Achieving Airline On-time Performance: Graham Howarth Vice President, Transportation Achieving Airline On-time Performance CDM Task Force Meeting 5 12 December 2002 Success Factors


Agenda: Agenda Introduction to AT Kearney European Context Interface Issues — Airline/Airport/ATC Success Factors of Co-operative Initiatives Performance Management Framework Definition of Punctuality and KPIs Root Cause Understanding A Quantified Model Hub Management Tool Co-ordinated Capacity Usage Application to Operational and Planning Issues The Next Level


Introduction to AT Kearney: Introduction to AT Kearney


A.T. Kearney is a global leader in high value management consulting: Europe Johannesburg 2001 Gross Fees Offices Consultants Founded $1.3 B 64 2,700 1926 $ 550 M 24 1,100 1964 North America Worldwide Europe A.T. Kearney is a global leader in high value management consulting Asia Buenos Aires Caracas São Paulo Latin America Africa Amsterdam Barcelona Berlin Brussels Copenhagen Düsseldorf Frankfurt Helsinki Istanbul Lisbon London Madrid Milan Moscow Munich Oslo Paris Prague Rome Stockholm Stuttgart Vienna Warsaw Zürich Bangkok Beijing Hong Kong Jakarta Kuala Lumpur Melbourne New Delhi Seoul Shanghai Singapore Sydney Taipei Tokyo Wellington Alexandria Atlanta Baltimore Cambridge Chicago Cleveland Costa Mesa Dallas Los Angeles Mexico City Miami Minneapolis New York Ottawa Plano Redwood City San Diego San Francisco Santa Clara Southfield Stamford Toronto


Slide5: Our network of functional practices and industry groups enables us to rapidly develop and deploy our know-how and expertise Selected Aviation Clients Aena (Spanish Airports) Aeroflot Aeroporti di Roma Aer Rianta (Irish Airports) Air France Air New Zealand Alitalia Ansett Airlines BAX Global BIAC (Brussels Airport) British Airways British Midland DHL Worldwide Express Federal Express Hapag Havas Jet Tours Kilroy Travel KLM LOT Polish Airlines LTU Lufthansa Airport Authority (Hong Kong) Schiphol Airport AAS SAir Group Sabena TAP Portuguese Airlines TNT Worldwide Express United Airlines UPS US Airways Aerospace & Defence Change Management/ Enterprise Transformation e-Business Strategic Information Technology Strategic Sourcing Finance & Economics Marketing Industries Practices Automotive Energy (Chemical, Oil & Gas) Consumer Goods and Retail Financial Institutions Healthcare & Pharma- ceuitical Communi- cations/ High Tech Transpor- tation Utilities Strategy


Over the last four years, A.T. Kearney has accumulated expertise in the field of punctuality through several European engagements : Over the last four years, A.T. Kearney has accumulated expertise in the field of punctuality through several European engagements For a major European hub airport, airline and ATC, we have successfully run a punctuality improvement project. During this project, we have analyzed the most important, controllable root causes for the low punctuality and have developed new logistics concepts/solutions to overcome these problems. Key in this project was getting the approval and acceptance of all plans and ideas by all stakeholders within the airport community. A.T. Kearney assisted another European hub-airport and its home-carrier in their pursuit of improving punctuality. Using root cause analysis, the chain of events causing delays was examined as to its origins. On this basis, a wide range of actions for improving punctuality was defined. As the main problems in delays were found at the interface level, the measures for improvement overlapped various divisions/organizations. For the same airport and airline, we have developed a new (long-term) logistics concept for handling baggage. The concept comprised infrastructure requirements, systems solutions and an organizational blue print. Finally, A.T. Kearney recently completed a third punctuality-improving project commissioned by an airport, air traffic control and largest home carrier. Together with the three main stakeholders, detailed solutions for airport, airline and ATC were set up and validated in order to tackle the most important root causes for the poor punctuality. A cross-organizational model was set up in order to improve punctuality at the extended-enterprise level, as well as to drive implementation and embed continuous improvement.


European Context: European Context


In Europe, pressure on punctuality performance will return as volumes grow: In Europe, pressure on punctuality performance will return as volumes grow Focus moving to collaborative issues Factors easing pressure Reduced vertical separation New technology developments Eurocontrol programmes Reduced transfer traffic at some hubs Continuing corporate initiatives Factors increasing pressure Returning volumes Quicker turnarounds Tighter scheduling and aircraft utilisation Bigger impact of disruption at big hubs


