Transcript No Slide Title

Ph.D. M. Tatalović
M.Sc. I. Mišetić
B.Sc. I. Malović Beganović
PRODUCTIVITY OPTIMIZATION
OF AN AIRLINE
ICRAT 2004.
November 22-24, Zilina, SLOVAKIA
1. INTRODUCTION
1.1. IMPORTANCE OF PRODUCTIVITY
1926 SCHEDULED PAX
120 000
2000 SCHEDULED PAX 1 600 000 000
1.2. CONCLUSION – PRODUCTIVITY IS
WORLDWIDE PHENOMENA
2/15
2. DEFINITION AND PRODUCTIVITY FORMS
2.1.
Q
P
R
Q = QUANTITY OF PRODUCTS (SERVICES)-OUTPUT
R = INVESTED INPUT (WORK; MEANS & SUBJECT OF
WORK)
2.2. FORMS
2.2.1. NATURAL (QUANTITATIVE)
2.2.2. ECONOMICAL (FINANCIAL)
2.3. AIR TRANSPORT FORMS
2.3.1. PRODUCTIVITY OF AIRCRAFT
2.3.2. PRODUCTIVITY OF EMPLOYEES
2.3.3. PRODUCTIVITY OF FUEL
3/15
3. AIR TRAFFIC PRODUCTIVITY
3.1. HISTORY DATA 1931-2001
3.2. PHASES
ACCELERATION 77%
EXPANSION
100%
PROGRESSION
30%
DYNAMICS
15%
MATURATION
6-7%
SATURATIONS
4-5%
4/15
4. BASIC PRODUCTIVITY INDICATORS
OF AN AIRLINE
4.1. AIRCRAFT PRODUCTIVITY
9 INDICATORS (PLF, WLF, UTILIZATION)
4.2. EMPLOYEE PRODUCTIVITY
11 INDICATORS ATKm/empl, RTKm/empl.,
RPKm/empl., ASKm/empl., Pax/empl.
4.3. PRODUCTIVITY OF FUEL
5 INDICATORS (RTKm/fuel consumption, cost
index)
4.4. ECONOMIC PRODUCTIVITY
INDICATOR (23+…)
5/15
5. TOTAL FACTOR PRODUCTIVITY (TFP)
MODEL
5.1. TRADITIONAL INDICATORS (FLEET, EMPLOYEE,
FUEL, ECONOMIC)
5.2. ADDITIONAL INDICATORS
5.2.1. OVERBOOKING (USA)
5.2.2. CAPITAL VALUE INDICATORS (GB Cranfield
University)
- CABIN CONFIGURATION
- SISTER COMPANIES, CSA, IN HOUSE INVESTMENTS
IN PROFIT CENTRES
-DIFFERENT WEIGHT CRITERIA
RESULTS: DOMINATION OF ASIAN AIRLINES
(SINGAPORE, THAI, CATHAY, JAL VS EUROPEAN (LH,
AF, BA, KLM) AND AMERICAN (UA, AA, DE, NW)
5.2.3. QUALITY (PUNCTUALITY, LOST BAGGAGE)
5.2.4.PASSENGER SATISFACTION (COMPLAINTS)
6/15
6. FUTURE TREND OF AIRLINE
PRODUCTIVITY
6.1. INFRASTRUCTURE LIMITATIONS OF
AIRPORTS
6.2. AIRSPACE CONGESTIONS
6.3. INCREASING ENVIRONMENTAL DEMANDS
6.4. LIMITED INVESTMENT POSSIBILITIES
6.5. INCREASING SAFETY AND SECURITY
DEMANDS FORECASTING MODEL (PAX,
CARGO)…GDP &YIELD
AVERAGE FLIGHT DISTANCE
0,26%
BLOCK SPEED
0,07%
AIRCRAFT UTILIZATION
0,32%
PLF
0,22%
7/15
7. TFP MODEL FOR CROATIA AIRLINES
7.1. 10 ELEMENTS OF TFP
(WLF, PLF, UTILIZATION (BH), TKm/e, ATKm/e,
PKm/e, ASKm/e, TKm/fuel, GDP per capita, Yield,
Punctuality, Lost Baggage)
