What’s Your USP??

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

KeyholeI keep telling people that you have to understand your business model, you got to understand your “Unique Selling Proposition” (USP). But then I fall in the same trap. Implying “initial” understanding…

We recently had a discussion on this with […] on CheckIn.com and found them to have a typical misunderstanding, considering us “competitive”… Say what?

So yes, it brings up the question: What’s our USP… And why are we not competitive to anyone? What makes our dashboard “different” (unique)? And why is it so difficult to make professionals understand…?

It seems simple enough.

It’s not the “MIDT”

Current “solutions” focus on flight data (MIDT, etc.). We focus on passenger potentials. And thinking further down the road; our “route level” will focus on commercial relations between the regions, ethnic traffic (VFR, visiting friends & relatives) as well as Tourism (taking into account the hotelrooms per population). We believe (from own airport and route development experience) that flight data is for established routes, but nevertheless require – other – experts to analyze. As they also relate to frequencies, flight times, air fares, reputation, and other “soft factors”.

But we look on the ground.

Own experience: A low cost carrier “cannibalized” a regional aviation route, the regional carrier was forced out. A year later, the route was dead. For the flight profile was on a double daily, small airplane, business travel. The low cost tried triple weekly, big aircraft, low fares, tourists. Sorry, no tourists that route…

So don’t put us in the box “passenger review”. This is new. Our tools are especially useful on routes without any previous flight operations, without comparable flights from neighboring airports. When “MIDT & Co.” leave you in the blind.

The Isochrones People

It’s not really about Isochrones either (though we call ourselves The Isochrones People). Where common Isochrones usually are results of more or less creative guesswork and simply look at how far you get in 30, 60, 90 minutes driving from the airport, their source data is usually on county level or worse, often the figures do not compute with our own findings – not even close. So what’s the source and do you trust it?

Just some examples from public sources, what we had to deal with:

samples

It took us four years (out of five) to compile our data sources, test, throw away, dig into them, correct them (usually very much) and compile the sources in a way we can reuse them without too much work. Because every year there are changes, communities merging, splitting, renaming, …
Find solutions to calculate mass drive times. Where the commercial services limit to 1 million requests a year (at a fortune), we have that number in a few weeks. So we use commercial “standalone” solutions like the logistics industry uses, but still – running a country takes some days of pure computing time.

The Stuntmen

Still having some bugs, using commercial software for the mapping caused the maps to be close to unusable in Eastern Europe. Not professional for sure. So we had to relaunch. Now we use Open Street Map with a mix of their data and mapping data we receive from the countries. Which differ from what the commercial map providers sold us, but “suddenly” and to our expressed delight fit the statistical sources we use. And the bugs we solve one by one.

Wonder why no-one did our stunt before? Wonder why we think no-one (in his/her right mind) will? Above is your answer. But was that really necessary?

Eyesight for the Blind…

From our experience and that of the experts out there supporting us (airlines, airports, and their consultants), we know there is need for understanding the local customer base. And highly expensive, often outdated analyses of questionable quality at exorbitant prices. So yes, we think our services are needed. And if you don’t use them, you remain blind on one eye.

So what’s our USP again?

We’re not just polishing your Crystal Ball as I keep saying. We expand your vision and understanding to what’s truly important. But wasn’t yet available for no-one dared to address the complexity behind it. So trust the airport they know their market? The best you could do. Now we do better. We qualify their impressions with hard data.

And we make it comparable.

And that’s why we don’t compete with the flight data providers. We do something new. We do the other side of business. The hard one ツ

Seen our demo yet? Three airports. Full analysis. Free to use. But we have almost 600 more: https://www.CheckIn.com/

We’ll debut at Routes and hope to speak to many of you. It’s still “brand new” with cuts and edges. We will smooth them out and improve, we promise. But what we have was simply beyond imagination.

Until now. We launched.
Come. Have a look!

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Purchasing Power & Airports

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

For many years, I use a graphic overlay in Germany in my presentations. I plan to make it available in CheckIn.com in the near future on a European level… I think it speaks for itself.

The influence on airports to purchasing power. Yes, it’s a hen-egg question, but a fact that politicians should think about. Here’s the latest. May it be useful for you too…

Germany Purchasing Power vs. Airports

Sources: gfk.com + Wikipedia
Updated 2017

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APOC, OCC, NMOC and A-CDM – a Bigger Picture

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.
IHS Jane's ATC Innovation Award 2014
IHS Jane’s ATC Innovation Award 2014

Returning from World ATM Congress in Barcelona (with the IHS Jane’s ATC Innovation Award in my baggage!), I think it’s time to address some feedback on an issue that I keep discussing in LinkedIn and elsewhere: The need to “link” the Airlines Operations Control Center (OCC) and the APOC (Airport Operations Center), the latter being a vital part in A-CDM.

