Long-Haul Low-Cost? Supersonic? Quo Vadis?

While we work here on a business plan for a new airline, we did discuss and disqualified many of the existing airline models. Is that negative? Or realistic?

These days some news hit me in short succession, that make me rethink the assessment my friend Ndrec and I made when discussing possible, viable business models for a new airline.

I did the picture above a mere year ago. Meanwhile Niki is gone too, as is Virgin America. Mighty Norwegian being said to be likely acquired by IAG shortly. We have “new” players like Blue Air. But the question for any new business case must be:

What is Your (E-)USP?

Now Ray Webster, former CEO of easyJet opened the Routes Europe Conference with a keynote:

“I don’t see long-haul low-cost as a viable model. Operating a small aircraft across the Atlantic is not efficient, and low-cost carriers aren’t going to fill a 787 or an A380”

Ray Webster, former CEO easyJet

Even students traveling on longer flights do want more services the longer the flight gets.

In contradiction to that assessment, Eurowings now opens up New York-services, taken over from the late Air Berlin operating from Düsseldorf. We all looked at Norwegian, though their “success story” also seemingly was bought on the cost of revenue, the airline now is said to be acquired rather shortly by British Airways/Iberia holding IAG (also owning Aer Lingus).

Whereas I simply do not understand the “brand strategy” of either Lufthansa or IAG…

  • IAG: Aer Lingus, British Airways, Iberia, Level, Vueling … Now Norwegian adding to the mix of “it’s not me”?
  • Lufthansa Group: Air Dolomiti, Austrian, Brussels, Eurowings, LGW, CityLine, Swiss, Sun Express. Also “it’s not me”?

The work on a business plan for a new airline was triggered last year initially by some investors, going down the same “me-too”-dead end using old, inefficient Boeing 737-aircraft. Cheap to get, but their fuel consumptions renders them virtually useless.

BlueSwanDaily believes in the future of Supersonic… Are you kidding me? Yes, I believe supersonic will come, but expensive niche for the rich and wealthy. No real change to the Concorde business model.

I myself worked out a “green” concept a few years ago, but we’re neither getting there… The project got grounded in the wake of Lehmann Brother’s and a world financial crisis and the original interested investors gone never took up speed again. [Update: The Korean Wingship seems a ready-to-go WIG, though using conventional fuel, no green hydrogen or battery powered e-engines]

So we looked at models that differ from the existing ones. Where are unservered or underserved markets and why are they not served well? One issue sure is the airline analysis tools misleading their users to “established routes” and airports.

So we started with the original intent of a small scale operation. And recognized why so many such projects are doomed. There is a pilot shortage hovering on the horizon, Ryanair running pilot acquisition as far as South America and Asia. Most airlines do not value their workers but drain them.

And having discussed the very same issue again yesterday with friends who must relocate in the automotive industry as a direct consequence of overpaid managers, back again, using old images:

Maybe. Just maybe. I believe Ndrec and I came up with a sound business idea, which requires far higher investment than we originally envisioned. Coming with a round and sound business plan paying off that major investment in 10 years safe. Because we do have a unique selling proposition (USP). Because we do have an emotional USP. Because we thought it through and instead of failing at the first obstacle, we save cost from day one and make this a company to work for?

And working on that, we learned a big deal about the faults of the airlines we see in the market. And it boils down to the normal questions: What’s your (emotional) USP? What makes you different, why should the intended consumer decide to use your product. We see too much “me too” in the market. Buy your market share in the B737/A320 shark pond?

30+ years ago, my training officer told me that joke:

A man starts a business selling screws.
His friends questions him: “You buy
the screws for 1 €, you sell them for 95c?
How do you want to make money?”
“Oh, the quantity does it!”

My training officer told me to look after yours. Not only in the company, also your supply chain. Make sure you have long-term suppliers selling you the quality you need for a good reputation.

Later I learned the same lesson from space shuttle Challenger, management ignoring their own experts warning them of the temperature being below safety specifications. Shuttle Columbia dying of a piece of foam worth a few cent perforating the heat shield. Of Concorde crashing from a “minor” piece of scrap metal.

I’ve paid very high (in hard Euro) for another lesson. Starting with a sound idea (regional airlines’ franchise concept to share cost and operate a larger scale of operations), it turned out later that the stakeholders did not look for a franchise, but a means to start their own small operation and “share” the cost with the other small players. Clearly understanding the small operations to face obstacles they cannot overcome on their own. Could not. Cannot. Will not. A costly mistake I made. But lesson learned!

