OM in Action Today s Speaker: Mr. David Brown Manager, Operations Services Cathay Pacific Airways

Transcription

1 OM in Action 2014 Today s Speaker: Mr. David Brown Manager, Operations Services Cathay Pacific Airways Topic & Issues: Cathay Pacific: Operations Management in Action Airlines are constantly striving to maximize profits in a highly competitive environment. However, effective management of the business is extremely complex because decisions often have to be made in an environment that is acutely affected by temporal, spatial, and conditional factors that greatly affect realtime, economic decision making. This talk takes a look at the various behind-the-scene aspects of managing the business where operations management techniques can be employed effectively. This presentation is brought to you by the BBA-OM program.

2 Mr. David Brown Career About 20 years in airline flight operations management and control Currently Manager of Operations Services at Cathay Pacific, responsible for flight planning and navigation, flight dispatch, and operations engineering Academic Background MTech Knowledge Engineering, National University of Singapore MBA (Finance), San Francisco State University BSc Marketing, Golden Gate University, San Francisco

3 Operations Management in Action

4 Overview The Airline Business Fleet Planning Resource Scheduling Yield & Inventory Management Ground Operations Flight Operations

5 Key Financial Performance Indicators ATK - Available Tonnes Kilometers RTK - Revenue Tonnes Kilometers a measure of capacity a measure of production Income Revenues RTK Expenses ATK RTK ATK ATK Profit Yield Load Factor Cost Production compared to capacity

6 Transportation Network Hub & Spoke Operation

7 Range of Modern commercial Jets A320 (3,700 km) A (11,300 km) B ER (14,490 km)

8 Service Supply Chain Purchasing the most cost-effective aircraft for the network Match capacity with demand to optimize yield Minimize turn time by effective coordination of multiple tasks Efficient collection of data for analysis & performance measurement Fleet Planning Flight Scheduling Sales & Reservation Passenger Acceptance Pre-Flight Preparation Flight Operation Post-Flight Processing Optimize resource utilization Minimize queuing and processing time Minimize operating cost without compromising safety and security standards

9 Fleet Planning Long Term Planning Buying The Right Aircraft for the Network Structure Medium-Short Term Planning Optimize Utilization of Aircraft to Flights Optimize Assignment of Capacity to Demand

10 Payload vs. Range Payload Zero Fuel Weight (ZFW) Take-Off Weight (TOW) Max Fuel Tank Capacity (MTC) Range

11 Resource Scheduling Aircraft 1 Aircraft : :03 HKG 02: :55 NRT 06: :00 TPE 451 HKG HKG 06:00 HKG 11: Aircraft MEL +00:05 +00:16 02: :30 HKG 408 TPE Aircraft : :00 HKG HKG 09: Aircraft 5 D Check Maintenance Aircraft 6-00: :00 CDG 261 MAN MAN 261 CDG 12:30 Aircraft 7 01:00 #2 ENG HI N2 VIBS. MADD :15 HKG 07: :35 BKK BKK 11: :35 HKG Aircraft 8 00: :20 LHR 07:00 4A1 & A Aircraft 9 HKG 450 TPE 04: :45 NRT 08: :45 HKG Aircraft : :00 HKG HKG TPE HKG Aircraft 11 HKG SEL SEL HKG 02: :40 08: :35 Aircraft : :05 LHR Film Shoot for BBC

12 Yield & Inventory Management Pricing Model Demand Driven Dispatch Sales d - 90 Schedule d -7 Schedule d 0 inventory = demand demand > inventory demand < inventory demand = inventory Match demand to inventory Revenue Cost

13 Arrival Ground Operations Turn Time Departure Passenger Deplaning Catering Offload Toilet Servicing Cabin Cleaning Crew Boarding Catering Uplift Security Check Passenger Boarding Cargo/Bag Offload Cargo/Bag Uplift Door Close Departure Clearance Routine Maintenance Fuelling Pre-Flight Preparation

14 Cost of On-Time Performance OTP Cost Delay Delay OTP 80.9 % 82 % 77.4 % OTP 51.2 % 52.6 % 47.8 % Year Year Within 15 minutes of STD On - the - Dot

15 Customer Processing Time Potential Efficiency = ƒ(degree of customer contact) Single channel, Single phase Multi channel, Single phase Channel number of servers Phase number of steps in the service Multi channel, multi phase

16 Phases of a Flight Cruise Climb Descent & Approach Take-Off Landing

17 Flight Planning

18 HKG Flight Information Region & Airways 24ºN N W E BEKOL S TAMOT MAGOG DOTMI ELATO TAIPEI FIR ENVAR 22ºN SIKOU SIERRA KILOG KAPLI GUANGZHOU FIR NOMAN 20ºN DAGON IDOSI EPDOS DUMOL MANILA FIR SABNO IKELA ENBOK DULOP EPKAL 18ºN SANYA AOR DOSUT 110º E 112º E 114º E 116º E 118º E

19 Routes To & From S.E Asia 24ºN N W E S TAIPEI FIR 22ºN GUANGZHOU FIR 20ºN DAGON IDOSI EPDOS DUMOL MANILA FIR IKELA ENBOK DULOP EPKAL 18ºN SANYA AOR DOSUT 110º E 112º E 114º E 116º E 118º E

20 Wind Plot Chart LAX HKG

21 Basic Element of A Flight Plan Flight Levels Airways SID & STAR Wind Speed & Direction Visibility Fuel Log Fuel Consumption Weather Conditions for Take-Off Routing En-route Winds Destination Weather for Landing Available Alternate Total Fuel Required for Flight Allowable Payload Temperature Head Winds Availability Passengers Air Pressure Tail Winds Visibility Baggage Wind Speed & Direction Wind Speed & Direction Cargo

22 Average Fuel Statistics by Aircraft Type Aircraft Type Average Burn Off / Hour Boeing kgs Boeing ,000 kgs Airbus kgs Airbus kgs

23 Measuring Fuel Mileage FUEL MILEAGE = DISTANCE TRAVELLED FUEL USED FUEL MILEAGE = AIRSPEED FUEL FLOW

24 Developing a Cost Index Fuel Price, Burn Off Crew, Maintenance, Delay, Etc. Fuel Related Cost Time Related Cost

25 Relationship Between Fuel & Time Cost Fuel Cost Time Cost CI CI N.B. Time cost varies from airline to airline

26 Calculating Cost Index How Do We Calculate the Cost Index? COST INDEX = TIME COST FUEL COST Unit of Measure : KG/MIN or 100 LB/HR

27 Managing Goals Business Goals Constraints & Choices Operational Goals

28 Thank You