7.2. Structure – 67% Natural productivity indicators
17% Economics productivity indicators
16% Indirect productivity indicators
With different specific value of the elements (4 categories)
7.3. Model divided in two phases: 1. 2002-2008
2. 2008-2014
7.4. Starting position and trends
7.5. RESULTS
7.5.1. AIRCRAFT PRODUCTIVITY -10/15%
7.5.2. EMPLOYEE PRODUCTIVITY -25/30%
7.5.3. FUEL PRODUCTIVITY
- 7/10%
8/15
Selected natural and financial results of Croatia
Airlines 1991-2002
Year
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
1
Tkm per
employee
(1000)
2
27,3
38,4
39,1
43,7
42,8
48,9
42,5
42,5
44,0
45,5
48,0
48,2
58,8
51,3
68,7
81,6
69,0
81,5
64,9
69,9
71,3
79,7
88,6
87,5
WLF %
Profit
(mil. USD)
3
Operational
Result (mil.
USD)
4
7,7
26,8
58,4
84,0
95,4
114,0
109,3
121,2
115,8
124,2
141,8
158,9
-5,6
0,7
4,0
9,6
4,7
13,0
-5,9
3,2
-2,8
1,0
8,6
16,3
-2,8
-2,9
-2,1
1,4
-3,4
4,1
-21,5
-1,0
-15,7
-24,8
-11,6
-3,0
Revenue
(mil. USD)
5
9/15
8. CONCLUSIONS
8.1. HYPOTHESIS:
 PRODUCTIVITY PROFITABILITY
RESULT: NEGATIVE – PEARSON’S CORRELATION
COEFFICIENT –0,03 - 0,14
8.2. HYPOTHESIS:
 PRODUCTIVITY REVENUE
RESULT: POSITIVE
PCC = 0,81 – 0,88
8.3. HYPOTHESIS:
 PRODUCTIVITY OPERATING RESULT
RESULT: MODERATE POSITIVE PCC=0,67-0,74
10/15
BUT, THERE IS MORE……
1. NUMBER OF EMPLOYEES
2003 (TRL)
AF
71 654
BA
49 592
LH
39 634
LH pax
LH cargo
1991
39 469
47 181
49 641
34 000 (incl. CITY LINE)
5 000
LH Technik
16 000
LH Sky Chefs
35 000
LH Systems
3 000
LH Commercial
7 000
THOMAS COOK 13 000
=
=
=
=
=
0
0
0
0
0
?!
?!
?!
?!
?!
11/15
2. DEFINITION OF PASSENGERS
UP TO THE YEAR 2000
-revenue passengers
min 25% of “appropriate” coupon value
-INF - OUT
-Code-sharing, FF ?
AFTER 2000
-pax with AD and ID discount up to 50% OUT
-FF
YES
-Code-sharing ONLY OPERATING CARRIER
CROATIA AIRLINES IN 2001 (10 CSA)
OLD METHODOLOGY
NEW METHODOLOGY
137 448 pax
177 566 pax
DIFF. IN METHODOLOGY +40 000 pax
12/15
3. WEIGHT OF PAX IN TKM
IATA WATS STANDARD = 70 kg + 20 kg
cargo density = 161 kg/m3
BUT……..17 carriers > 100 kg
32 carriers < 90 kg
1999/2000
LTU
= 128,2 kg/pax
GBAIRWAY = 122,3 kg/pax
BALKAN
=
75,4 kg/pax
13/15
4. VALUE OF DISTANCE
LONG RANGE CARRIERS
> 2 500 km
SHORT RANGE CARRIERS OU =
610 km
14/15
THANK YOU!
QUESTIONS & ANSWERS
15/15