Then at delair I learned about airline disruptions and how our industry uses historic processes to “manage” somehow. How airlines use manpower instead of intelligence to cope i.e. with a winter storm.

With Ndrec, I found a seasoned manager understanding the need to either do it right – or don’t do it. And we got surprised how much money we save if we do it right! Not short term, there we need more to invest. But then very shortly, within less than 10 years. Now we reached the point of the reality check: Will we find solvent institutional investors helping us to pull this off? Cross your fingers.

For all those other airlines out there… Do your homework. First and foremost: What’s your USP? What’s the business case?

Food for Thought
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The Bias of Route Viability Analyses

The last months we worked with two regional airport operators on a route viability analysis both airports see as a exceptionally promising: Saarbrücken (SCN) to Reggio Calabria (REG).

Their problem is that it is rather difficult to get the hard-facts on it. Based on our work with CheckIn.com, they thought we might be the right people to look into this.

At first, talking to airline network planners, I was referred to the analysis tool providers. Though interesting, I got the “results” from four of those tools, three “disqualifying” the route, the third one (more correctly) failing with the information of insufficient data. The problem is, that the route in question has never been served before. There are some “comparable” routes, we found the two tools returning results used, from airports in the vicinity of Saarbrücken to Catania (CTA) on Sicily or to Lamezia Terme (SUF) in Calabria.
Then we were referred to the ACI “standard” QSI (Quality Service Indicator), specifying how a route potential is being calculated. There is a very nice introduction to QSI on the website of the North American chapter of ACI Airports Council International. But if you read that introduction, 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”. And while I found my usually very open sources at IATA, OAG and FlightGlobal distinctly tight-lipped, when I called and asked about QSI, they quickly confirmed that their tool follows those principles and how much and why their tool is better than their competitors.

One airline network planning director clearly told me those tools they use, but they are useful only on existing (or to some extend historically existing) routes. As he had provided me his initial impression on that route, I questioned his initial response and he confirmed that they use those tools with an “almost religious” faith. So if they look into a new route, knowing their tools to have a bias towards existing routes, if their tool returns “not viable”, it builds a major obstacle to get them to look into such route.

So we also had a look ourselves into the “route data”, getting statistical data from those other routes from Eurostat (avia_par), the airports, two of the tool providers, as well as three airlines. As discussed in The Numbers Game, we once more were confronted with conflicting data. Public data on Eurostat shows different numbers for outgoing HHN-SUF compared to incoming SUF-HHN. All numbers “close by”, but in most cases, the numbers did not correspond to the other sources! So what “quality” do we talk, if we in a single industry cannot agree to a fixed value?

Okay, so we decided we take the average of the different values we received. Then we compared to the various catchment areas from our CheckIn.com analyses, both the pure isochrone-populations as well as our competitive analysis. Where we found once more that the drive-time zones themselves resulted in major offsets, rendering any attempt to interpret the results as useless. On the competitive reach, we found some “trends”, though it showed clearly that the more routes an airport has, the more choice such is given to the traveler, the lower the average choice of a traveler for a specific route. But even with those constraints, looking at the catchment area confirmed potential interest in the route.

More interesting, I found that aside of Eurowings with about 75-80% load factor on their flights, all other airlines operated with load factors of around 80-85% and up to 90% on an annual basis. Such, it seems that overall, there is very high demand for travel between the regions. But the tools disqualify flights. Hmm.

Working on a viability study, other approaches are to look at the regional demand. Where we got confirmed, what we knew before. There are no reasonable statistics on a regional level. Yes, you get all the statistics on a small scale from Saarbrücken to Italy. Or from Reggio Calabria to Germany. Okay on Luxemburg. But is Italy Northern Italy with higher purchasing power, commerce and industry? Or Calabria? Is Germany Munich, Berlin, Hamburg, Düsseldorf, Stuttgart, Frankfurt – or Saarland or Saarbrücken? You. Got. To. Be. Kidding. Me.

So yes, we can see how much of the industry is where (percentages), how many “Italians” live in the Saarbrücken region, but without there local research (they have done), we could not know that their “Italians” are mostly from not just Calabria (state) but Reggio Calabria (city)… Whereas we talk about many “2nd generation”, having German passports, not showing up in those “statistics”.