Unfortunately, I see it happening frequently that these “control centers” live in their own little universe with little to no links to their peers. Talking about “Big Data”, Sabre as well as Amadeus and Travelport are “big data players”, though in danger to keep the silo thinking up too long.

Where Sabre once brought global e-Commerce to aviation, back in the 60s, back in the mid-80s, we installed the first Sabre Terminals in European travel agencies, aviation now stumbles behind on the possibilities of global e-Commerce, thanks mostly to technical limitations. As no-one wants to invest… If AA wouldn’t have invested at the time, where would we all be today? But is TPF (Transaction Processing Facility) still the core of our being? Or is it time to move on?

“When we are taught aviation at university we get the impression of how advanced aviation technology really is. When we start working, we are at awe, how little common sense or state-of-the-art is applied in aviation technologies.”

[a student at DLR German Aerospace Agency I recently talked to]

Today’s Agenda

Some keywords what I mean to address here are definitions such as A-CDM (vs. CDM) and Departure – or concepts like Collaboration or Rotation

What is the difference between an Airline Operations Control Center (OCC) and an Airport Operations Center (APOC)? And what about the Air Traffic Control’s Network Management Operations Center (NMOC)? And where is the “collaborative aspect” in these?

Right now, they are just three different data silos and collaboration, where it exists, is on a very small local level.

The OCC focuses to limit the negative impact any disruptions have on the operation of any single aircraft in the fleet. The OCC is – so far – the only point that has a rotational point of view, looking at the entire rotation of the aircraft and trying to minimize the impact of disruptions not just on the flight in question, but for all the ones following that particular “segment” (flight A to B).

PassengerRights2With increasing legal demand to reimburse passengers on late or canceled flights beyond the value of their net fare they paid, this is were money for the airline is burned. And impact of disruptions and delays at the airport or in the air space may be a nuisance for the work at the airport or the air traffic controllers, but they have a commercial impact on the airline:

They are expensive.

Nevertheless, I seem to be rather alone in that point of view in discussions. Yes, there is an intellectual understanding at airports and ANSPs, but I have a gut-feeling, that it does not “compute” there really: Or why is it, that many ANSPs are not having their representative in the APOC? Not to talk about direct links yet. Or in the OCC? Or why do many APOCs not have direct (data) links to the OCCs of even their most important airlines?

What is … Departure Time?

Eeee...gypt_One discussion a few days ago addressed the definition of “departure”. And it is such a basic difference in definition, it hit me like a hammer, making me understand the impact of that different perception! When air traffic control talks about departure, they talk about the take-off of the aircraft (ATOT). When the airline and airports talk about the departure, they often talk about the time, the aircraft leaves it’s parking position at the terminal or on the apron, the off-block-time (AOBT). I had trouble, understanding, why an airport should invest into a “Pre-Departure Sequencer” instead of a DMAN in the delair-definition. The difference is based on the same subtle misperception of departure. The PDS and most “DMANs” out there focus on the TOBT, taking somewhat into account the delivery of the aircraft “in time” to the runway. Based on a rather “static” assumption of ATC capacity. The DMAN in delair perception optimizes the “real” departure. Taking into account minimum separation of aircraft, depending on the Standard Instrument Departure (SID) route and other highly complex parameters, the DMAN calculates the best TOBT. Thus, no matter the general disruptions at the airport and the real throughput on the runway by ATC, it delivers as many aircraft as possible for departure. That maximises the throughput and in turn minimizing the recovery time after general delays or disruptions.

All that though happens at the given airport, i.e. Zürich. Talking with airports about departure management, the issue is about always that ATC (the ANSP) does not participate in the departure management, does not provide the needed information and – heresy! – how could we just imply that we could sort out the sequence for the air traffic controller? It works in Zurich? Heresy!

Is A-CDM not an FAA and Eurocontrol requirement? Burn it at the stake!

But now we go a step further…

Rotation

The impact of the aircraft rotation and why A-CDM is something airlines should consider linking OCC to APOC, consider to spend time though the ANSPs who initiated the entire process are the ones stumbling behind their once shining visions of collaborative approaches:

Because the ANSP thinks in “Silo” and leg (flight from A to B).

A friend just recently told me about a major market, offering free access to the excellent flight-data for all flights within the region to the ANSP of a neighboring region, giving this to be offered in reverse to them. The neighboring ANSP (smaller) is not interested, the data is for sale. And they don’t see the additional value having access to the live flight data offered to them. Excuse me? That is Silo thinking.

eastman

And that is, why aviation technology today is way behind other industries. Because there is still silo-thinking. “Collaborative Decision Making” is a nice concept, but it fails real life on a large scale for the narrow-minded thinking of the people who’s job it would be to push the idea! It’s not about the bigger picture, but simply about own benefit. People call that “Greed” and it’s a mortal sin.

Food for Thought
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The Right Perspective

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

inside-outNew Airport Insider recently published a blog by one of who they call the “Generation Y”, students, getting ready for the travel and aviation industry. What triggered my attention there was a very basic, though very common misperception, what I call “the inside-out-look”.

