germany, Primera (alphabetical order), feedback said “disruption cost”, attributed i.e. to EU261 “passenger rights” to having been a major reason for their financial troubles. Still, most business plans, I was asked to have a look at last year failed to address that issue at all. Or they used “easyJet figures”, neglecting the fact that easyJet has a spare fleet to cover and minimize the effects of flight disruptions.

Even large airlines’ network managers keep ignoring those cost factors and then get surprised when a route fails. Others go to considerable lengths to understand the typical delays they incur on specific routes. Caused by the ground handler, the departure and/or arrival airport, taxi times, the air traffic control – or simply common weather issues like fog in Stuttgart.

So taking all those common and neglected factors into account: What’s your cost? CASK is one value for the entire company – do you understand the performance on the specific route or airport? Why is it often the same airports “failing”? Maybe they shouldn’t be overly optimistic but be more realistic? And yes, that is the same airports believing if they reduce the landing fee, it would have some decision making impact on the airlines’ cost. It’s that level of non-understanding that causes constant and ongoing failures – not just for newcomers or small airlines.

What’s Your USP

Shortly prior their demise, a board member of Cobalt answered my question about their USP: “We’re Cypriot.”
Say what? Competing against easyJet and other low cost and classic network carriers, that is all there is for a USP?

His second answer about USP was “We’re cheaper.”
Okay. You operate 2 A319 and 4 A320. easyJet operates what, more than 330 A320 family aircraft. You think you’re “cheaper”? Really?

Another airline answered my same standard question with: We fly different routes.
Well… Hard to not be nasty. They just wonder that on their most successful routes, the other, bigger carriers kick their butts and take over those routes.

Carolin McCall understood “service” to be a difference maker. Since her leave, very quickly they dropped from my “role model” and preferred airline to “me too”. Taking over aircraft from Air Berlin with additional and “bulkier” seats, I suddenly experienced less leg space. Their airport manager at one of their hubs found himself quickly “obsolete”, the new paradigm being “cost savings”. In turn they seized my (half-sized) cabin bag due to “full overheads”. Aside the seat next to me being empty, there was more than enough space below the seat. Heard meanwhile from many frequent flyers they no longer wait if they have an aisle seat but make sure they have their seat and the cabin baggage with them. Would be indeed interesting to have some statistics how that impacts boarding time.

So what’s your USP? Price? Okay Mr. O’Leary… But what’s an LCC? Ryanair flies into the big airports recently. That’s another story I plan to address in the new year. So again, what’s your USP? How can you secure that people buy your product, that it’s not simply exchangeable with some cheaper airline? Back 35+ years, my boss in whole sale told me: “There’s always someone cheaper.” And several years later, the boss of “low cost airline” Continental Gordon Bethune said:

A good airline is defined by CUSTOMER SATISFACTION not just cost per available seat mile - Gorden Bethune 1996

Interesting enough, in my recent qualification in Online Marketing, P.R., I learned the same values being valid in the online world. Nothing new. What’s your USP? Know your Strengths, Weaknesses, Oportunities and Threats – internally and externally and build your business case. Then you come to your own USPs. And you will likely not invest into some airlines with a few aircraft. Or into aircraft owners with a few A320 or B737 aircraft they try to place in a sated market. If you’re an investor (or know such), send them over to Kolibri.aero

The Virtual Airline

airline money burnAs mentioned above and before and again. I usually don’t believe in the survival of virtual airlines. A few leased aircraft of the same kind than their competitors, outsourced IT, ground handling, maintenance and other “services”, often even the call and service center (to “GSAs”). Then they believe to be competitive to the large players. If you operate in an un- or under-served market, you may be able to ask for the higher ticket prices required by your increased cost levels. Most airlines I see trying to take off or change their business to survive try to compete to the large network and low cost carriers, but without a secure market (using the same aircraft).

