reading in the future air canada
TRANSCRIPT
Future Performance
Reading In The Future (2)Case Study
83 %
Drive For Excellence
Mohammed Salem AwadhAviation Consultant
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“Excellence is never an accident. It is always the result of high intention, sincere effort, and intelligent execution; it represents the wise choice of many alternatives - choice, not chance, determines your destiny.”
― Aristotle
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Outline 1/2
• Airline Market Segmentation• Key Performance Indicators For Airlines• Errors Vs KPIs• Forecasting – Basic concept of forecasting Model– Forecasting – Trend vs. Seasonality– Model Constrains– Max.& Min Signal Tracking Analysis
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Outline 2/2
• Case Study : ( Air Canada ) • Basic Data Base ( Three years data )• Forecasting
– Traffic 2014– Capacity 2014– Evaluation - Actual vs Forecast– Traffic 2015 – Capacity 2015– Expected Load Factor 2015
• Analysis• Summary
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Airline Market Segmentation
To facilitated business, the business units define by their Market Segments, Air Canada addressing about 5 regions / areas , As , CANADA - domestic, US Transborder, Atlantic, Pacific, Latin America and Caribbean. Defining by two main performance factors, RPM, and ASM.So most of airlines working on a clear objectives and that’s come with clear targets which lead us to set a clear picture of forecasting process. Based on that, our objective is to develop a clear massage for top managements for the key performance figures of the airline, not just to compare month by month approach but to develop the right path ( time series ) in the future to set the right targets which consequently develop K.P. I for the airlines
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K.P.I For Airlines
• Key Performance Figures• Capacity = ASM( available seat miles )
• Traffic = RPM ( revenue passenger miles )
• Load Factor ( LF ) = RPM/ASM
Traffic
Capacity
Targets & KPIs
Load Factor
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K.P.I For Airlines• K. P. I for Lufthansa Group:
Each Airline has its own KPIs policy, ASM , RPM & L/F are main measuring
KPIs for Air Canada
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Errors Vs KPIs
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Errors Vs KPIs
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FORECASTING
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Basic concept of forecasting Model
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Basic concept of forecasting Model
Directional Displacement
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Basic concept of forecasting Model
Evaluation Forecasting
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Forecasting – Trend vs. Seasonality
Trend ForecastingTell us in which direction (Growth) of the historical data, and usually is a long term forecast.Seasonal ForecastingTell us the Seasonal, Cyclic shocks, we used it to define the forecasting Pattern
Trend vs Seasonal ForecastingForecasted Year of TREND
= Sum of 12 forecasted Seasonal Months for same year,
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Model Constrains
Two Main Constrains to get a fair model:
R2 = Coef. Of Determination T. S. = Tracking Signal
R2 > 80%
AND
-4 < T.S.< 4
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Max.& Min Signal Tracking Analysis
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Case Study :
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Basic Data Base ( Three years data: 2012-2014)
• 36 months data files
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ForecastingAir Canada (2014) – Traffic - RPMs– Capacity – ASMs– Load Factor– Evaluation (2014)
Air Canada (2015)– Traffic - RPMs– Capacity – ASMs– Load Factor– Forecast ( 2015)
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Traffic
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Capacity
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Evaluation Actual vs Forecast
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Traffic
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Capacity
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Expected Load Factor -2015
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Analysis – Three Parameters Air Canada Addressing their performance – Traffic : - in terms of Revenue Passengers Miles ( RPMs )– Capacity :- in terms of Available Seat Miles (ASMs)– Load Factor :- it is the outcome of RPM/ASM.– The period of 2014 is forecasted for the propose of evaluation.– The study shows, there is an increase during June- August
period (2015 ) for ASMs, above the forecasted trend model, this is may be due to increase in frequencies, or introducing new fleet, or flying to new destinations.
– The outcomes are fairs with very high Coefficient of Correlations.
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Summary• Most of Investors in Airline Industry are concerned for the
performance factors that’s Traffic and Capacity , RPM ,ASM , and Load Factor. They evaluate them by comparing their values in past according to month by month approach.
• This presentation tilling us the future patterns for these factors, which consequently we can develop and forecast the expected Load Factor.
• This also will help the airline to set their targets, and developed the right KPI policy for measuring airline performance.
• The data is fairly fitted, with a minimum errors.• The results shows that there will be slight increase in ASMs for
2015. which reflects the higher frequencies , or introducing a new fleet or opening new destinations.
• The expected performance for 2015 ( load factor ) = 83 %
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Not Yet"Prediction is very difficult, especially if it's about the future."
-Nils Bohr, Nobel laureate in Physics
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Segment Forecast
There five major traffic segments for Air Canada :• Canada • US – Transborder• Atlantic • Pacific• Latin America & Caribbean
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Traffic - Canada
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Capacity - Canada
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Load Factor – Canada – 83.40 %
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Traffic – US Transborder
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Capacity - US Transborder
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Load Factor – US Transborder – 84.22 %
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Traffic - Atlantic
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Capacity - Atlantic
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Load Factor – Atlantic – 81.11%
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Traffic – Pacific
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Capacity – Pacific
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Load Factor – Pacific - 85.02%
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Traffic - Latin America & Caribbean
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Capacity - Latin America & Caribbean
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Load Factor Latin A. & Caribbean 84.91 %
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Market Segments – Traffic - 2015
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Market Segments – Capacity - 2015
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Results
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Welcome In The Club
Thanks !
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Contact
• Mohammed Salem Awad • Chairman Adviser – Yemenia • Tel: 00967 735222692• Email: [email protected] [email protected]