What’s wrong with that?

That is rather easy. If you provide flight services, you fly both directions. Worse, if you subsidize any airport, you likely do it to attract commerce to your region (tourism is commerce too). You likely don’t do it to make the people in your region to take their money elsewhere. As such, the focus of airports and politicians alike must be on the outside in, or as we say in the travel industry; the incoming.

In the example, which is very common, the French author considered “rail” a competitor to flight. Which is true on the inside-out-look, or outgoing, but it’s simply missing the point once you look outside-in.

crowdedtrainsAside of Germany, France and a handful other nations, train is usually no issue. Within these countries, train is very competitive on the local market, especially the high speed trains like French TGV or German ICE. But now I go abroad. Into another country. I go into any travel agency, even in France or Germany and ask for international travel. Give me a guess: How often will they offer you train, even i.e. Paris-Frankfurt? All they intuitively look for in phase 1 is “flight”. Is the city the client wants to connect to bookable on the GDS (Global Travel Booking System)? If not, the agent (hopefully without showing you) rolls the eyes, curses you and starts looking up how the f*** to get you to that godforsaken town you ask for…
noflights
Offline Airport

In short: If you have an airport “nearby” with scheduled services that link you into the global aviation networks on the GDSs (connections are important), you are visible. Else, you’re an annoyance. If there is an airport “nearby”, travelers may take train, bus, rental car or taxi for the remainder of the trip.

pickupLikely, not knowing the language, maybe not even the local alphabeth, it’s going to be a taxi or a car from a large (global) rental car company offering navigation system. Or a personal pickup…

Later, the train may become a competitor. But that’s another story. To trigger global commercial interest, an airport is a strategic answer.
But not just the airports, but also the connectivity by scheduled flights, which can be booked in the GDS, connecting the airport to the global aviation networks! Second lesson, most local-minded politicos miss to understand with their inside-out-look…

Food for Thought
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Global Economic Centre of Gravity

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

A Wake-Up Call

Frankfurt Airport at night
Frankfurt Airport at night

If you ask yourself, why Germany and Europe and their Aviation Industry stumbles behind on a global scale, ask our politicians! Ask them why new airports are being built in Turkey (+150 Mio. passengers) and Dubai (+160 Mio. passengers), triple the capacities of Frankfurt (56 Mio. passengers), more than double that of London-Heathrow (70 Mio. passengers). Each! More even than all London Airports together have – and they operate at their limits, new expansion stalled in bureaucracies. And ask them, why German Airlines go bankrupt (Augsburg Airways, Cirrus Airlines, Contact Air, OLT, …), struggle to survive (Lufthansa) or are already steered by Arabs (i.e. Air Berlin, Darwin Airline) … Our answers? “Air Passenger Duty“, night curfews, stop of 3rd runway in Munich (instead of Transrapid), Capital Airport disaster in Berlin, etc., etc.
There was a time, when German Lufthansa was the measure of all things. Without Lufthansa, i.e. the Boeing 737 would never have been build, nor become the most successful airplane type of all times.

Emirates A380 Hub Dubai
Emirates A380 Hub Dubai

Today the big shots are called by the Arab airlines, Emirates wiht 39 Airbus A380 just ordered another 140 of that mega-airplane, their fleet of 200 aircraft triples with more than 400 new aircraft on order. And Lufthansa’s Star Alliance partner Turkish Airlines doubles the fleet, adding almost 200 to the existing 200. And as mentioned, Istanbul gets another airport (they have two already) for another 150 million passengers, three times as many as Frankfurt manages today.
Lufthansas order list may look similar, but most of the aircraft needs to replace older generation “gas hogs”. And with 10 A380 and another four on order, with 29 747 with just 10 new on order, Lufthansa is in no position to play in the same league as an Emirates.

Germany Purchasing Power vs. Airports
Germany Purchasing Power vs. Airports 2016 [updated 2016]
What many oversee is the commercial impact of aviation. As I show for many years now the correlation of economic centres in relation to airports and their size, there is simply also a historic development giving a warning example.

As Carthage and Rome have been the centre of the world in there time, as was Genoa (Columbus) or Bombay. Always the metropolises where strategically located at trade routes. And as shipping (the one on the water) got competition by rail, street and aviation, developments in aircraft construction shot airports like Shannon or Anchorage into the insignificance of history.

train-vs-planeMy former boss compared this with the old American railroad tycoons. Their self-conception was to build rail tracks and operate large iron horses, not the mass transport of people and goods. As the first aircraft were developed, they belittled these developments. As the World Wide Web developed, Microsoft belittled this development and to date limps reactively behind current developments (the Windows 8 Apps are simply uncompetitive compared to their Apple paragons).