Aviation – and the dying continues … Look at the fleet, at complexity at size and type. Do they have spare(s) in case of disruptions? How much do they fly (make money)? Look at the pricing model and if that reflects the higher CASK. I’ve not seen a single failure in the past years that was not clearly a result of those common causes.

Food for Thought
Comments Welcome!

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SEO, SEM – Who Do You Write For?

College Qualification 2019

Online Classroom Qualification 2019, 3x 100% grade 1.0 online P.R., online marketing, search engine optimization and analysis, online advertising

As many of you know, from March to June, I attended a full-time qualification in Online-P.R. (public relations), online-marketing, search-engine optimization (SEO), marketing (SEM) and analysis (SEA) and online advertising. Sure this was contemporary in an online class room I had to log-in at prescheduled times.

The motivation to do that was an implied lack of online experience, a missing understanding of the intricacies (details) what makes online different from the classic offline. That this was a bold misperception on my own can be seen in the results. All three exams I finished with 100% (grade 1.0). I was mostly unchallenged, contributed to the topics, explained and even on several occasions proved the tutors wrong.

What surprised me most is the fact that there is an industry that claims that this is all new and you need all new experts and agencies doing it for you. But if you properly learned your business, it is nothing new at all. The rules are all the same! In addition, I found there is simply an industry implying and claiming value where there is none. We talked and learned a lot about analysis, but you can analyse yourself to death. To do an analysis of one simple “advertising” or “website optimization” for the search engines took hours. Aside the need for external (mostly paid) services.

Google Analytics vs. Matomo

I still believe, the tutor on search engine optimization and analysis has been paid to use certain tools. There is no alternative to Google Analytics? Feed the big monster your internal data? By adding Google Analytics, Google learns about “hidden pages” and if they are not password protected, Google can (and does) parse them. Yes, I know many cases where Google had access to pages that were not linked elsewhere. Funny as that is, I have my browser to only accept cookies from the website I visit and not from “third party websites” (like Google Analytics). A not uncommon setting That results in an offset with Google, counting me again and again and again.

Matomo VisitorsInstead of Google Analytics, I prefer Matomo on Premise analytics. They also offer “in the cloud” (on Matomo servers), but that results in the same shortcomings as Google and comes with a price tag. So if you want to become independent of releasing sensitive information to Google, go to Matomo on Premise. If you use WordPress, they are in the process (Beta testing phase) for Matomo for WordPress, which I am about to test on this blog.

As Matomo runs on your own server, the cookies work properly an the analysis are as  good – sometimes better, sometimes worse, just like the difference between Apple iOS and Android or Open Office vs. Microsoft.

Who Do You Write For?

If you have subscribed to the RSS or follow my posts on LinkedIn, you may recall my note on the June-post, which I “optimized” for Search Engines (aka. SEO). And analysed. Funny as that is, the website did not appear much better in the real world search engines. Slightly maybe. But I got quite some feedback from my friends reading this, that I shall go back to write “my style”.

Search Engine Analysis

I somewhat expected that, but was quite shocked to the extend of the quality (or lack of it) of search engine analysis. While we looked at real websites, analyzing using several different services (including Google Analytics), we could create success by the selection of analysis results. It was another fantastic example on the proverb usually (incorrectly) attributed to Winston Churchill: “The only statistics you can trust are the once you falsified yourself”. Presented then to managers without the experience, it all looks shiny and good, but is simply Hokus Pokus.

The Fairy Tale of Reach

Oh Gawd... Helpdesk: Final Level. Pray

How do you qualify “Reach”? By the visitors? See above on Google Analytics relying on IP and Cookie – a cookie they never get in my case. At home, I have a new IP every 24 hours (thanks to my internet provider). Talking to Marketing Managers, I keep getting the confirmation of what I learned in the early days of Internet. In the GDS and first online tools we talked about the “Look to Book Ratio”.

