In today’s world almost every company sets up key performance indicators (KPI) to track and ultimately reach corporate goals — so do airlines. Besides generic KPIs, as for example finance or marketing-related KPIs, airlines usually implement KPIs to monitor their operations performance.
However, since airline operations are based on various, complex processes, that amount of operations KPIs is sheer endless.
To give you an example: When we start a project with an airline, we usually have a set of +50 operations KPIs to launch an initial discussion. And our product catalog contains even more than 100 airline operations KPIs. Indeed, not all of them have the same priority, and many KPIs address specific business models or sub-processes.
Most Important Airline Operations KPI – What We Analyzed
To answer the question of most important airline operations KPIs we took a look at our clients. That means we’ve analyzed more than 15 airlines using the A
- 4 flag carriers (e.g. Lufthansa, Saudi Arabian Airlines or Swiss Airlines)
- 2 medium-sized airlines (e.g. Icelandair)
- 2 Charter Operator (e.g. Condor)
- 5 Regional carrier (e.g. Air Dolomiti)
- 2 Low-cost airlines (e.g. Volotea)
- 3 Cargo Airlines (e.g. Lufthansa Cargo)
For each of the airlines, we checked which KPIs they are using on their A
6th — Misconnex Quota
Misconnex Quota, which is calculated as the percentage of connecting
It has been quite surprising to see this KPI in this list since it is not of interest / not relevant for point-to-point airlines. Additionally, the KPI reflects a rather complex indicator, that requires a thorough calculation model and extensive data.
However, for hub-and-spoke airlines, the KPI can be seen as main differentiator and quality feature, which certainly is the reason why many of those airlines use the KPI.
5th — Arrival Punctuality
Arrival Punctuality is calculated as the percentage of flights that arrive on-time at the planned destination airport in relation to all operated flights. Normally, a flight is counted as on-time if the arrival delay is not greater than 15 minutes.
Our analysis showed that 67% of all airlines are using this performance indicator.
Although we assumed this KPI to be ranked much higher, it turned out that especially network carriers aren’t focused on this indicator. Of course, that doesn’t mean these airlines are not focused on punctual operations. However, the strategic and operational goals in terms of on-time performance are often linked to a different KPI.
4th — Utilization (or seat load factor)
The Utilization KPI is calculated as the percentage of checked-in passengers in relation to available seats of an aircraft. As an additional factor, some airlines include the route length as an additional factor in the calculation.
71% of all airlines analyzed are using this figure.
Interesting fact: Utilization is the only key performance indicator of the TOP 6 KPIs that is not related to customer satisfaction, but on profit-oriented operations. That shows us that customer satisfaction or product quality are considered as the main driver and goals of airline operational performance.
3rd — Delay Minutes
Delay minutes as a KPI is used by 82% of airlines analyzed. Although this performance indicator is used in different forms.
Some airlines show the total amounts of delay minutes as a bold number. A larger portion of airlines tend to show the delay minutes clustered according to underlying delay reasons, as for example technical, handling, rotational, airport, weather. And a few airlines show only delay minutes of specific delay reasons as they consider as most important or influential for their operations.
Interesting alternatives: Some of the airlines move away from showing the plain delay minutes and put them in relation to the number of flights or passengers. Results can be the average delay minutes per flight or average delay minutes a passenger experienced today.
2nd — Regularity
The indicator reflects the percentage of operated flights in relation to planned flights. Or in other words: How many flights have been canceled. 90% of all airlines analyzed are using this fundamental performance indicator.
Although this is one of the most basic KPIs, it is surely one of the most important — especially to passengers. This reason why not every airline is taking care of this KPI can be found in the specific charter operations model. Since charter airlines typically don’t cancel flights (but delay them sometimes for more than a day), these airlines aren’t using the KPI on a day-to-day basis.
1st — Departure Punctuality
And here we go with the winner: Based on our analysis, Departure Punctuality reflects the most important KPI for airlines. 100% of airlines analyzed are using this performance indicator.
Departure Punctuality is calculated as the percentage of flights that depart on-time at the planned origin airport in relation to all operated flights. Normally, a flight is counted as on-time if the departure delay is not greater than 15 minutes.
Actually, it wasn’t a big surprise to have this KPI ranked first since departure punctuality is one of the most significant quality KPIs for airlines — especially when it comes to competitive advantages.
Airline Operations KPI — where are the environmental indicators?
Interesting fact: Although environmental KPIs (for example, fuel consumption, CO2) do not rank along with TOP 6 KPIs, we’ve seen a considerable increase in their usage. Will be interesting to see how this develops in the future.