Merkel-PutinAnd currently, the politicians of the “industry nations” miss to set the right tracks for the future. Would Moscow get the Russian corruption in check, no politicians would dare to challenge the authoritarian regime of this resource rich country. Just as they handle China with velvet gloves, knowing exactly that money rules the world and in the end, if they want to “profit” from the business, they dodge their high moral and ethics first… And aviation is simply a punching ball for them, screaming “noise” and “pollution”, no matter the major, largely unsubsidized developments in quieter and fuel efficient aircraft… Yeah, don’t think, just hit’em and milk’em!
For aviation, it is finally about moving people and goods from A to B (as efficiently as possible). And who believes the thousands of aircraft seats ordered in the Middle East would fly empty… Where does the traffic flow? Minimum growth in Europe. A graph by the CEO of Turkish Airlines given when he took seat of chairman of the European Airline Association AEA pinpoints it:

global economic centre of gravity 1971-2031

At the same time Lufthansa impairs it’s cooperation with Star Alliance Partner Turkish Airlines, with the reasoning that they would “unfairly” pull longhaul passengers to their hub in Istanbul. “Obstinacy” you call that I think. Because factually, in the current political sludge and struggle for survival, Lufthansa has nothing substantial to counter such developments

Cash cow - milked dry
Cash cow – milked dry

Aviation in Europe: Lufthansa and Air Berlin have rested too long on their successes, Western politicians simply understand aviation as a milk cow they can drain, ignoring the negative repercussions to commerce of their decisions against aviation development. Even Ryanir “stumbles” and frantically tries to reshape the own, aggressive business model, replacing it in fact with a core-different business model. If that will succeed? I doubt it.

Feeder for the Hub (FRA)
Feeder for the Hub (FRA)

My expectations: One global hub will remain in Europe. With Easyjet and current focus by Norwegian, London has a good chance, if they get their capacity problems managed. London isn’t dependent on the drip of British Airways as are Frankfurt (Lufthansa) or Paris (Air France), being tied to these airling operators for the better or worse.
Passengers from or to Europe then will fly with regional feeder services into the real global hubs in Moscow, Istanbul, Abu Dhabi or Dubai. As a hub to South America Portugal could position itself, but also Madrid and Morocco (outside the EU) are showing ambitions, a prophecy being rather risky there.

The traffic and commerce streams are changing. And I have concerns about the ability of the industry nations politicians to realize that the world suddenly bypasses them. And when they wake up, it will simply be too late.

Food for Thought
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Expanding the Situational Awareness Horizon

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

“The high accuracy of the tactical forecasting of the de-icing demand by arosa de-icing allows us to pro-actively prepare for upcoming delays or flight cancellations with the ground handling companies, airlines and other involved partners. Our partners have come to understand this high accuracy to give them a tactical advantage compared to other airports working without such tool, allowing them to prioritize their flights and manage not just the current situation, but to prepare for it.”
Urs Haldimann, Head of De-Icing Coordination, Zürich Airport

“arosa PMS is a vital tool to early identify capacity constraints, we have it usually on the ACC’s center screen. Its identification of upcoming delays allows us and our partners in the ACC to take preliminary action, minimizing the real delays and their impact to our travelers.”
Thomas Hansen, Head of Airport Control Center, Düsseldorf International Airport

situational-awareness-source-eluniversal.com_
Source: eluniversal.com

One of the issues I keep discussing and explaining these days is the necessity to expand the situational awareness horizon in operations (aviation).

Today, most experts in operations are working based on “experience”. Though in stress, errors and misconceptions are likely. Where the traffic normally is ambitious, it is worse when all flights are full in high season. Taxiway constructions has impact to runway capacity, more ad hoc traffic than normal and then there is that weather front that might worsen the situation. The weather front? Which weather front. Ooops, missed…

“Pre-tactical” my colleagues call it, as “forecasting” in operational terminology is used for seasonal forecast. That you could imply to forecast traffic development or de-icing delays for the upcoming hours? Heretical!

Is it? Or did aviation simply loose it’s bite in embracing technological possibilities? One hyped word today is “Big Data”. If you embrace “Big Data”, why would you recoil from the idea of mathematically sound forecasting of several hours of flight planing?

Food for Thought
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Weather Whims

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.
Composite Photo (JB)
Composite Photo (JB)

Air Berlin reports 86.6% load factor only for July, thanks to the weather, the last minute passengers were missing.

Ryanair and Easyjet report “only” 1-2% growth in ticket sales for July

Norwegian growth – I am sure they did not have as much “impact” of the hot summer weather as we had in Central/West Europe.

In general, I hear that many travel agencies complained about the lowered interest during this record hot July – do we call it a centenary summer again?

Despite the fact, I currently work on Winter Operations again, preparing for my presentation at WinterOps.ca. And I just happen to think about the Eyjafjallajökull and its impact to European flights in 2010.

What this shows again (in my believe) is the impact of weather to airline flight management.