Factors determining punctuality cut across organisational boundaries: Factors determining punctuality cut across organisational boundaries Process Execution Operational Planning Policies & Capacity Tactical Strategic Passenger Handling Ramp Handling Aircraft Rotation Management Slot Management Performance Management Airline (e.g. flight mix) Airport (e.g. dpt/arr-ratio) Slot coordination (airport-ATC interface) Airline (e.g. boarding) Airport (e.g. security) Airline, handlers (e.g. turnaround) Airport (e.g. parking control) ATC (e.g. pushback interface) Airline (e.g. cabin/cockpit crew) 3rd parties (e.g. maintenance) Airline (e.g. swapping) ATC (e.g. sequencing) Airline (e.g. MCT) Airport (e.g. terminal capacity allocation) Airline, handlers (e.g. resource capacity planning) Airport (e.g. stand planning) Airline (e.g. scheduling) 3rd parties (e.g. maintenance planning) Airline (e.g. flight mix) Airport (e.g. dpt/arr-ratio) Slot coordination (airport-ATC interface) Airline (e.g. gate closing) Airport (e.g. passenger facilities) Airline, handlers (e.g. IT & equipment) Airport (e.g. baggage sorting system) Airline (e.g. spare aircrafts) 3rd parties (e.g. spare parts) Process monitoring Connect/non- connect decisions Disruption management Network control Network steering Priority rules Escalation rules Airspace utilisation Runway utilisation Slot coordination Organisational design Interface management is essential


The “extended enterprise” integrates the views of Airport, Airline(s), and Air Traffic Control: All companies aware of cross organisational interfaces All companies balancing their economic targets in an integrated way Interfacing with other partners (e.g. handlers, AOC, etc.) Cross-organisational teams and decision making (punctuality) Cross-organisational key performance indicators A/port A/line ATC Individual optimisation, often not considering the effect on other stakeholders Little or no cross-organisational communication with respect to decisions with cross-organisational impact The “extended enterprise” integrates the views of Airport, Airline(s), and Air Traffic Control Today: “Individual Company View” Airport Airline(s) ATC Sub-optimal Result Tomorrow: “Extended Enterprise View”


Performance Management Framework: Performance Management Framework


Punctuality management can be set up around five key components: Communication Punctuality Steering Committee Punctuality Performance Committee & Project Management Strategic, Tactical & Operational Improvement Initiatives Governance Punctuality management can be set up around five key components Cross-Organisational Punctuality Steering Committee Actual day-to-day implementation of initiatives Day-to-day monitoring of performance of initiatives Governance Disciplined approach to define, align, steer and execute the initiatives Punctuality review and target setting Decide and review improvement projects Forward looking Communication Necessary communications and feedback to share/stakeholders, top management, line management, entire organization as appropriate Strategic, Tactical & Operational Improvement Initiatives Punctuality analysis Project definition Project prioritisation and planning Day-to-day coordination and tracking of improvement initiatives Punctuality Performance Committee & Project Mgt.


With top-management sponsorship and involvement, the punctuality organisation may well evolve into a wider cross-organisational forum: With top-management sponsorship and involvement, the punctuality organisation may well evolve into a wider cross-organisational forum Expansion to Other Airport- Stakeholders Primary Members Status Ad-hoc Members Use punctuality as a starting point to develop genuine cross-organisational partnership Leverage top management commitment in order to tackle additional items on the airport-wide agenda Expansion to Other Topics Efficient and Effective Airport-Wide Forum for Strategic and/or Operational Topics CDM initiatives


Definition of PunctualityKey Performance Indicators: Definition of Punctuality Key Performance Indicators


An “operationalised” definition of punctuality can be subdivided into hard targets and measures of success: An “operationalised” definition of punctuality can be subdivided into hard targets and measures of success High-Level Diagnostic Punctuality Quantification Model High level punctuality measurements Facilitates understanding the delay accumulation and recovery from gate-to-gate Aimed at achieving operational stability/ excellence along the entire chain Focus on off-blocks punctuality (AEA) Trace back all delayed flights (3’) at off-blocks to primary cause of delay Allow for simulation of punctuality impact of specific improvements Hard Targets Interface Diagnostic Punctuality Process Monitor Operational, lower-level punctuality measures focused on creating transparency in the timeliness of all interfaces between airline, airport & ATC Operational, lower-level punctuality measures focused on creating transparency in the ground handling processes Provides a detailed overview of reliability of (sub-) processes Operational Measures


Key performance indicators need to be set for high-level measurement points: High-level key performance indicators provide initial insight for further analyses Off-Blocks Outstation Touchdown On-Blocks Off-Blocks Take-Off Touchdown Outstation Hub Airport National Airspace National Airspace Foreign Airspace Foreign Airspace Entering National Airspace Leaving National Airspace Outstation Outstation Take-Off Outstation On-Blocks Outstation ATD vs. STD (departure punctuality) ATD vs. STD (departure punctuality) ATA vs. STA (arrival punctuality) ATA vs. STA (arrival punctuality) ATOT vs. RTOT (take-off punctuality) ATOT vs. RTOT (take-off punctuality) ATDT vs. RTDT (touchdown punctuality) ATDT vs. RTDT (touchdown punctuality) 3-Minute Punctuality 3-Minute Punctuality Key performance indicators need to be set for high-level measurement points