In the good old GDS era before Internet, a travel agent looked up an availability (for a flight, hotel, rental car, etc.). Talking to the customer, the booking was confirmed, a “look to book ration of 5 I believe to remember. At the dawn of online travel booking, the processes got instant. First the availability. Then a booking. But to book, the availability was redone. And that is just the tip of the iceberg of the complexities we (I) resolved developing the first online booking tool in Europe. The look to book ratio exploded. Even adding sophisticated caching (reuse of data), the systems had to “evolve” to manage the increase in processing power needed.

But how does that compute with “Reach”? Reach are generally unique visits. Some SEA-experts use simple visits – every time someone visits or revisits a website or page. Even with the more accurate unique visits, a visit does not tell you anything on any revenue being generated. Except if you use banner ads and get paid by vistor. Aside visits, there is clicks. Most advertisements are “per click”, at least that brings a visitor to the targeted website. But while P.R. and Marketing are not Sales, they are not an end to themselves but must result in promoting the product and services and generate revenue. I know many P.R. and Marketing Managers (and their bosses) not understanding the difference.

If you believe “Reach” is your goal and you value “Reach” above all else, I hope that that reach results in revenue. And you can have the best reach with no revenue. So I call reach a fairy tale. In the end, it is all about revenue. For sales, not only the price counts, but also brand, reputation and being in the mind of the customer. But it all boils down to being where the customer is when the customer needs your products or services, to be in the mind and to come up.

Key Performance Indicators

I think this time we got the numbers right … we just don’t know which ones to use.

What are your KPIs, your key performance indicators in Marketing and P.R. qualifying success?

As a Chief Marketing Officer of a now bankrupt airline recently told me: “In Marketing KPIs are a smoke wall. Do you truly believe all those haters visiting your website are lovers? How can you distinguish visitors?”

They had all followers, all fans, all visitors – but not enough sales. Marketing is long term, make sure you’re seen, together with P.R. looking after your reputation, that it is good, but in the end, if they don’t steer sales and help to improve revenue, you can shunt their KPIs. Even “reputation” and “visibility” are only means to generate sales.

If you reach the wrong people, they don’t mean anything. So what’s your KPIs and are they clear? “The good ones in the little pot, the bad ones for your little crop”.

And our tutor showed us how to tamper the statistical outcome in your favor by selecting what confirms the wanted result. I call that cheating your bosses…

Summary

Wow, I already had five super discussions... -- Don't worry, I've not sold anything either...!
Wow, I already had five super discussions… — Don’t worry, I’ve not sold anything either…!

Talk to me if you are interested to discuss this. It’s a complex topic and can (and does) fill books. But to boil it down, the rules of engagement are the same on- or offline.

KPIs were in use long before Internet and mostly used as misleading as I see those agencies use them. And there is a very strong tendency by those agencies to justify their overvalued work as valuable. So they try to tamper the KPIs and the statistics in their favor.

Who do you write for? What is your goal? How can you reach the customer, spread your brand message, stimulate sales and reputation? If you look at it “academically”, you can spend your time analyzing your efforts to death and beautify the results to your liking or the one of your superiors.

Or you get things done, use two or three tools for analysis and make sure you understand KPIs and use them meaningful.

Sales will hardly work if you have no marketing, nor P.R., advertising and branding. But don’t overdo it. And don’t split them up, they got to interact and work together for a common goal. Revenue. Income.

Food for Thought
comments welcome!

 

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#flygskam (FlyShame) Reality Check

All the industry discusses #flygskam (flyshame), but even given sound studies disqualifying the topic, our own lobbyists fail to organize a concerted response to the case. Let’s have a reality check…

There were some reports recently on German television and in the media. German “Welt” (TV + newspaper) reported “Green (party) Demands: Climate Sin Domestic Flight? Abolition Hardly Saves CO2“.

The use of ships to travel from Scandinavia or Britain to Europe or crossing the Mediterranean I think I don’t need to remind of the extreme emissions of cruise and other ships?