Airports operate at the limits of their slots. But what are those slots based on? Good weather? Seasonality? Winter Season (in Europe) goes from End October to March, just covering the worst period and enabling the airports to reduce their flight movements. Though why people would fly less in winter remains beyond me, I appreciate to leave the ugly rainfall at home for a week in the sun – and business travel is mostly reduced during July/August – the summer holidays.

All it does tell is the missing understanding of airline management. No matter if summer or winter, if sunny or cold, the aircraft has to fly. Preferably fully booked at good prices. If you only sell in summer, you need to ask higher prices as you have to cover your losses during fall, winter and spring… If you need to do that, your prices are likely not competitive.

Sky Airlines started first to build a German subsidiary with the original idea to utilize the fleet from Germany to the Canary Islands or Egypt in Winter, when travel between Germany and Turkey is low. Whereas the same question about utilization sure also applies to the hotels in the regions.

Image ©2010 Flughafen Zürich
Image ©2010 Flughafen Zürich

So yeah, that’s why I do address WinterOps and see tools such as the one developed by delair as important for airlines. To increase the “throughput” during “adverse weather”.

Zurich Airport reported a record season last winter: 75% more de-icing than in the previous winter season. 33% more than in the last record winter 2003/04.  At the same time worse snow, the usage of “type 4” increasing from 30 to 41% (compared to type 1). And punctuality dropped only marginally to 75.3% from 79.1% in the previous year. This should be a major wake-up-call not as much for the airports as for the airlines! Because it reflects that hundreds of flights less had to be cancelled or delayed. Given the ability of Zurich to forecast the development by several hours, giving the airlines time to prepare, inform the passengers and thus minimize the impact. The airlines should be demanding such technology at the airports they fly to and from of even finance it themselves.

But WinterOps aside, the recent reports also show how dependent airlines to date are on the weather. Given the little profit margins they control, a “hot summer” can be hopp or topp for a route or even an airline. All yield management can fail when weather is involved. And yes, doesn’t that remind me of the “fog hole” at Stuttgart-Echterdingen…

Just some

Food for Thought

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What is A-CDM?

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

As many ask(ed), the blog might be the best to address your questions, about my new life @delair… And beyond.

As a student lately quoted to me, she expected airlines and airports to be on the forefront of technological development and integrated processes. She was surprised to find the truth being (mostly):
Nobody speaks with anybody.

FAA_NG_ahead

I have been aware of FAA NextGen before, but you may already see the shortcoming of it: It only addresses the time from a departure to the arrival at the airport…

Now A-CDM (theoretically) takes care of the processes from the arrival to the departure and starts to develop the concept of an integrated solution beyond the airport itself. A-CDM stands for Airport-Collaborative Decision Making. So the reality at most airports today is that the different companies servicing and serving the airport are communicating by telephone, fax, telex or other inefficient means with each other and the level of automatism at airports is simply devastating.

But this addresses two parts of a process, largely ignorant of the other. To solve this, the ANSPs (Air Navigation Service Providers) organizing the “air space” need to interface with the ground handling processes of the airports, involving airlines, ground handlers, government bodies, etc., etc.!

In reality, the two approaches should interface to each other in a collaborative approach too, so far, the ANSP pushes data to the airport: “Eat This”…

A-CDM

Airlines think in “rotations”, usually on a “weekly” basis. An aircraft takes off Monday Morning, flies all day to different airports, overnights, flies again, until it’s Sunday and the aircraft is back home where it started for another weekly rotation. And there are technicals (i.e. aircraft grounded due to engine failure or a warning light malfunction), weather (such as caused by an ice-rain or thunderstorm), or other operational delays, making the live of an airline network planner and the operations control center (airline department trying to cover the afore-mentioned problems) not any easier. Now add the complexity of inefficient ground handling processes and air traffic control and you wonder that any flight takes off “on-time”…

DUS ACCAs my first “job” in delair, I happened to be at the Dusseldorf Airport Control Center (ACC), where the airport created an operations center, bringing together intentionally the different stakeholders in the ground-handling process, being the airport’s own departments, the airlines, ground-handlers, but also the government bodies – not the ANSP (yet) I am afraid. And with a worldwide unique tool by delair, they not only react “on-the-fly” to the operational situation, but the software forecasts the traffic development for the next 12 hours (arosa PMS, Performance Management System). Enabling the ACC to see bottlenecks before they hit them and take pro-active counter-measures to minimize their impact or even avoid such completely. At all other airports, these bottlenecks are handled, when it hits you in the neck. Not very professional in my eyes. Predictive chaotic and uncontrolled situations is the opposite of situational awareness and it adds to the incurring delay.