So yes, we did the numbers crunching, but those numbers are to be taking with a big grain of salt. Discussing this with my friend, that afore-mentioned airline network planning director, I could “see” his smile. “You check some basics, to get a feeling and have some numbers to confront the [Powers-That-Be, PTBs] in those regions with. Then you travel there and confront them and learn that all you learned is useless and why. Then you talk to the PTBs and learn if and why they believe it makes sense, you question them from your experience and then you decide if it makes sense to take the risk and fly – or not.” And he referred to my 2012 post on the Crystal Ball and told me that he liked my conclusion in it: “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.”

Connect the Aviation Network Developers Conference
Not Paid! I keep recommending Connect° from conviction.

Hmmm… It confirms what I recently told the Minister President of Thuringia, discussing on Facebook about population emigration they suffer. Emphasizing the need to better support the airport to attract incoming business and the necessity for scheduled flights, I told him, it is not the airport acquiring airlines, it is the region. As soon as an airline network planner researches Erfurt and finds all the negative buzz about that small airport there, if they hear the PTBs having promoted bus service from Frankfurt when they had a flight connecting them to Munich, when they learn that the state officials and commercial (state-paid) delegations traveled from Berlin or Frankfurt instead, they understand that the people in the region do not support flight services. They’ll look at the story behind the closure of Altenburg. Then they likely look for locations where the PTBs support flights. Politicians, local industry, tour operators, the people and the media. Discounts on landing fees are a minor factor on the cost and risk of an airline operation. (Except for Ryanair). They are an indicator, if the region is willing to support the flights. I am afraid, that Minister President did not understand that, he instantly fell back into the “airport bashing”, questioning, why in the past the airport’s subsidized flight services did not succeed. No, he did not heed my words. In fact, he was prejudiced and simply did not listen but took his “instinctive” fall-back position on “airport”.

Working with small regional airports over the past years, I know many airports heeding such words, their PTBs in strong and unquestioning support of “their” (regional) airport. Who publicly want their airport and want it to succeed. Who fight for it and take a stand in discussions for their airport. And yes, Connect or Routes Europe are places where you can meet and talk to them. Though there I also heard just recently (again) that many airlines are showing interest in the big airports only and the small have trouble getting a time slot to make their case. Where Connect° had the advantage on the small airports.

Coming back to the issue of this post. My airline friend and I discussed for several hours (thank you!). And rather at the end, he emphasized, why he invests only little time in “analyses”. Because all those analyses will promote the big buddies. They will confirm business potential on the large airports with data silos full of supporting statistics. But they will disqualify any of the small airports solely based on the fact that there are no “supportive statistics”. Following our discussion, he wrote me a very short message: “Jürgen, the game is rigged. Your catchment area stuff is the first thing I saw to give me a somewhat unbiased view on smaller airports in years. Those [other] analysis tools are sold to sell us statistics. Stupid network planners and the ones trying to play it safe and by the books, requesting the QSI. It’s why mostly the small airlines, who can’t afford those tools start new routes.” And why he emphasized to me that he and anyone in his team wouldn’t bother about any route viability studies based on the statistical history of the airport, except for an indicator. “If you play it safe, you just follow the crowd.”

Food for Thought
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Narrow-Minded Management

Content

Airport Passenger Statistics
Catchment Area Case Study
Passenger Terminal Expo
Face to the Customer
“New Airline” Business Concept
Narrow Minded Management

Airport Passenger Statistics

The last weeks were rather challenging. Speaking at Passenger Terminal Expo on Data Silos, Silo Thinking and the need to Tear Down the Walls, Yulia and I also worked on the update of the airport passenger statistics, adding movements to the database to expand our information. And we fell right back into The Numbers Game trap.

The main Key Performance Indicator (KPI), the value that reflects the “importance” of the airport, is the passenger numbers. All other KPIs, like movements, on-time-performance, revenue are scondary. Where I can understand that airports publish preliminary numbers for the press, those numbers are then updated and finalized. By that time, they reach Eurostat, national statistics, Wikipedia, ANNA.aero, Airports Council International (ACI), IATA and other official bodies. How do you define “Total Passengers”?

But then we go back to the airport’s monthly and annual passenger numbers. And to give examples that really bugged me the past weeks.

  • A worse case: No codes, different sortation, wrong numbers.