Rail Greenwashing

But there was another article even more to the point: “Where there is a will there is not always a train“. But there are some issues that are unrealistic. The numbers of German Rail are biased and greenwashed. They claim to use only “Green Power”. But in fact, published by the German Federal Environmental Agency, their power comes from the public grid and no matter what “deals” they do, it is grid power. And on the grid, in 2018 only 16.6% has been “Green” (Source). The energy industry accounts for 85% of all Greenhouse Gases of which 98% CO2, the remainder being mostly Methane (CH4) and nitrous oxide (N2O) (Source).

The Myth about Green German Rail
[Image with Link added Oct.21]
So in fact, the amount of greenhouse emissions by German Rail are considerably higher than advertised. As a report from 2018 shows, we talk about up to 83% “dirty energy” on the “green” energy companies… So if we increase the “public” German Rail assumption of 36g per km (greenwashed) and adjust it to reality, we talk about +200 g/km. Suddenly the published 201 g for flights is not so bad at all!

But what also needs to be taken into account is the emission per passenger. Be it rail, in average used 22% only, whereas those passengers are mostly commuters, filling up the trains above their limits in the rush hours. That is not only true for the commuter but also the long-haul routes. This year, the long-haul trains’ punctuality was only 69.8%. For 2018, German Rail reported 16 routes operating above capacity – passengers finding no seat being just another annoyance, half of the delays are a result of those overused routes. That 20% of the trains are in (often unscheduled) repairs, toilets and air condition known to be out of service just being others. Just a reminder, the average load factor of flights according to IATA is about 85%.

e-Mobility: Battery Greenwashing

Given the devastating destruction of the natural environment in Lithium mining, I do not understand that politicians push forward battery-based e-Mobility. Using fuel-cell technology we can use the existing gas stations infrastructure. Refueling takes only about five minutes! And given a broad use will lower the prices and make the technology available on smaller cars too. They can even power scooters, so don’t tell me it doesn’t work for a compact car!

Instead they promote an ecologically catastrophic technology with a completely missing loading infrastructure…?

More information I addressed in September 2021 in the post The e-Mobility Lie. Inspired by a documentary by German ZDF’s Planet(e): Mythos Elektroauto (naturally German). [Added Oct.21]

Ground Sealing

Memmingen Airport (FMM)There is an important advantage of air travel to both rail and road that is frequently not addressed. The issue of ground sealing!

Airport

For an airport, about 2,500 x 45m are typically “sealed for the runway, in total about 3,000 by 400 m are required for a regional airport, of which only 25-30% of the ground are “sealed” by infrastructure, 70-75% being grass areas. So we talk about 400,000 m² of an average regional airport being “sealed.

Highway

A highway with four lanes is about 31 m wide with about 24 m being sealed. A 50 km highway such seals about 1.2 million m², so three times as much as a single airport. Highways are known to be an insurmountable obstacle for wildlife.

rail bridgeRail

For Rail we talk about a minimum of 12 meters sealed width for 2 tracks, up to 20 meters on high speed train routes and and average of about 15 meters. So on 50 km of rail we talk about 600,000 m² of sealed ground. Before we start talking about the railway stations…

Ground Sealing Summary

I don’t have the number, not even for Germany, but it might be an interesting comparison for the aviation industry to compare the total ground sealed for highways (not talking about cities) and rail, compared to airports. I think that will be a devastating result for the ground transportation modes.

My hope on rail is that hyperloop we will not seal more ground, but will be established underground.

Bio-/SynKerosene

Image: Carbon Engineering

Yes, I am a big fan of the CO2-tax. If it is used to compensate for bio- or better SynKerosene! So far, all eco-taxes are abused to cover up for growing demands of the policos for their “other agendas”. But did you know that the German air traffic accounts for less than 0.3% of the CO2-emissions in Germany? (Source)

National Geographic last year reported about a development by Canadian Carbon Engineering, using CO2 with hydrogen (H2) to create artificial kerosene (and gasoline). Whereas there are industry sources to provide excessive CO2, hydrogen can be created using solar parks. The resulting bio-kerosene is an independent power storage. As the CO2 from burning that bio-kerosene equals the amount that was used from the environment, it is a completely climate neutral solution. And using solar energy for the electrolysis and the power needed for the processing, there is a power loss, but that is ecologically irrelevant.