Example: If the country faces heavy snow, the de-icing process reduces the airport’s capacity to take aircraft into the air. If you see that coming, you may be aware hours before, that you will have to cancel at least 50% of your flights. But which ones? In the current environment at most airports, it is ad-hoc decisions. In a controlled “predicted” situation, the airlines may select a short-haul return-connection to be cancelled, but a flight where the aircraft is needed at the destination airport to be prioritized. Say the airport needs to run with 50% reduced capacity for three hours – predicted two hours before. To have the shuttle flight leaving to the nearby airport, likely to face same weather problems, does not make sense. The flight to the (warm) South though, does make sense, as until it comes back, the weather should be back to normal…

WinterOps.ca_
Hear me at WinterOps.ca: De-Icing Swiss style (a case study)

[Updated: Link to presentation added]

Keep in mind, thinking about this dilemma: Only an aircraft that flies makes money. Cancel the flight and see your hardly accumulated profit margins evaporate like butter in the summer midday sun! By paying passengers compensations applied by government legislations beyond reasonable scope. Sure the airline calculates such into their prices. Making tickets more expensive. An airline looses not only by less flying in winter, but a large sum by paying for cancellations and delays resulting from bad operational support from airports and ANSPs. And so far, the airline pays. Though I heard of first examples, where the airline sues the airport or ANSP for inefficiency-caused expense. Though even those cases do not claim the cost on the entire rotation, but on the individual flight. So far. I truly believe that will change soon!

All that more or less nice and smooth so far, right…? It does not help anything, as long as the ANSPs stay out of the development loop or develop their own ideas without any “collaborative” approach. Sure, there are people there who do think beyond their own, but the feedback I got during the last months shows an extreme level of neglect of the overall situation. Go back to the airline rotation… I could cry.
Consider the weather situation again… Thanks to the snow-storm, several routes have airborne capacity problems. As have the destination airports. But the approach is always local! Even Dusseldorf is largely unaware of the situation in the airspace or at the destinations. As the ANSPs remain ignorant of the needs of the airlines, airports or the rotations. They get the aircraft delivered to the runway and then we face a break. Good luck… And given the weather: The ANSP will handle the flight, no matter if the destination airport can handle it back. So aircraft may be brought in to an airport, when it would be reasonably known that the airport will close soon due to weather development. Ignorance instead of situational awareness! And another likely break in the rotation of that aircraft, causing a ripple down the line.

arrivalmanagement

So after that introduction, a quick excursion to my new world (as the blog topic of the day)… As mentioned, A-CDM defines the ground-based process enhancements. The “arrival manager” (AMAN, mostly on the ANSP-side) organized the delivery of incoming aircraft, prioritizing the runway capacity – unfortunately, largely unaware of the airport’s capacity or processes. Based on the scheduled and planned arrival information, the airport now struggles to handle the ground-based processes. From organizing the Follow-Me-vehicles, to deciding where to park the aircraft (stand), could be at the gate or on the apron with bus-transfer, mobile staircase and additional time needed for transfer apron-terminal (and back out). Oh yes, and the airport and ground handlers usually have a limited number of “bridged” gates where the aircraft stand is right at the terminal, limited number of staircase-vehicles, follow-me’s, busses, etc. At Erfurt Airport, there are four gaterooms (and four aircraft stands at the terminal), but only one baggage belt. So you better schedule your arrivals to not have four aircraft like A320s arriving within 30 minutes… Luckily, they don’t have the traffic to use A-CDM or need it, but it is the same at many larger airports that such bottlenecks exist.

So you also manage the baggage belt, staff rosters to assure you not only have the technology, but also the people to do the job. And the customs/immigration counters (and staff) to manage the arriving aircraft.

Ignoring the idea (just here in the blog, not in reality) to taxi the aircraft to maintenance or park it for overnight or … we then go into the “outbound process”. The passengers want to check-in, so you allocate the check-in-counters. As well as you need to make sure, you have the aircraft positioned to a fitting gate – there are usually domestic and international ones (where for the sake of ease, I do consider “Schengen” as “domestic” in the process). So you send the passengers to the gates. And you better understand that airports mostly do not make much income on the flight handling, today they make money on the “non-aviation-business”, such as the shops between check-in and aircraft. You need to manage the lounges, assure the border security, baggage control and passenger screening to be efficient. See my article about Check-in 2015 for ideas on that…

ATCThen another fun part comes… They are in time checked-in, they are at the gate. But due to ATC-constraints, there is no slot. There might be one at your airport, but at the destination…? Do you board the passengers and stick them into the plane if you know there’s a 30 minute delay? Very likely, if the delay is at the remote airport, you will… Thank you. If it is at your airport and they use A-CDM and a “Departure Manager” (DMAN), they do organize the departure based on the runway capacity. Did I mention that usually a runway is not used for departures only? Sorry, aircraft also arrives and uses capacity… But I only know of one working AMAN/DMAN combination in use. And you do need to consider not only the ATC-slot of the aircraft, but now need to take into account parameters such as taxi-times, maybe de-icing, the flow of aircraft on the taxi-way (you don’t like to have an outgoing aircraft on the same taxiway of an opposite directed incoming one)…

So considering all that data, based on the ATC-slot, you specify the TOBT and the TSAT, the “targeted off-block-time” and the “targeted (engine) start-up-time”… Then you deliver the aircraft to the runway and … pray.