    Spanish AENA had what I understood an error in their May-data. The numbers are three to four times above the average. And their own annual numbers confirm it, being about that difference too high. If I’d be lazy, I would simply correct the May numbers so the annual total matches the total given by AENA. But is that the error? Working professionally, I informed AENA (airline marketing). Matter of fact, as the airline, I’d be embarrassed and would make sure those numbers to be updated immediately. After one month of no reply, I inquired. Both verbal (phone) and e-Mail. The response was a “blame game”, I shall contact the statistics group at AENA. Excuse me? That’s your understanding of customer support? Are they unable to clear that internally, bothering the customer with the internal (bureaucratic) hierarchy? The following week, the numbers were still not updated. Now, that is embarrassing. So the fact is, I do “unprofessionally” and assume the mistake, as the data owner neglects the issue. Again. Main KPI.
    And their tables? Monthly data split to 12 tables, available as Excel without the airport code. Why again do they provide “Excel”-format? Not for quick data-exchange, that’s for sure.
    The day after I wrote this blog, AENA finally identified the “error” on the data. While all other files showed the current month’s data, the may file was set to show the accumulated data Jan to May. Nevertheless this though being just a “forced error” and not a real data issue, it proves my point that it’s enforcing errors if you split the data into tables. And it does not change that the different subtables in those same Excel sheets are sorted by “totals” instead of airports, such you got to re-sort. And spend time associating the IATA codes to the airports.

  • ANNA.aero maintains what they call the European Airport Traffic Trends “Database”. Now in order to make sure we have all airports’ data that publish monthly numbers, I imported the data into our database and compared. And instantly ran into trouble. Because for i.e. France, more than half the airports’ monthly data does not sum up to ANNA.aero’s annual total. As such, the data must be disqualified for professional use! Interesting, three French airports responded to Yulia’s inquiry for official numbers to use ANNA.aero’s numbers. All three airports being ones where the total does not compute.
  • ZRH-BUD route level data. We wonder, why we have four different values for the route Zurich-Budapest for out- and inbound passengers. Two of them by the respective airports. Two courtesy by “official data providers”. Different numbers on a single given route?? So we find ourselves at a loss, we likely won’t use them. Not just for Zürich oder Budapest, but that is just an example! We happen to wonder, how Eurostat can compile passengers, flights and seats and, when the airports say they don’t report such numbers.

We find several sources for public accessible data. Sometimes you find it on the airport’s own website, somewhere in “Statistics”, sometimes in a press release, usually not in one, but in 12 press releases (see image). And even when publishing the annual numbers in one file, the file comes as a PDF, formatted that they cannot be extracted into a table but copy into one value a line. On a complex table, that renders that useless. So the airport forces users of their data to write the data off the PDF? You can’t be serious, can you?? Sometimes national airport associations publish the data, usually monthly. After we found them to occasionally change the formatting and order even within a given year, we double-check that on the import, burning valuable time. Then we learned to now download monthly data before the annual one was available, as we also happened to fall the trap of intermittent changes (see ANNA.aero). Many such files do not contain the airport codes. But the airport name in the national language. Upper case. No, that does not compute easily and is prone to cause data errors.

Even where Excel is being provided (like by AENA), the files are not ready for instant import, very often missing the unique IATA airport code that would allow to properly associate – but usually airport names in national and uncommon naming, requiring additional work to add the three letter codes to allow for proper import. And then you have those cases, where the monthly numbers do not sum up to the annual totals.

All in all, that shows the neglect airport managers handle “numbers”. Given that we all talk about e-Commerce for 20 years now and for 20+ years I keep addressing the data quality as an issue. Before the internet, airports published their data in the format they now provide by PDF. For journalists or other data providers to type them off. They simply moved the paper to the PDF, being a print format, not a data exchange format. They obviously did and do not understand that times have changed. Keeping with the times, they should maintain and publish the data in ways that they can be pulled using an HTML-call (returning a given-format CSV), if that is not possible, they should at least use an Excel file. If they change data, they should inform the data users about that. But nothing at all shows the modified file (rev.1, v.1), so in case of a discrepancy they enforce a check of all monthly files. Again, we talk about their main KPIs, something they should be interested to make sure that everyone uses the “right” number.

Catchment Area Case Study

Based on our (constantly expanding) catchment area case study about the numbers given by the airports, we understand the concerns, disbelief and rejection of such airport numbers by airlines. As any quick check from other sources (like our free isochrone analyses) unmasks them as useless, guesstimates or even intentionally beautified. I confronted Fraport Bulgaria with their given numbers in a brochure I picked up at ITB Berlin, being 2.3 to 2.5 times, or in percent 230 to 250% above our sound, European-wide calculations. Initially, they backed off, not knowing of the brochure, so I forwarded them photos of it. Then they referred to “drive time offsets”, neglecting the fact that we have comparisons on a European scale and even giving extremely ambitious drive speeds, that calculates to 10, 20% offset at the maximum on the population reach, but not to 230 or 250 percent! So instead of taking this up professionally, their managers decided to stick their head in the sand.