But… Why do the media and politicos actively neglect those developments? Why do they go for dirty Lithium?

Summary

So what is the reality check for #flygskam (flight shame) vs. the “green rail”? Green rail is a myth, the power consumption not close as “green” as they say. Considering the ground sealing also favors aviation. And should we in aviation invest large scale into bio-kerosene, lowering the prices to competitive cost levels, replacing crude-oil-based fuel… A CO2-tax such might be an enabler for the conversion. If our lobbyists would show balls, which I’m afraid from experience, they don’t have.

But sustainable transport, including air transport is acknowledged as an important factor in the United Nations Sustainable Development Goals to develop regions, counterbalancing inequalities and disparities!

The United Nations Sustainable Development Goals

I think it should not be aviation bashing, nor should we greenwash rail, but we should develop a sustainable transport network for everyone. Connect individual transport to rail, hyperloop or flight. It is the mix we need, not enemy stereotypes! And we need funds to support strategic projects selected, not the ones having the biggest lobbies. And “batteries” are no solution but a pest! Lithium mining destroys the planet!

#flyshame is out! Flying is a vital service for a global world. To disqualify it with false facts does not help to make our world a better place.

#railshame is my new buzzword!

Food for Thought!
Comments welcome…

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Cognitive Disonance Resolution

Cognitive Dissonance Resolution

Cognitive Dissonance Resolution

Working this week with a group on topics like P.R. and Corporate Strategy, there are some basic rules, again resurfacing on my conscious thinking…

Two topics were in hot, heated discussion these days, especially when we talked bout Cognitive Disonance: Greta Thunberg and Boeing 737MAX.

Greta Thunberg

Not only in the big cities around the globe, also in towns like Brunswick (Braunschweig), the movement Friday for Future is a root movement. Following the example of a little girl from Sweden, kids go demonstrating around the world to promote the need to counter climate change. In Germany, formerly pacemaker of “green development” the government is way behind their own targets, let’s not talk about the Paris world climate targets. In Tirana, the city “stinks” from car gasoline fumes. Scientists believe it’s not five to, but five after twelve already! We can only reduce the impact, no longer avoid it.

So now, surprise surprise, that kid in Sweden went on the street to demonstrate against the political powers that be (PTBs) ignorance. That action triggered a cord and other kids around the world thought it a good idea and joined in the demonstration. Demanding action to secure their future. And all those PTBs can respond with is that they’d be truants? Their only reason to go on the streets is to be skipping school? That’s all you can come up with? Sure there are the one or other camp-followers, but mostly those kids have genuine concern about their planet.

But their activity provides a good example for cognitive dissonance. They put a finger in a wound that most of “us” adults have long found our way to suppress. Because the information does not compute. We know we kill the planet, but let the others start saving it. What can I do?

My personal answer is to support the kids. To not “look away” and “blame the others”. In German history, our people looked away, the blamed others. It caused a holocaust.

Michael Jackson sang about “The Man in the Mirror” to make a change.

In Germany we had a barrel-burst campaign “You are Germany” – what do you do to make things better?

Interesting, what discussions are triggered, discussing cognitive dissonance resolution and how different nationalities and cultural background result in totally different approaches. In Germany, a typical approach is to dissect good ideas and find faults. Can’t tell you, how many “friends” in the past year told me that KOLIBRI.aero cannot work. It did very often remind me of that favorite quote by Lazarus Long (a Robert A. Heinlein character): “Always listen to the experts! They tell you it is impossible and why you can not do it. When you know that: Go Ahead!

