7-LEVEL PROFIT SCREENING

SWEEPING METHOD FOR NEW IMPROVEMENT ANGLES

7-Level is our complete and thorough profitability screening, full of sharp new angles.

The approach follows the distinctive logic of airline networks, both in calculation method as in screening order.

Level by level, it goes deeper in finding the sources of losses and while doing so, also creates direct insight in alternative planning options.

This way, the 7-Level Profit Screening always provides eye-openers to network professionals.

• Comprehensive in covering all profit drivers

• 100% geared to airline networks

• Sharper sight on network context

• Direct link with improvement options

• Minimizes commercial continuity breaches

1- TRAFFIC FLOWS

An important step before changing schedules, is to detect whether revenues can be improved on the existing schedule.

Our traffic flow screening assesses the value of flows, detects "choking" or displacement effects and checks the effectivity of revenue management.

2- SECTORS / STOPS

Assessment of the value of individual sectors, as far as there are feasible planning alternatives for the isolated sector.

Most common example are stops on multi-leg flights. The screening determines the value of each stop separately.

3- FLIGHTS TACTICAL LEVEL

Assessment of the value of individual flights.

Focus on the schedule context of the flights, making a direct link with planning alternatives: re-scheduling, different flights, etc

4- FLIGHTS ROTATION SERIES

Valuation of flights in the context of seasonality, weighing yearround consistency versus seasonal or incidental peak flights.

Another unique aspect in this approach is in the way ad-hoc charter flights are compared with regular flights.

5- FLEET LINES

Check of profitability of aircraft units, with use of the Weakest Fleet Line Model.

WFL is a ground-breaking OR-tool that detects which set of flights make up for the fixed costs of the aircraft & crew involved.

This provides a very realistic view on fixed costs and the benefits generated throught them.

For one, it gives avery straight answer to the question whether grounding fleet would be a way to save costs.

6- CLUSTERS, HUBS, FOCUS CITIES, STATIONS

High level network decisions like opening routes or focus cities, or closing integral sales deals require specific trade-offs that represent the impact of those decisions.

The 7-Level Screening singles out this kind of decisions, ensuring a full view on the complementarity and synergy of each cluster, including context and side-effects.

7- NETWORK MODEL

This is the most important level as it directly determines company profitability.

The accumulated effect of measures at all previous levels reveals the maximum profit effect that can be expected from network improvements.

This level indicates whether planning measures within the existing network model will suffice for profits or whether additional measures are needed.

For management it's important to have a realistic view on this, because there is also a limit to what can be resolved via the network.

Some issues simply require a different scope or make more fundamental changes inevitable. For instance in the business model, supplier contracts or labor agreements.

USING THE RESULTS

The 7-Level Profitability Screening forms a solid basis for the composition of a Quick Win schedule or longer term schedule adjustments.

Due to the nature of the approach, many adjustment options for improved schedules are already on the table.

Similarly it also provides very detailed input for improvements in Yield and Revenue Management.

The method also enables more direct estimation of the financial effects of measures on company profits.