What is my scenario for an efficient operation of air services?

Yeah, right… First of all, the ANSPs need to harmonize their problems. Because in most economies (maybe not that much in North America), there are a number of national ANSPs and there are projects to work with “block spaces”, which is another way of a work-around to inefficiencies… An optimized process should not start with the ANSP or the airport or the ground handler, but with the airline. What does it help the airline to have a “slot” at an airport, if it does not fit the rotation needs. Or if the airline must calculate a “planned delay” in the process as the aircraft will not be efficiently “turned around”, but handled on the apron instead of the gate, as the airport sold beyond capacity. Or worse, held in holding pattern on approach due to excessive demand. And every winter, you add the weather problems, that sure take everyone by surprise… Again…

aircraftrotation
Aircraft Rotation Planing

Why IATA does handle “slot conferences“, but does not address a neutral slot optimization for complete rotations is simply beyond me. Yes, it is complex, but using flight plan data, IATA could develop software to suggest improvements to slots for all involved airlines at a neutral level, taking the rotation as a basis and not – as is today – an individual flight! Today, the airline as the operator struggles to match the available slots to their aircraft operational planning on rotations basis. A common complain by airports is, that airlines have slots assigned, but the aircraft is always early or late, interfering with slots assigned to other airlines. To call that efficient? And the reason is known as soon as you have a closer look: The rotation. A “planned” difference from the assigned slot… Because the “needed” slot wasn’t offered…
Ahh, isn’t the “buzz-word” at the moment in IT? Big Data…

You cannot do such a cross-airline rotation based slot optimization by hand. And rotation may include the airline’s wish to meet certain “waves”, the transfer-windows at hub airports. But I believe, IATA could and should invest into a solution that takes the rotation planning into account and enable improvements to capacity. And the airports should not consider capacity only on the maximum good-weather capacity and wishful thinking, but they should consider bad weather and make contingency plans together with the airlines in the early stage – if flights are being cancelled frequently, the business traveler will reject them as unsave and plan pro-actively on alternate transportation – with severe impact to the airline’s financial calculations. And the airline will be faced with the compensation to the customers and the missing profit from the flight! So at this time, the “looser” is (and remains) the airline. But I heard in the last A-CDM task force meetings, only one airline attended. Which I believe is the cause of the dilemma. You got to involve yourself as an airline and voice your needs. Another nice example by Dusseldorf. Air Berlin as a key stakeholder (hub carrier) at Dusseldorf, has been a key driver in the ACC’s development there. But talking to Route Planners at many large airlines, there is neither “vision”, nor “concept”, that and how the dilemma can be solved. And without receiving the necessary top-level corporate support, this is likely to stay as is. A planned (and accepted) inefficiency.

Yeah, I hope, I trigger quite some (controversial) feedback with this blog post, as yes, such can only scratch on the surface of things. Or cut deep on a single aspect, though there is a whole picture out there. I know the complexities of route (rotation) planning, as I know unmentioned complexities at airports and ANSPs. But

Food For Thought
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Aviation Network Planning – or: how the Crystal Ball works

There is an updated version of this article that we published on LinkedIn in March 2016

crystalballaviationplanning

Two bad news hit the media this week. Ryanair removes flights from Budapest and Memmingen looses the scheduled services to Hamburg and Berlin. As Michael O’Leary (the Ryanair boss) had already announced that Ryanair will ground aircraft in winter (last year they grounded 80), this seems to be rather strategic and O’Leary’s argument it would be because of high airport charges may be just a smoke-ball, decepting the media. Memmingen on the other hand…

It gives me reason to highlight and explain a bit of the Crystal Ball used in airline route planning. It starts with an idea. Who brings the idea up is irrelevant, except it may be a good idea to do a bit additional research, if your boss does.

Having the idea, question is: Is it feasible? So as a route manager, you’ll talk to the airport, you check MIDT-statistics about flown passengers on the route or routes from neighboring (=competitive) airports, you check “facts”, such as official statistics on commercial relations between the two regions, attractiveness to potential tourists or “VFR”-traffic: Visiting Friends and Relatives. Statistical data…

The MIDT-data is by nature incomplete. Often it does not include direct sales with the airline, Internet sales, etc.. Even if it does, it is based on historic data that relies on facts that are meanwhile outdated. Have the commercial relations strengthened? Did they suffer from bad connection and have faded away? How much were, are and will the travelers be willing to pay for the ticket? If the flight failed, why … hard facts preferred, not guesswork or interpretations by the airports involved.

