One year after go-live of their Airport Management Center, Moscow Sheremetyevo is the best ACI ASQ airport in Europe. Coincidence?

Lasting success is not a result of coincidence. It's the result of focused hard work.

When Moscow's Sheremetyevo International Airport established their Airport Management Center by the end of 2011 they endeavoured to achieve these goals:

• To consolidate the coordination, monitoring and control of the different airport-wide spread operations control centres
• To effectively manage the airport across organisations
• To significantly shorten reaction times on irregularities
• To improve the capacity and act with standard operating procedures at hand to provide excellent customer service from end-to-end

We are very glad to have been part of the project with our technology and business expertise.

One year after their go-live, ACI names Sheremetyevo the best European airport in service quality. The Airport Service Quality (ASQ) is one of the most prestigious research programs on Airport Service Quality involving 250 airports in 50 countries.

Is this coincidence? Maybe they collaborate better than before, internally and externally. Maybe they act more like a business and more performance oriented. Maybe there are less friction-losses between processes and organisations.

In the end, what counts, are the results. And this award is outstanding because it comes from the end-customer, the passenger.

The 7 habits of highly effective punctuality management

As soon as an airport or an airline has a punctuality record month, they publish press releases, they celebrate. But how sustainable is such a short-time success? If you check their performance from then on, you may find them falling back to the levels before.

Can on-time performance be actively managed? If you think it can't be managed or can only be resolved by others, the following 7 habits may present a different perspective. If you already manage punctuality, you can assess where you are in your quest.

Habit	Characteristics
Accountability	There is a sufficient number of delay codes to differentiate delay causer Each delay code (with sub-code) has an owner or responsible organization The delay code assignment process is clear and in place (assign, accept, reject, handling of disputes, final call). Secondary delays are allocated to the original causer Delay cost is calculated and assigned to the causer
Transparency	Delay code assignment and on-time performance of every organization is transparent to everybody. Data quality is high Share performance with other airports
Standardization	Only one definition of delay codes and delays across the airport based on IATA standard, incorporated in the Airport Handling Manual (AHM) Any non-conformance e.g. different reporting from an airline to its head office will be brought forward to the Governance Forum
Governance and Benchmarking	Multi-stakeholder Airport Operations Control Center to manage the daily operational on-time performance and escalations Has a Punctuality Manager Punctuality Board, chaired by the Airport's Punctuality Manager, with delegates from handling agents and airlines proposes and tracks actions Punctuality targets are defined and broken down to each stakeholder Maybe an award/penalty pool for on-time performance Benchmark against other airports
System Integration	Delay codes and delays are captured or integrated into one 'global' system. That system should also allow to automatically track issues of a flight which could have caused the delay in case of disputes.
Communication/PR	Constant, effective communication among all stakeholders Maybe an award for the best punctuality improvement program
Empowerment	Agree on challenging yet achievable goals but leave it up to the partners to implement sustainable improvement Provide sufficient resources for punctuality management and improvement programs

The love-hate relationship between airport operator and hub carrier

There are mutual dependencies between an airport operator and a hub carrier. Both companies contribute to the overall product "Airport". In many subject areas, the interests of both parties are therefore identical. Different interests can occur in subject areas in which the airport operator represents the interests of all airport users and they do not meet the interests of the hub carrier, or where the airport is representing their own interests.

Different Roles

The airport operator is holding the concession to operate the airport and is therefore responsible that the infrastructure is used efficiently and suffices to accommodate future growth. The planning and the day-by-day management of infrastructural resources should therefore stay where the financial responsibility is located i.e. with the airport. Airports leaving the management of infrastructure to airlines will be faced with inefficiency and continuous demands for more and better infrastructure which produces higher costs (for example inefficient resource allocation and lack of control of slot adherence). A hub carrier is planning their network and schedule in order to satisfy the demand of passenger and cargo transportation and in doing so, to make as much profit as possible. For an airline, the planning of resources like aircraft and crews is their core competence and should not be handed over to an airport as the financial responsibility to shareholders lies exclusively with the airline.

Different Businesses

There is a big difference of the cost structure between airline and airport. An airline has 70-80% variable costs. In case of an economic downturn it will reduce costs by eliminating flights with a low profitability and can so reduce their main expenditures substantially and quickly. The planning horizon is usually 2 flight seasons except for fleet planning which is covering 2 to maximum 5 years. An airport has 70-80% fixed costs. The main cost factor, infrastructure, cannot be reduced quickly if revenues drop because airlines cut their flight schedule. Airports therefore tend to build functional infrastructure which is cheap to build and maintain. The planning horizon (master plan) covers often the best part of the concession period and can be as long as 30 to 50 years.

Conflict 

Though the relationship between hub carrier and the airport is a symbiotic one there are conflicts in the one between hub carrier and hub airport. From the airport’s view, the hub carrier presents with its big market share a cluster risk and a danger to its independence. To attract other airlines is the sensible thing to do in order to mitigate those risks, at least from an economical and entrepreneurial point of view. This is a balancing act though, because the airport has to be careful not to cause a too competitive environment in order to prevent an adverse effect on its main customer. The hub carrier in turn expects from the airport a better and more exclusive infrastructure than the other airlines to get a competitive advantage. All this of course offered at costs which should lie considerably below the prices paid by competitors for less suitable facilities. And there should be no competition, even to destinations presently not served by the hub carrier.

Conclusion

This conflict exists at most of the hubs of this world. It should be addressed by airport and hub carrier in order to find a cooperation model without intruding into the partners business or responsibility. It should not be lopsided but serving both partners even if it means compromising. It should allow both, airport and hub carrier to grow and to conduct its business within limits to be agreed on in a memorandum of understanding, without interference of the partner.