What Are You Going To Learn With This Blog Post?
There are four essential things about smart airline KPIs, and I provide with this blog post:
- What’s wrong with today’s KPIs and why do we need smart airline KPIs?
- What is the idea of smart airline KPIs about?
- What are the related benefits?
- And finally, what’s needed to bring that idea to life?
What’s Wrong With Today’s Airline KPIs?
Let’s start with a bit of backstory to give you some context. During lockdown from April to June, I was running a concept called Tea with Me. The idea was to have a virtual tea session and discuss aviation topics 1-on-1.
Unsurprisingly, a question many people asked was about my thoughts on the future of airline KPIs. Actually, a question I love to provide my thoughts on. Why? Because I think airline KPIs are going to change tremendously soon.
We Won’t See Many New KPIs
However, the first part of my answer regularly confuses. I don’t think that we will see lots of entirely new airline KPIs in the future. But, of course, Corona, changing customer needs, or climate change will bring up a few new KPIs. Nevertheless, top-level airlines will continue to monitor so-called Evergreen KPIs (Punctuality, Regularity, Seat Load Factor, etc.).
I think that airline KPIs are going to change highly related to today’s usage. Why that? Because the current use tremendously limits the potential of KPIs.
Today’s Approaches Limit The Usage Of Airline KPIs
With today’s approach, airline KPIs are presented in a fixed way. Powerpoint presentations, PDF documents, or dashboard solutions that show KPIs in a web browser.
All of the options limit the number of KPIs. Of course, you can create a Powerpoint presentation that contains 200 KPIs. However, I think we can agree that no one ever will flip through the slides. And yes, you can prepare several different web-based dashboards. But we face the same issue here: No one clicks through all of them.
Long story short: The current solutions limit the amount of airline KPIs that are displayed. Subsequently, the value KPIs provide is limited. Period.
Discussing Smart Airline KPIs Starts With Discussing Visualization
That’s why I’m convinced that the future of airline KPIs is primarily about different usage. Based on new solutions (which allow another usage), entirely new use cases will emerge. Ultimately, these new possibilities will unleash the full potential of KPIs.
But let’s do that step by step and start with a bit of a journey. Close your eyes and think about the way you consume information nowadays?
I’m pretty sure that you picture yourself with a smartphone in your hand and scrolling through a news feed. And it doesn’t matter what kind of newsfeed: Your favorite news app, Facebook, Instagram, Twitter, LinkedIn, and so on. The approach is always similar: Tailored, personalized information and a sheer unlimited amount of information you can scroll through.
Facebook Changed The Way We Consume Information
One of the colossal advantages Facebook and all the other apps provide is that they do not have to limit their content. On the contrary, they want to have as much content as possible created, distributed, and viewed. That’s why all the social networks invest enormous efforts in developing smart algorithms that calculate content relevance.
Adapting That Concept To The World Of Airline KPIs
If we transfer this approach to the world of airline KPIs, we open the door to a world of unbelievable new opportunities. There’s no longer necessary to stick to 12, 18, or 24 KPIs shown in a PDF document. Actually, you can create 1,000 KPIs shown in an endless KPI-feed — as long as you can ensure that the most relevant KPIs are displayed first.
The Rise Of Smart Airline KPIs
Now you may ask, where should these 1,000 airline KPIs come from? An excellent question that brings us to the second part of the airline KPI future.
Utilizing the feed-based approach finally provides the possibility to introduce so-called “Smart KPIs.”
I’ll explain that concept with a short example: On-Time Performance, undoubtedly, is a super-relevant airline KPI. However, in 90% of the cases, this KPI is boring since the value is an acceptable corridor. But your traditional solutions (Powerpoint, Dashboards, etc.) show the On-Time Performance at every point in time — regardless of the value.
Smart airline KPIs are significantly different. Smart KPIs mean assessing KPIs and taking a look at KPIs from different perspectives.
Here are some examples to understand that powerful concept:
- Details: Probably, the overall OTP is quite ok at the moment. Still, the OTP for a specific sub fleet is dropping; a particular route is performing below standard, or a particular country is massively accounting for delays.
- Comparisons: Comparisons are a source of additional insights and value. Let’s say it’s Monday noon, and the OTP is 88.9%. On a high-level, this value seems to be ok. However, comparing that value to the last ten Mondays (same time) shows that the OTP is 10% below average. And there are dozens of comparison possibilities: Average of the same day, last month, last week, annual average, etc.
- Links: Another super-valuable approach is to link KPIs with each other. Although the overall OTP seems to be ok, a detailed assessment shows that more passengers than average are affected by the few delays.
These are only a few examples of how airlines can use smart KPIs to exponentially increase the number of KPIs — and simultaneously, the value contained.
Start Calculating 10,000 Smart Airline KPIs
As a consequence, this means Instead of calculating one single on-time performance, you are starting to calculate hundreds of different, more specific OTPs. For example:
- An OTP for every sub fleet you’re operating
- An OTP for every airport you’re operating
- A comparison of your OTP with yesterday’s OTP
- A comparison of your current OTP with the average of the week
- A comparison of your current OTP with last hour
- A comparison of your current OTP with the average of the month
- A comparison of your OTP with each day of the year that had a similar number of passengers
- A comparison of your current OTP with the last 2, 3, 4, … same days of the previous weeks
- A comparison of your current OTP with your competitors
- And so on and so forth — this list is endless
By doing so, you quickly end up with hundreds of different OTPs. And of course, you should repeat this exercise with all your other airline operations KPIs: Regularity, number of passengers, delay minutes, delay reasons, etc. Thereby, you will reach a four-digit KPI amount without problems.
Smart Airline KPIs: Combining Situational Awareness And Analytical Insights
Smart KPIs, from my point of view, combine two worlds: Holistic situational awareness and analytical insights. And the most thrilling part: Those analytical insights are provided automatically.
Nonetheless, the introduction of smart airline KPIs, with all its benefits, only makes sense —and only is possible— if we change how we use KPIs. That means moving away from solutions that provide a fixed set of KPIs to dynamic and flexible concepts.
Additionally, innovative airline KPIs allow a super-contextual discussion. Since Smart KPIs are extremely specific, they enable discussing root causes instead of high-level conversations.
But let’s continue the journey we started in the beginning. Close your eyes again and imagine opening an app on your smartphone. You scroll through that app as you do on Facebook or Twitter. But hey, instead of cat videos, you scroll through a feed of smart KPIs and other operational information.
What Do You Need To Bring That Concept To Life?
To be true with you: This is nothing that happens overnight. We’ve been working on that concept for several months and have entered the beta-test phase now. What we’ve experienced is that three aspects mainly drive the complexity of this concept:
- Smart KPIs: Besides having the infrastructure that allows calculating the different types of Smart KPIs, it requires a considerable effort to define and configure Smart KPIs. However, the entire concept stands and falls with the quantity and quality of Smart KPIs. That’s why we put enormous effort into it and are now able to calculate thousands of different Smart KPIs.
- Defining the relevance: With the growing number of Smart KPIs, subsequently, the number of potential KPIs that are shown in a user’s timeline grows. Accordingly, developing algorithms that define the relevance of content —and consequently, the position in a user’s feed— requires lots of brainpower.
- Real-time is a must. The whole concept only works with a real-time calculation of KPIs.
The Future Of Airline KPIs — Summarized
The two concepts (feed-based visualization and Smart KPIs) enable an entirely new way to discover KPIs. Additionally, the value KPIs are providing is increased exponentially. Frankly speaking, the approach reflects a real game-changer regarding awareness and smart insights in real-time.