Sunday, September 19, 2010

Revealed - five secrets of airlines to hide delays

Travel Inside, a Swiss travel magazine, reported beginning of September that Easyjet could improve its performance in August in Switzerland (Basel and Geneva) remarkably. More than 90% of all departures were on-time within 1 hour. What? ONE HOUR DELAY is still on-time? Would you consider your flight to be on-time with a delay of one hour? IATA thinks differently and defines a threshold of 15 minutes.

Airlines only cheat themselves with this policy. They waste their own very costly resource, their aircraft fleet, and even forget about knock-on effects.

There are many tricks of airlines (and airports) to hide real delays. Here are five of them:

1) Reschedule a flight; just publish a new scheduled time of departure, inform every passenger and you are done. It is a bit of a cancellation, but nicer done. A practice not really standard, but seems to work.

2) Compare off-chocks to estimated time of departure; instead of scheduled time of departure (STD), compare off-chocks with estimated time of departure (ETD) in your statistics. Saves you quite some delays.

3) Use your own standard to define when a flight is delayed; like Easyjet did with counting a flight as on-time when it is delayed for up to one hour.

4) Cancel a flight (or just not operate it); this is a very neat one. You can cancel delayed flights because of technical issues or weather conditions. Always works.

5) Change off-blocks time after take-off; some airlines use that, in particular internally, if not being monitored. Being very obvious, this magic is used with care, sometimes with the explanation that the time was not correct in ACARS.

Do you know more tricks? Happy to hear them.

Wednesday, September 1, 2010

Do you spend more when your flight is delayed?

When retail spending at an airport is stronger than passenger growth, it is a sign that the airport is encouraging travelers to spend more. The duty free revenue at Abu Dhabi International Airport outpaced passenger growth in the first half of 2010. According to Abu Dhabi Airports Company (ADAC), this is because consumer confidence is returning, and ADAC’s investment program and upgraded retail offerings.

Zurich Airport Shopping

From discussions with airport commercial managers I understand that there are a number of factors which influence the passenger spend rate. Some of them are mentioned above. One important factor seems to be dwell time which is the time, passengers spend at the airport. Obviously, waiting in a queue reduces the dwell time and hence reduces airport retail revenue. There is consent between retail and operations that the passenger flow should efficient (but not too efficient).

We wanted to know the impact of delays on passenger spend. There is a general perception in the industry that more delays mean more passenger spend. We wanted to prove them differently hoping to additionally support the case to improve on-time performance.

We compared passenger spend with delays at Zurich airport. Here is what we found:
  • There is a trend towards lower revenue with better departure punctuality. At the same time the passenger spend rate declines with more delays.
  • With more delays, delay cost offset additional retail revenue.
  • Passenger spend rate fluctuates, irrespective of delays, in particular depending on passenger categories. For instance, during holiday season they are lower than year average. Should be considered in further analysis.