shutterstock 135630023 (licensed)Passenger Terminal Expo 2017

Speaking at Passenger Terminal Expo in the Management & Operations track (speaker notes here), I challenged my audience about Data Silos, Silo Thinking and the need to Tear Down the Walls. It addressed A-CDM and why A-CDM rather usually gets stuck in the early stage of the process. Silo Thinking and not invented here being the most common cause as all my friends in the A-CDM arena tell me. The same being true for airport managers. And an airport general manger told me: “If we don’t embrace that we got to exchange our data, we miss to do our job”. I was sorry I had to tell him his airport being one I don’t have the passenger data for yet.

Brand Management

Another Post Scriptum: These weeks, another several faces left our industry, another “trusted face” leaving UBM. Some few remaining in aviation at least, others move on to other industries, others again (like myself) struggle to keep in our industry.

Ever since I started addressing “Airline Sales & e-Commerce” in 1994″ at the Airline Sales Representatives Association (ASRA), I emphasized the importance of the “face to the customer”. A Logo, a face are things, users attach themselves to emotionally! It’s your emotional USP. Customers (“contemporary” B2B, B2C) knowing someone in the company attach themselves to it. That is not all, sure. Prices for example must still be competitive But not ultra-low. Reputation of the company can (and does) outweigh the price. But also the person you know there usually has an impact to who you make business with.

This is an example from 2007, explaining it to the ASRA members. Unfortunately, they proved they did not understand it. Neither the need as usually well paid Sales Managers to embrace the “new sales channels”; in most airlines the “traditional Sales” and “Social Media” are different divisions. Some airlines more recently trying to bring together what’s meant to be together, usually at the expense of the “old faces”. Nor did my ASRA fellows understand the importance of networking, the group fell apart two years ago and is meanwhile unregistered.

And let’s not go into brand management here, I addressed the idiocy to rename and kill brand identification often enough.

“New Airline” Business Concept

In the last weeks, I got approached about investors being interested to invest into aircraft, seeking which business model to use. The initial idea was Airbus A320 or Boeing 737, leasing that to the low-cost airlines. As if we wouldn’t have a record on the order books, long delivery times and the low cost airlines recently leasing their aircraft to other airlines as they find it increasingly difficult to find new routes. So I came up with a completely new model, quickly qualified numbers and viability and offered it to them. The intended aircraft maker learning about the idea took it up.

Friends I introduced the business concept to, in order to qualify it and get questions about the viability answered wondered why no-one has established such a model yet. I think that takes a little hammer. Or some out-of-the-box thinking.

Working on that concept and following up on Passenger Terminal Expo, also about my rather negative experience with HR and head hunters a discussion arose about a shortcoming of our business culture:

Narrow-Minded Management

We mostly agreed, that most managers today encourage a narrow-minded thinking. This is your job, don’t you bother about the jobs that are managed in other departments. If you do in fact think outside the box, you challenge such managers.

Food for Thought
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On-Time Performance and Punctuality League

Incompatible Data

Mark from OAG directed my attention this week on OAG’s Punctuality League, which they offer for free download and compiled the results in a “dashboard”, though I find that exceptionally unintuitive and more confusing than helping. FlightStats offers a similar information in tables and graphs I find far more intuitive, the On-Time Performance Awards.

Now after a quick first look, it shows already that it’s incompatible.

I just look at the first OAG graph “Top 20 Airlines by LCCs/Mainline Airlines”.

  1. Hawaiian Airlines (89.87%)
  2. Copa Airlines (88.75%)
  3. KLM (87.89%)

and compare to FlightStats, where Hawaiian neither shows in the Top 10 International Airlines nor Major Airlines (neither Mainline nor Network), but only Top 1 on Regional Airlines. KLM is 1st on International Network flights and 4th on mainline flights.

When I first encountered the FlightStats monthly statistics for airlines and airports, I’ve contacted them (with no reply) if I may add that as an indicator to our airport data. As I consider that valuable information for aviation network planners.

But as I stumble immediately over differences, it raises question. Such, it might be a good idea if OAG and FlightStats talk to each other to make sure they use the same data, and logic before they dig into detail. Or that they explain how they value the data and interpret it. As is, there are unexplained differences. Sorry, now I distrust both sources…?

Indicator. Indicator?

It can only be an indicator, as both sources fail to relate the one to the other. My first question would be to correlate the on-time performance to the hub airlines. Because it is utterly unfair to blame an airport, if their major hub airline is notoriously late.