Boeing B737MAX

Another very good example and discussion topic this week about cognitive dissonance resolution was the Boeing B737MAX.

Our industry always promotes Safety First. But I have a lot of examples that our industry works on the limits, hoping for the best. Be it my recent post about disruption management or the managing of airport turnaround (A-CDM), we all know that we do not work efficiently. But cognitive dissonances often result in ignorance, suppressing conflicting information. We know the truth, but we suppress it, give ourselves explanations to justify the shortcomings.

Now there was another crash of the Boeing B737MAX after Lion Air Flight 610 crashed in Malaysia half a year ago (29Oct18). While there are also “supporting reasons”, as usual a chain of events that leads to disaster, I personally believe it was mainly the ignorance of Boeing engineers, developing an MCAS, not informing pilots about such an important design change. Combined with a semi-religious faith in their technology. But I believe computers are there to assist us. I remember the Air France flight 447, where the instruments showed wrong data, switched off the computer, in result the flight stalled and crashed into the the Atlantic. We also should be reminded about the “unsinkable” Titanic.

After the recent crash in Ethiopia, there were calls for grounding of the aircraft instantly, given the similarity to Lion Air 610. It is noteworthy and was discussed very controversial, that our own minister responsible for aviation voiced against a grounding, only to be overruled by EASA. But neither America, nor Europe responded “safety first”, but focused on the commercial impacts of a grounding instead. Meanwhile even the U.S. under Donald Trump confirmed the necessity of the grounding and aviation sources expect that grounding to take on for several month. Which does remind again of the pioneer in jetliners, the de Havilland Comet, loosing three aircraft in nine months, which lead to understanding of metal fatigue on the air frame called by the way the metal was connected using bolts – creating micro-fractures.

Oh Gawd... Helpdesk: Final Level. Pray
Boeing MCAS development

Now Boeing implements a new technology to cover up for the new behavior and instead of being transparent, they hide. Then the sh** hits the fan in Malaysia. The event now shows that Boeing did not operate “safety first”, but mismanaged it by delaying the necessary update. A result of cognitive dissonance resolutions? It must not be, so it is not? That backfired now and is a rather pathetic expression of professional disaster management. That the U.S. and Boeing had to be “convinced” to ground the aircraft has proven a big mistake. Today, the media reports that the Ethiopian officials confirm a very similar situation and “many parallelisms” to the Lion Air crash.

We cannot and must not operate on the Principal of Hope! An airliner recently posted that we need a crash to change something. I disagreed, but Boeing did itself and our industry a major disfavor to the reputation of aviation safety. Media today also refers back to the 787-incidents and grounding resulting from batteries catching fire. What I do not understand is that following Lion air Boeing P.R. obviously did not develop a “worse case communication plan”.

From Wikipedia: “On March 11, 2019, in response to the Lion Air and Ethiopian Airlines accidents, China was the first country to order all 96 of its 737 MAX aircraft grounded. In the days following the Ethiopian Airlines crash, airlines and authorities around the world suspended the operation of Boeing 737 MAX 8 aircraft (or in many cases all 737 MAX variants) one after another, contrasting with the usual coordinated approach. Two days later, the U.S. Federal Aviation Administration […] became the last in the world to ground the aircraft, reversing its previous stance. Boeing eventually recommended the grounding to the FAA.”

It must not be! It cannot be! So it is not.
Cognitive Dissonance Resolution at work…

Food for Thought
Comments welcome!

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Aircraft-on-Ground, Disruption Management …

… and the Ongoing Demise of Small and Mid-Sized Airlines

P.S.: While I wrote this article, Germania, an airline that I know from the beginning of my career, who’s team I booked at American Airlines to Seattle to pick up their first 737s, an airline I have had a personal attachment to, went into insolvency grounding all aircraft after many years of financial losses. The demise of Air Berlin 2017 brought easyJet on their home-apron in Berlin in force, no longer some competition, but clear one-on-one. Such the chance to establish lucrative routes in Berlin evaporated. Instead of benefiting from the demise of their largest local competitor, Germania had to sit aside, watching the threat growing.

