Your Guide To Airline KPI

The airline industry is over-involved with countless problems and challenges. There are times when airline managers have to drastically cancel a flight, leading to a mob of angry and anxious passengers. Oftentimes, these scenarios lead to the hassle of refunding airplane tickets and sometimes long term wounds, such as a decline in the number of passengers. The challenges vary from small concerns to serious flight security issues. If these are left unnoticed, these could snow ball into a gigantic problem. When managing an airline company, at whatever level or department, thorough planning must be put in place, particularly with the incorporation of a performance management system. It is then a must to understand airline KPI or key performance indicators.KPIs or key performance indicators are essential for an airline company's performance management system. Think of it as bullet for a gun, air for tires, and fuel for car engines. Without these indicators, it is utterly impossible for the managers to review and evaluate how effective the company's strategies are. Moreover, without the indicators, it is also impossible to come up with wise and effective decisions. KPIs are generic: they all look the same and they all apply to most business types. However, there are exceptions for an airline operation. Therefore, the key performance indicators for such organizations must be customized. In general, the indicators for managing performance of airline companies are categorized into four: service indicators, flight operations, customer perspective, and financial perspective.Service indicators are a parameter used in managing performance of airline companies that typically deals with service oriented activities. The primary goal in evaluating these activities is to get a good grasp on how each employee in the service department is doing. Moreover, it will give managers the idea as to how new equipment and facilities improve service and eventually sales. An increase or decrease in number of occupied seats means something and should call for immediate action. The addition of new suppliers and partners may also translate to a healthy service.Flight operations, on the other hand, have something to do with airline operational aspects, such as the number of passengers per flight, the number of flights per day, the number of flights during unpleasant weather, aircraft utilization, and available time for flying. Fewer flights and more passengers would mean an upgrade, replacement, or addition of aircrafts.Customer perspective indicators usually involve passengers in the evaluation process. Most of the time, they are given survey, evaluation, or feedback forms to be filled out. Passengers are asked about their perspective on the way the aircrew handles them, their baggage, their inquiries, flight charges, meals, and even during security inspection. More complaints than praises, of course, should be alarming enough to change or improve any flaw in the service.Financial perspectives, where financial managers are mostly involved, are measures used to know whether funds are allocated and used appropriately. The parameters include fuel costs, profits, expenses, and revenues. A negative bottom line should be a cause for further investigation and immediate action.Service indicators, flight operations, customer perspective and financial perspective -- these are the four crucial airline KPI or key performance indicators that managers should always consider when managing the performance of the company. If there are other concerns that needed to included, then new indicators should be time-bound, reliable, actionable, measurable, and specific.