Then one shall also keep the size of an airport and it’s congestions in mind, i.e. British Airways suffering from congestions in London-Heathrow or Thai Airways in Bangkok. Who is cause? Who is victim?

Yes, for CheckIn.com we emphasize that all that data can only be indicators. To be interpreted by an experienced network planner. Because a single new flight makes a major impact on a new or small airport, but has little statistical relevance on a major hub. Saying that, isochrones are in itself valuable statistical data and we put them into our analyses for a reason. As they are a necessity in comparison with the catchment area analysis to interpret the possible impact for a route. In forecasting, you work with indicators, you have no facts.

Big Data – Big Trouble

At the same time you work with big data, so the more data you work with, the more vital it is to get them from a sound source and have them integrated into a common system. Whereas most established data providers, be it OAG, Flight Stats, SITA, etc. have not yet  addressed that for a “good reason”. But as an industry, it is vital we add this and integration is very high on our back log at CheckIn.com of what we where we want to go!

For the time being, national statistics differ from Eurostats, differ from aviation industry statistics, differ from common sources. These differences in data you get from FlightStats and OAG just being an example that this is also an issue in aviation. Who’s right? I even have examples where the numbers figure within an airport’s own website for a given year. In order to improve, we got to tear down the walls! And yes, that’s part of what I will talk about at coming Passenger Terminal Conference & Expo in March. Will you be there? Please let us meet!

Rotational Impact

So. Why do I give these on-time-performance, no those delay statistics so much thought? Aside the cost of delays summing up to millions, they are not just a nuisance, but a problem. Because when I did that additional case study on cost savings, based on the Zurich Airport’s deicing I did for SAE G12 and WinterOps.ca, I learned an important fact from Swiss (the airline). Whereas the passengers impacted by the immediate flight understand the problem and accept higher force, the aircraft is not operating a single flight, but an entire rotation (a chain of flights) during the day/week. Any major delay has a rippling effect in the network. And if you have a snow-caused delay in the morning in Zurich, your passengers on the evening flight from the Mediterranean summer vacation will not understand and file for compensation. And the airline usually pays!

And for network planning, it is vital to know if you have to build in (expensive) buffers into your schedule, to cover up for the potential delays. That means your aircraft and especially crews are not airborne as much as they could be, such causing further loss of revenue. There is a very good reason airlines increasingly add clauses in the handling contracts with the airports punishing for creating delays and rewarding for reducing such. Being said to be an expert in winter ops planning, it’s bad enough about technical or natural (weather) delays. But yes, delays are also caused by aviation management, be it handling agent, airline operations or air traffic control.

A Summary…

So what now. I think the availability of delay statistics is compelling, useful and needed. But take them with care, as you take all statistics. Try to understand how they are computed, the logic behind and ask your provider accordingly. Yes, that includes our own. That’s why we publish the CheckIn.com methodology. Only if you understand it, you can yourself interpret it. Trust it.

We got to understand in our industry the value of data and common data structures. A delay is a delay? Nonsense. As I mentioned back three years ago in the article about A-CDM.

And I distrust any “closed source” company that does not provide me with their methodology on their analyses. Like many airports do. On the other side, at CheckIn.com, the value is not really the methodology (which is sound), it’s the work that is behind it, the compilation of data from different sources, the constant improvements we give that. Only given sound data, we can provide quality analyses. Given the quality data, anyone can come up with more or less professional analyses. Even to come up with the calculations we do to calculate an airport’s impact on a traveler’s likeliness to choose the one or other airport can be replicated. Though no, we don’t explain in detail how we do it, but the general concept. The hard work we spend every day to merge data from different sources, to cover for mistakes and other short-comings – that makes our work so hard to copy… And is a main part of our USP (Unique Selling Proposition), what makes us “unique”.

Food For Thought
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What are the Fact, and to how many Decimal Places?

"What are the facts? Again and again and again-what are the facts? Shun wishful thinking, ignore divine revelation, forget what "the stars foretell," avoid opinion, care not what the neighbors think, never mind the unguessable "verdict of history"--what are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!" [Lazarus Long]
“What are the facts? Again and again and again-what are the facts? Shun wishful thinking, ignore divine revelation, forget what “the stars foretell,” avoid opinion, care not what the neighbors think, never mind the unguessable “verdict of history”–what are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!” [Lazarus Long]
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Not Invented Here

Image courtesy Oxford Creativity

This week, I happened to stumble across this Wikipedia article: https://en.wikipedia.org/wiki/Not_invented_here

Then I stumbled across this image.