Germania did, what they had to do, they focused on niches. Niches that were too small, to fragile to give them safety. Routes they developed well always threatened to be taken over by their competitors operating with lower cost. Erbil, under threat of war, Beirut, …? They announced a base in Pristina (Kosovo). They ordered A320neo, in an attempt to stay somewhat competitive to their competitors like easyJet also introducing the modernized aircraft. Else they operated tourism charter flights – which are in great demand in summer, but one after another airline in that market files for bankruptcy at the end of the season. And Germania published financial troubles as early as August 1st, 2018. So they could not do what needed to be done: Generate enough money in summer to succeed across the harsh winter.

You cannot succeed if you play it small, if your cost is not competitive to your competitors. Not the small virtual airline competitors, the other “day flies” lasting one summer season, two at best, but the big ones. The easyJets, Ryanairs, Wizzes, etc. It’s not fuel cost development that kills you. It’s bad management. It’s a strategy without USPs or with very weak ones – there’s reason, the other airlines don’t bother the routes Germania did.
And as I outlined in an article I published on LinkedIn, this was no sudden issue, they lost money for years!

As it is being said, the unexpected increase on EU261-expenses, the “EU passenger rights” also had it’s impact on the financial situation. If you sell a ticket for € 100 and you must compensate € 300, it does impact your revenue. So back to the topic – flight disruptions.

Having worked last year on the business plan for KOLIBRI.aero as well as on projects related to Airport and Airline Operations Control Centers, flight disruptions have reappeared as an ongoing topic of increasing concern. And my experience doing a study a few years ago at delair together with Zürich Airport (ZRH) about the impact of the deicing forecasting and management tool on Swiss (airline) operations at Zürich became a strong source for my advise to airport operations managers.

Image ©2010 Flughafen Zürich

When working with ZRH “Ice Man” Urs Haldimann on the study, I also got some feedback from Swiss. While managing the deicing in winter is not that much a problem, neither airports, nor passengers understand the rippling effect to the schedule. And often enough, not the airline’s own managers. That in the evening in warm Mallorca, the flight may be late, because of a deicing delay in the morning. So while higher force is accepted for the flight cancelled in Zürich, very often, the airline is required to pay EU Passenger “compensation” multiple the price for the ticket. So a major delay can be far more costly than just related to the immediate flight.

The harsh winter 2013/14 in North America (as likely this recent one) became known in the deicing industry as the Polar Vortex. The accumulating delays forced JetBlue into a “two day network reset”. Crews and airplanes were anywhere but where according to schedule and crew planning they were suppose to be. It took the better part of two days to relocate aircraft and crews back to the planned position, also to make sure the crews received their legally due rest, to then start the new day with a fresh start. As needed as that decision was, imagine the impact to passengers on flights that are booked usually 80-90%.

Disruptions can also be thanks to airport closures for other reasons, delays can be caused by as trivial as a broken baggage belt, a common thunderstorm or a ground handling crew doing a coffee break in the wrong time window – all things I experienced in my professional life. Flight crew duty times and technical delays are more common. Did you know that the Top 10 of “punctual” airlines have 15-20% of their flights delayed? That means 1 out of 5 flights is lateTo “celebrate” such achievement is beyond me, I honestly feel embarrassed that our industry cannot do better! Don’t come with the typical “explanations” covering for the incompetence to do better. Needless to mention that this is about “departure delay”, whereas passengers truly don’t care about those as long as the flight arrives on time, right? I was recently on a flight that left “on time”. Doors were close, the aircraft was sitting at the gate, waiting for it’s slot in the deicing and departure.