There is something called “catchment area”, based usually on isochrones, frequently a wild guesswork by the airport itself, more wishful thinking than reality. While working with Yulia on the basics of the CheckIn.com-isochrones, I found in all cases we checked discrepancy larger than 10% different from the airport’s own figures. And in all but one case, the “catchment area” did not cover at all that there are other airports competing with the traveler! An example: If you live in Minden, Germany you are about equally distanced to four airports: Hanover, Paderborn, Münster/Osnabrück and Bremen. For the CheckIn.com-isochrones, we took into account the size of the airport – number of passengers, as the more passengers, the more likely that people choose the larger airport. The distance – the closer it gets by driving time, the better. And other factors we considered relevant or only partially available – like flights to the destination and the weekly frequency and seats (the higher the more “competitive). But quite some more! From that, the system now calculates “fully automatic” the isochrones. And the results are devastating! Even on a “global” airport scale.

The smallest discrepancy of the catchment given by the airport of how many potential travelers would use the airport to the catchment we calculated was 50%. The high ones +90%. That is just basic statistics.

On top of it, you have the questions we did not take into consideration when we worked on the isochrones. Like VFR, like commercial relations, like tourism interest, like … And you better know, where you got it from, how likely it is to be overly optimistic or (sometimes, rarely) pessimistic…

Having that information, you start fine-tuning. You likely have several possibilities, depending on the passenger potential. Take a bigger airplane with more (cheaper) seats and lower frequency. Or take a smaller one with higher frequency, what the business traveler’s will like, but the seat being more expensive. OECD gave some figures for a rough calculation I found quite reasonable for a first idea: An Airbus A320 or Boeing 737 with 150-180 seats costs about 8c (Eurocent) per seat-kilometer (not mile). Use this form to multiply that with the distance for yourself. That is the “net cost”, so add the (increasing) taxes and surcharges onto that cost to come up with an idea about the ticket price you need as an average for flying break-even…

A route planner takes into account much more accuracy, such as real cost of operations, variables depending on aircraft and total hours of weekly/monthly operation. But for a start…

Now comes the next tricky step: How many seats can you likely sell from A to B at this average price, and how many might connect to C but use your flight from A to B? Do you have interline or codeshare agreements at the destination? What air fare do you get? Do you operate the long-haul-sector as well? The cost there likely is cheaper as the aircraft is bigger. But you got to have an idea on connecting services – a science of its own…

So now, at the end of that exercise, you can calculate your risk – how many passengers are you sure about using the offered flights? If you are unsure, your risk is 100%. If you have 50% guaranteed load, you risk less. You also get support from the airports usually, either financial, or “marketing support”. Compared to your operational risk, these are “peanuts”. And in the beginning, you run high risk, so it is wise to not calculate that on your predictive models – if you can’t succeed without, you likely loose.

But then comes the key-point, most airports today fail to have an answer for. Having finally calculated the risk, who takes it? In most cases the airline, virtually alone! Under such circumstances, why should an airline risk a new route with questionable return of investment? In charter flights, the tour operators (sometimes) take the risk, also mostly on their own. Lately, unused seats on some business charter flights, operated by large corporations are being made available to the public, either via Internet or GDS (travel industry flight booking systems).

And if that works well, from such a “business charter” a “scheduled service” with a higher frequency can evolve. But in most cases, the airline is left alone. Any question, why they limit their risk, by pulling the plug when the losses pile up beyond their worse case scenarios?

With eroding net profits, eaten by kerosene, excessive flight crew salaries, taxes and fees, the ability to build a new route in two to three years is very limited. If the route does not take off immediately with a reasonable load factor, the losses pile up so fast, the airline risks extinction if it does not keep a tight control on it.

That’s a short summary into the “science” of airline route planning. If you are an airport who seeks a new route, better do your part of the homework. Can you convince your local “catchment area” population to support the flight, even if the schedule and fares in the beginning may feel higher than from one of the competitive big airports in reach? Will your travel agents sell your flights with fervor – I’ve seen travel agencies at airports offering flights from Frankfurt, Munich, Düsseldorf, but not from the regional airport they were living at! Do you have a grip on the local VFR market? And most important: Can you get commitments from your corporates, business associations (chambers of commerce) or politicians about guarantees on how many seats they could fill? If you are a touristic region: Can your tourism managers qualify, how many people they will have flying on the route? It is fantastic to see, how ingenuous most of the tourist boards are about such basic facts: “Fly and we’ll see”. Flown for a decade, not seen…

Okay. As I’ve put it in the past (as a German saying goes): I take a big long stick and grope in the dark. It requires expertise, experience and good guesswork to do something with all that information you get. Good luck is part of the business.

To summarize planning of new routes:

  • The quality of figures available, as well as my trust in them.
  • The cost of operations
  • From those: A more or less realistic load factor expectation.
  • Who takes the risk?

The first two factors are subject to an educated guess…

And what about Memmingen and Budapest? Memmingen likely has to do above homework now, there obviously was a discrepancy between expectation and reality. And Budapest? I honestly believe Ryanair simply cuts aircraft there for winter – they may want to talk to others if the routes justify a year-round traffic! That may convince Ryanair to consider the next winter. Or do the above homework as well to match expectations and wishful dreaming with the harshness of reality.

Food for Thought
comments welcome

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