It reminded me very much of my experience with A-CDM, where most larger airports’ IT rejects external solutions in order to build a custom-made solution. After several years of work, we have several tires (or tiers?) of different size, incompatible to build upon.

It’s the same argument I hear from many airports and airlines when talking to them about CheckIn.com.

It will take time (and interest) until they understand that it’s not just another “same”, but something fundamentally new.

Linus Torwalds, inventor if the Linux operating system said: “The NIH Syndrome is a Desease”

Food for Thought
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The Numbers Game

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

Talking about CheckIn.com, we have been asked many times, how we crunch our numbers. Or that our drivetimes are different from Google. Yes?

The second question is rather important, as before you crunch the numbers, you got to see what you work with. And this article on LinkedIn by Jasper Venema rang a bell last week…

So let’s talk about statistics today.

Passengers

We are in the process to add some new region to CheckIn.com and as usual, the first and foremost figure we need are the passengers. We usually use Wikipedia, but even between different Wikipedia pages, more so even between different Wikipedia languages, we find different passenger figures. Now we usually compare them with commercial data we get and guess what: There’s official sources such as ACI, IATA, national statistics, airport associations, but also commercial sources like ANNA.aero, Albatross, AEX or others and in all cases, we have – sometimes substantial – discrepancies on annual passengers per year for a(ny) given airport…

passengersSo we started to ask the airports. And get again other numbers.

We know one difference, where an airport association doesn’t use the departures and arrivals, but simply doubles the departures they get. Not very contemporary and definitely not state-of-the-art, but yes, it explains some. Jasper Venema’s article explains some other. But in numbers we don’t much care about explanations. It should be in our industries own and vital interest to use the same number for the same “item” (here “total airport passengers for a given year”). And quite honestly: If the airline has different numbers as they don’t count non-ref passengers, so be it. With most airlines not happy to give out “their” numbers for a given airport or route, the number that counts is the one the airport publishes.

Drivetimes

drivetimes

Whereas we showed long time ago, that they differ from tool to tool. And sorry, Google is neither the best, nor the most accurate of those. We compared more than 20 different tools, from our initial logistics software used by trucking companies via Google, MapPoint, Maptitude, Apple, Here, … Today we mostly use OpenStreetMaps, as we found them on the tests we did in different countries and where other tools failed, they come up with the proper calculations. Even on ferries they are mostly accurate, where Microsoft and Google still translate long-haul ferries with Zero drivetime.

We cannot consider traffic jams, temporary construction sites or detours, but found OpenStreetMap to provide lower speed defaults on highways likely overloaded. We don’t know how fast you drive, but neither do Google, Bing & Co. – we got to work with assumptions.

Start + End Points

ccom_ham_errorAnother bug we have in our backlog and work on constantly (it’s “relax work”) are the city centers. We calculate population based on the municipality. Now municipality borders are nothing really easy to use for mapping. Take the example of Hamburg. For some reason, Hamburg “owns” a part of the North Sea. Such we had to modify our boundary data for Hamburg to exclude that intentionally as it caused questions on our default example and the map to be “off Hamburg”. Then you need a “geopoint”, a given geographical point defined by latitude and longitude. For many municipalities, there is such a point defined, usually called the “admin center”. But many municipalities either have not defined such point – or it’s a (stupid) “theoretical” centroid that does not relate to streets. Where missing, the drive time takes such computed centroid too, the center of the boundary. In many cases that results in a point somewhere inaccessible by road. There it takes the spatially next road, which does not have to be easily accessible or be well connected to the main roads. Or the centroid is too far off from any road.

Airports are also prime candiates. The geopoint to be used for navigation very often is not the terminal road, but the center of the main runway. The next road might also not be near the terminal, but on the other side of the airport. As such, for each and every of the airports in our database, we defined the geopoint at the terminal or closest to the terminal. For many smaller airports, there is no street data in any of the map tools we use, as those roads are managed “privately”.

locarno
Locarno city limits

Around Lugano, we found many municipalities being located in the alps, with a town, and a lot of mountain with ski slopes. Unfortunately, without a defined city center, drive times differed substantially between a drive to the next municipalities city center defined and the one undefined. Having covered those, Lugano remains an “interesting map”, as there are also several municipalities with “exclaves”, split into different parts surrounded by other municipalities. But we can color only the complete one. So parts are in one drive time zone, others are in the next. Look at Locarno, where there is no admin center, but the centroid ended in the middle of the lake…