More recently, Primera Air, Azur Air or Small Planet Airlines closed down. Cobalt Air followed shortly after I published the blog post. At least for two of those airlines the cause was said by their respective CEOs to have been “unexpected” cost for delays and disruptions. Though not reconfirmed, rumors have it such were also the cause for the financial troubles Germania faced in Mid-January 2019, filing insolvency early February (see P.S. above). “Refund portals” organizing refunds for delayed passengers result in higher number of refunds. Small fleets with no spare aircraft causes the ripple-effect to sometimes swap over into the next day(s).

Lesson learned from my research about Zürich delays: It very often is cheaper for the airline to cancel the flight to make sure the further aircraft “rotation” (planned flights for the remaining day/week) are not impacted. Especially if i.e. winter operations allow for “higher force” reasoning of the cancellation. While the airline can show goodwill and help the stranded passengers, in such situation they are not legally forced to add the legal, excessive passenger compensation for delays. It also in fact reduces the overall passenger upset. And Zürich can predict the delays!
What I expected quite a while ago is the information of upcoming delay situation to the inbound planned airlines. The example I keep using: Once Zürich (or any other airport) learns about arrival-, turnaround- or departure-delays would inform KLM before their flight leaves, that it would likely develop delays in Zürich and may have an excessive delay departure, maybe KLM would cancel the flight?
The concern: But if those airlines cancel their flights, then the flights will leave early, so KLM could operate on-time…?
Ain’t that shortsighted? Oh holy dear Saint Florian – don’t burn my house, take the neighbor’s one…
So what would be needed would be a bonus/malus system. If an airline “volunteers” for the sake of the overall operation, to cancel a flight in such a situation, maybe it’s relatively empty, could be merged with the following flight – the airline gets a priority the next time, so the full flight gets an on-time departure. An airline deciding not to join that system will never get prioritized and take what they get – including the delays.

Another ongoing discussion is the promotion of the big players for “SaaS”, Software-as-a-Service, more commonly known as “Cloud Computing”. What in my experience lacks of one vital thing, the fallback for a “line down”. There have been three cases that I (just me) know of last year, where line-down caused major flight delays. Because there is no fall-back in place.

Photo by Darren Murph / The Points Guy
Delta takes weather seriously, with a team of 20+ in-house meteorologists (Photo by Darren Murph / The Points Guy) . Taken from Daniel Stechers LinkedIn article.

That problem is multiplied by data silos. As Daniel, VP at IBS points out, there are too many screens an operations manager in the typical airline Operations Control Center (OCC) or also in the AirPort Operations Center (APOC) have on their desk, using old-style Gantt-charts, weather maps and other “sophisticated tools” that show them what happens out there. Very little tools that analyse the data automatically, giving you decision support on a disruption. Or warning you of potential disruptions giving you decision support how to avoid them.

While we do need to replace those multiple screens with dashboards, highlighting what to look at, I disagree to some extend with Daniel’s implications, as I believe we will need to be able to expand from the problem, onto the relevant Gantt charts, graphs, tables and maps. Worse in my eyes is the underlying reason for those screens, as they are clearly attributed to data silos. And if the left tool does not know what the right does, if the airport, the ground handler, the airline have different “realities”, no wonder we have friction that results in ineffective operation causing “issues” and delays. As I mentioned in my article about APOC, OCC, NMOC five years ago. And if I ask about interfaces and am told “XML” or “ASCII”, we talk about triggered “push” or “pull”, but not about a live interface. Another data silo.

Coming back, to close this FoodForThought-article, let’s come back to Germania and other airlines which we have lost recently. If you have no assets (aircraft leased or sold/leased-back which is the same), if you outsourced everything (to which I include “cloud”), if you don’t have “spares” for covering up disruptions, you make a very good business case on the old joke: “How do I become a millionaire in aviation? I start with a billion.” Or the other one: “Saving, no matter the cost”. It’s called a “virtual airline”. And I predict we see increasingly those virtual airlines to fail, as they lack size, assets and revenue (RASK) to compete with their competitors.

Food for Thought
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