Off-block delays remain a useful control focus: Off-block delays remain a useful control focus Trace back all delayed flights (3’) at off-blocks to primary cause of delay Late arrival (on-blocks) Lead time handling Late departure (off-blocks) Identify largest areas for improvement Allow for simulation of punctuality impact of specific improvements Punctuality Quantification Model On-time Arrival (on-blocks) On-time Turnaround On-time Departure (off-blocks) Off-Blocks Outstation Touchdown On-Blocks Off-Blocks Take-Off Touchdown Outstation Hub Airport National Airspace National Airspace Foreign Airspace Foreign Airspace Entering National Airspace Leaving National Airspace Outstation Outstation Take-Off Outstation On-Blocks Outstation Illustrative


Root Cause Insight: Root Cause Insight


The co-operative structure needs common understanding of the root causes of operational problems: The co-operative structure needs common understanding of the root causes of operational problems Inputs Where Are Delays Built Up ? Improvement Estimates & Implications Punctuality Database Observations Interviews & Meetings Reports, Studies & Benchmarks High-level Diagnostic from Gate to Gate Issue Analysis per Process Area 1 2 3 4 A B C Drill-down to Root Causes Í Ì Ë Ê Root Cause Summary X Y Z Capacity Handling Quantification X Y Z X X Theme Ê Theme Ë Theme Ì Theme Í Themes & Areas for Improvement Improvement Potential Quick Actions X X Punctuality improvement Financial implications Scope & Target Setting Schedule Model X X


Punctuality Quantification Model: Punctuality Quantification Model


A commonly-understood model should represent the impact of the delay drivers as accurately as possible: “Delay Code” Model “On-Time” Model “Probability” Model Block time violation Turnaround time violation Check-in Connections De-planing Boarding Security Traffic volumes MCT Delay- Quantification Models Delay Factors Wave structure Gate closing LMC Boarding areas Terminal facilities Resources Technology Gate-allocation Baggage Turnaround Pushback De-icing Interfaces Stand plan Block times and buffers Precision Time Schedule Resources and equipment Baggage facilities Stands and off-pier Cabin Crew Cockpit Crew Maintenance Outstation performance Scheduling Wave pattern Crew rosters Maintenance Fleet and sub-fleets Spare aircraft Sequencing Movement control Landing procedure Take-off procedure Dpt/Arr-ratio Total Airport Schedule Separation Flight mix Aircraft mix Runway capacity Airspace capacity Holding area’s (air/ground) Delay Drivers A commonly-understood model should represent the impact of the delay drivers as accurately as possible


The “Delay Code” Model bases its analysis on “Red Cap” code allocation, avoiding the rotational issues: Delay code IR63 IR93 IR93 IR93 IR93 1 2 3 4 5 IR63 IR41 IR93 IR93 2 4 # A/C (total) 3 6 Delay code # A/C (initial) 1 2 IR 41 IR 63 # A/C (knock-on) A/C #1 A/C #2 The “Delay Code” Model bases its analysis on “Red Cap” code allocation, avoiding the rotational issues Technics IR 41 IR 42 IR 43 IR 44 IR 45 IR 46 IR 47 IR 48 # A/C (knock-on) # A/C (total) #min A/C (initial) #mi (kno Delay Codes Analysis — Example 25 7 2 0 0 3 0 0 66 14 12 0 0 7 0 0 1 12 10 0 0 3 0 0 962 417 95 0 0 169 0 0 # A/C (initial)


Delay codes may not reflect the true drivers of irregularity : Delay codes may not reflect the true drivers of irregularity Evaluation of the Model “Delay Code” Model Underlines easily the main problematic areas (not root causes) with their knock-on effects Fast to implement Can be used as monitoring tool after calibration Advantages Relies on red cap for delay code accuracy Gives an enormous weight on the first wave delays Overestimates Handling and ATC issues while hiding most of scheduling issues Outstation impact Without further information, masks the true delay causes Disadvantages The utilisation of delay codes as such introduces many biases in the analysis


The « On-Time » Model decomposes the different steps of the chain, reporting any deviation from the schedule: Decomposition of the Total Number of Delays (A/C delayed > 3’ at off-blocks) The « On-Time » Model decomposes the different steps of the chain, reporting any deviation from the schedule X1% X2% X3% 100% of Delayed Aircraft at Off-blocks “Step # 1” “Step # 2” Responsibility of step #1 to deliver aircraft on time to handling Responsibility of step #2 to deliver aircraft on time to airport/ATC Responsibility of step #3 to deliver aircraft on time to outstation “Step # 3” (100% = X1+X2+X3)