Helgoland has an airport, but the entire island is banned for cars. No drive times ツ

Population + Maps

European populationAnd don’t underestimate that the population for all those municipalities we have on file are not the same coming from Eurostat, national statistics offices or the towns themselves. The naming differs between those sources and there is no “common code” like we have in aviation, to uniquely identify those towns. That likely also being the cause of the +20% mistakes when using that commercial maps provider (€32K) for drive time calculations that caused us that ad hoc map change earlier this year. Little town Münster, Bavaria is not the large city Münster in Northrhine-Westphalia the commercial mapping provider returned. And is that now Münster, Bayern or Munster, Bavaria or Muenster (Lech)? Worse in France I can tell you… So we had to make sure we only use geopoints and not unreliable “names” and maintain an extensive list of “associations” to make sure we have the data properly associated – until the next update when they changed a lot again.

But worse; you can’t use Eurostat everywhere, even within the EU. With their data being outdated the day they publish them or regions like Scotland using a totally different and incompatible data model, so they publish “calculated estimates” for the wards. More guesstimates than estimates. And Europe only covers just 28 states anyway, the entire Balkan is missing, Norway, as well as most the microstates … Are the Aland Islands independent or part of Finland? Those are just examples.

And then we need to associate cartography data from the cadastre offices that is incompatible on the same year to their (own) national statistics and Eurostat. So that also goes into the number crunching. Do this for one airport is bad enough. Do it for Europe? We wouldn’t try that stunt again, now we know what we had to go through… And no, the commercial “solutions” are just as bad, so we had to do it “again” for our own database. So we use OpenStreetMap for the mapping. But for our layers, we compiled our own database of administrative boundaries, meanwhile mostly from national cadastre offices with own updates to make the maps match the population data.

Other variables

crystalballaviationplanningSo we take into account the airport size by passengers, defining (assuming) the “reach” of the airport. That’s also something variable, as in some areas there’s a lot of large airports (i.e. Germany to BeNeLux), other regions, airports are rather scarce. Spain for example has Madrid in the center and except for two minor airports all other airports are on the coast. To Bucharest a substantial number of people drive eight hours. We calculate ferry times, including standard waiting times, but what about ferries that go once a day and then you have 18 hours to wait for next days (once-daily) flight?

As I keep saying: Despite all the data we provide on flown passengers on that or similar routes, on passenger potential in the catchment area, etc., I disagree with the recent statement by Marc Gordien on his very good article on air service forecasting maths. To look into the future was, is and will be a look in the Crystal Ball. We can only minimize the risk for failure by providing (and using) the best possible data to justify our gut feeling. But considering myself a professional; when I see new bases opened by easyJet, Wizz or other airlines, I frequently find myself at a loss, would have never seen fit to justify the risk. Still, many of those routes work.

IcebergPrinciple

It gives reasons to consider the soft factors. Reputation. Ticket prices (and ancillary revenues). Frequency. Ethnicity. Commercial relations. Tourism. And many others. And my commonly used example where a regional airline opened up a route on a trice weekly basis, only just when they started making money to be cannibalized by a low cost carrier with bigger aircraft and less frequency, dumping the route in less than a year. Unfortunately, the regional carrier was gone, the route is no longer served. Data is not everything. But it helps to qualify the real cases and make sure you understand the risk taken on new routes.

BransonComplexityQuo Vadis?

Do you find something “weird” on our maps? Please let us know! There are still many mistakes and bugs and we constantly work on the database to improve the information we have. But we believe we now have a rather well working system, the bugs our users point us too are mostly either quickly corrected or (mostly) resulting from reasons beyond our control. And the results very nicely match the facts we get from other sound sources from airlines and airports to compare our results with.

We also work very hard trying to simplify our analyses, compile meaningful facts in the dashboard and provide the more complex detail on the analysis page. We discuss options to also interface the data with other tools, though currently, most of the established companies prefer to live in their silos ツ

brilliant, big (crystal) balls
brilliant, big (crystal) balls

Working with (sound) assumptions, the numbers help you to understand and qualify the potential and the risk, but there are exceptions, no matter how many work on the data to improve it. It will remain an ongoing development and ample room for improvements. And such we will gain better and better understanding of the facts. But we can’t read the minds of the decision makers: The paying passengers. We can only assume a likeliness from sound statistical analyses.

We do not replace a route analyst or airline network planner. But we polish the Crystal Ball(s) in use and provide real nicely shining and new ones to take a better look. Check it out.

Food for Thought
Comments welcome!

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