SOLIDLY PREPARED FLEET CHOICE
Fleet decisions touch the heart of an airline. Besides the financial aspects, the decision affects operational practices as well as the commercial product in detail. Schedule Consult provides professional and independent backing.
Our contribution is to facilitate in the complex trade-off calculations, to ensure that all
relevant commercial, operational, economical and financial aspects are covered and to guard
objectivity in all stages of the process.
Externally supplied data and calculations are not always comparable and it is critical to
assess the complete financial impact on the network rather than the impact on example routes.
Schedule Consult solidly supports your fleet choice:
- CLARITY ON PURPOSE OF AIRCRAFT: First requirement for an orderly fleet choice is that there is clarity on the commercial objectives, the network that suits these objectives and the expected traffic flows. Too often this is turned around.
-
OBJECTIVE INDEPENDENT CALCULATIONS: Compare of the
performance of all potential aircraft types on your planned production. Calculation of the optimal
number of units per sub-type. Trade-off of the benefits of fleet commonality.
-
QUANTITATIVE INPUT FOR NEGOTIATIONS:
Detailed insight in the sensitivities between comparable aircraft types. This is ideal
input in the
negotiations as it identifies which difference in ownership or
lease costs will make alternative types more interesting.
THE STEPS OF FLEET CHOICE SUPPORT
Preparation of fleet choice unfolds in these steps:
1- ASSESSMENT NETWORK PLAN
2- NEEDED CAPACITIES PER FLIGHT
3- INVENTORY OF QUALITATIVE ASPECTS
4- FLEET TYPE MINING
5- OPTIMAL NUMBERS PER TYPE
6- NEGOTIATION SENSITIVITIES
7- RECOMMENDATION
The process builds on close interaction with company professionals, to ensure full
insight in consequences of a potential choice as well as to keep them in the loop. The team
will be closely involved in analyzing the results and defining the recommendations.
First condition to make a fleet choice is to define the desired network . The market strategy must always be at the basis of fleet decisions. Only with a clear production plan in hand, it is possible to define which benefits of each potential aircraft are relevant for you.
For that purpose, it is important to make an objective compare of operating characteristics and effects on the cost structure. With Schedule Consult's Fleet Type Mining format, all possible aircraft subtypes are evaluated and our tools provide a selection of the best alternatives.
Finally, it is important to know how many units of each type can be operated profitably. Our WFL clearly defines the sensitivities involved in this choice.
CAPACITY REQUIREMENTS
Too often (start-up) airlines take the aircraft as a starting point of their commercial
planning: here's an aircraft and how can we use it?
A good match between capacity and demand determines a great part of the fleet efficiency. This underlines once more how important it is to start a fleet study with thorough homework on market and network.
So a detailed picture of the required -multi-year- production, clear assessment of the type of
routes that must be operated and detailed
traffic forecasts
, including a sense of the order of fluctuation are the basis of a solid fleet study. This
also involves a comparison of the price of saying "no" to peak demand compared with the price of
idle capacity or carrying empty seats in the shoulders.
OPERATING COSTS AND QUALITY
A more complicated question to answer is what the impact of an aircraft type will be on the
cost structure. Each region or country provides a different cost structure and the impact of an
aircraft type on company profits can highly differ from case to case. The best aircraft for one
operator is not necessarily the best choice for another.
Quality aspects and operational details weigh differently in each market and can have different effect on company-wide operating costs.
The calculation becomes even more complex when being critical about the edges of the required performance spectrum: What if we don't cater for that one full flight? Then revenue penalties must come into the equation.
Last but not least, many cost factors like lease and ownership costs are the outcome of negotiations. This brings another sensitivity and it is a great benefit to know the exact break-even point of the prefered type before entering talks.
Our Fleet Type Mining concept is geared to providing the answers needed in these trade-offs.
FLEET TYPE MINING
Schedule Consult’s Fleet Type Mining compares a network and cost structure with a
database of over 200 available aircraft subtypes. It identifies in great detail which types meet
the needed operational performance requirements and how costs and revenues will be affected by
each subtype.
At the same time it creates instant insight in the trade-off of the extra costs of fleet change with the alternative of continuing with the present fleet.
FLEET COMMONALITY
The fleet may not become a collection of aircraft types. Fleet commonality has clear cost and
operational advantages, but these do not justify any price.
Aircraft changes are less complex when there are less aircraft types and, depending on the ownership of the aircraft and outsourcing arrangements, normally each aircraft type brings extra fixed costs.
Fleet Type Mining also provides easy answers to these questions as it allows a quick trade-off between the economic benefits of fine-tuning capacities to routes, structurally reducing the number of empty seats on the network, and the costs of extra types in the fleet.
NUMBER OF AIRCRAFT
Once the optimal aircraft types are chosen, the next question down the line is: how
many?
Another of our tools is the Weakest Fleet Line (WFL) model. It clearly pin-points which aircraft in a production plan contribute to profits, which are marginal and which units are not economically justified. WFL makes it easy to calculate the optimal number of aircraft in each sub-type.
In addition, we can support in defining the exact need of spare aircraft, either for heavy maintenance, crew training, charters, extra flights or to cope with delays. Schedule Consult helps to assess the effect of this extra capacity and make the trade-offs between better punctuality or better maintenance planning and the extra fleet costs, also by applying the Punctuality Buffer Planner.
NEGOTIATIONS
After studying all the economic characteristics, aircraft type X is the best for your operation. But is it still the best aircraft under special terms presented by various offerers?
Because in some cases, this is the type of sensitivity involved in fleet negotiations. Schedule Consult facilitates the monitoring of the numbers during fleet negotiations. This provides comfort about the deal that you are closing.
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