However, this may also lead to wrong conclusions: “On-Time” Model In its first step, uses simple and generally available data Advantages Evaluation of the Model Further analyses (e.g delay codes, delay sub-drivers) are necessary in order to properly estimate the impact of a “root cause” Used alone (e.g. without high-level delay diagnostic) this analysis can give wrong conclusions Disadvantages For diagnostic purposes, the model is not detailed enough but once a calibration has been done, it can be used as an easy-to-setup monitoring tool A ABC AB B BC C AC Scheduling Handling ATC However, this may also lead to wrong conclusions


The “Probability” Model is a refinement of the “On-Time” Model, based on the redefinition and the reallocation of the delay drivers: Decomposition of the Total Number of Delays (A/C delayed > 3’ at off-blocks) The “Probability” Model is a refinement of the “On-Time” Model, based on the redefinition and the reallocation of the delay drivers % of Delayed Aircraft at Off-blocks X1% 100-X1 %-X2% X3% This method aims at making root-causes within a bar fully independent from each other. We can then estimate the impact of a particular root-cause and improvement initiatives


The decomposition of the number of delayed aircraft into mutually exclusive root causes allows the model to be calibrated…: Decomposition of the Total Number of Delays Among the Main Categories (3-minute Definition) × X1%= 44.0% X2%= 23.3% X3%= 32.7% Maintenance Cargo Baggage Loading Transport Catering Security Passenger Etc. Local Destination En-route Turnaround Issues Block Time Issues TAT & BT Issues Scheduling Handling  Capacity Oustation Non Opt. Config. MCT The decomposition of the number of delayed aircraft into mutually exclusive root causes allows the model to be calibrated… Example Financial and operational impacts of process and operational changes can be predicted and used by the extended organisation ×


Hub Steering Tool: Hub Steering Tool


The Hub Steering Tool implements the logistics concept for ground operations: The Hub Steering Tool implements the logistics concept for ground operations A Logistic Concept for Ground Operations On Time Recoverable Delay Non-Recoverable Delay Too Early ‘Fast-Track’ ‘Capacity Smoothers’ Operations Control Network Manager GOM Flight/Area Managers Connection Manager A Ground Control Organisation Concept for a Hub Steering Tool Implementation of a logistics concept on turnaround operations and process coordination Combined with local radio loops etc Increased process transparency and process control Regular Process Regular Process


Process and A/C punctuality are monitored against defined process time windows and inter-dependencies: Process and A/C punctuality are monitored against defined process time windows and inter-dependencies Process Monitoring Tool Process time window definitions Traffic Light Principle for punctuality alerts Connections Tool


Slide31: Schedule and Airport Capacity


Wave structures can create operational delays resulting from first-wave knock-on: Wave structures can create operational delays resulting from first-wave knock-on


…and also from transition between arrival and departure peaks: ATC Delays for Departures according to Realised Capacity # Mvts Time Arrivals Departures A C B B …and also from transition between arrival and departure peaks Arrivals [#mvts] Departure [#mvts] Arrival Peak Maximum Declared Capacities Arrival Peak Iso 70mvts 1 2 3 A B C Departure Peak


There can be a strategic trade-off between departure capacity and punctuality: Source: Punctuality database, A.T.Kearney Analysis There can be a strategic trade-off between departure capacity and punctuality Departure Delay vs Realized Departure Mvts Punctuality Mode Capacity Mode


Slide35: “Best Practice” guidelines can help to motivate all stakeholders in maximising capacity utilisation Departure sequencing rules Arrival sequencing rules Runway Occupancy Time guidelines and behaviour Cross-wind limitations Start-up clearnance practice Push and hold procedures Last-minute gate changes Phraseology to be used Controller experience/training …and local schedule co-ordination in designated airports


Slide36: Applications


Co-operative understanding and processes can be applied to address a large range of operational and strategic issues: Co-operative understanding and processes can be applied to address a large range of operational and strategic issues Optimum utilisation of CFMU slots Gate allocation Sequencing (Departure and Arrival) Runway occupancy Disruption management Process Execution MCTs Business case assumptions Restricted operation days Slot and schedule co-ordination Planning Infrastructure additions Runways Holding bays Terminals Baggage Declared capacities Policy Element A/line Financial Evaluation A/port ATC Total Operational Evaluation


A co-operative model, at a local level, can help centralised initiatives in airspace utilisation: A co-operative model, at a local level, can help centralised initiatives in airspace utilisation Visibility of gate-to-gate situation at a CFMU level Utilisation of non-operated slots Slot and schedule co-ordination and smoothing True collaborative decision-making


Slide39: Success factors and the “levels” of the CDM programme