Airline Revenue - Case Study and Industry Analysis

Airline Revenue – Case StudyAirline Revenue – Case Study and Industry Analysis
Route density determines the size of the aircraft an airline can use
and the frequency with which it can fly a given route. An airline must
fly an airplane of a size that allows competitive unit costs in the
market it serves. The airline must also find enough passengers who
will sit together in it at fares that will pay the total cost of running it.”
- Airline Leader
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Executive Summary
Airlines around the world are facing increased pressures to generate
revenue as communication technology and globalization of business
advances. Competitive advantage will be gained by those who use data
driven solutions for sustainable cost savings and revenue generation.
From big data for yield management to advanced algorithmic predictive
and preventive aircraft maintenance processes, the acquisition and
processing of digital information will be of utmost importance for those
who wish to remain competitive. – F.A.
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Executive Summary
Airline Revenue Optimization
 The classic and most efficient business model holds true for this complex industry
 CUT COSTS and MAXIMIZE REVENUES
 Profitability in the airline business is calculated by “Seat Miles”
 COSTS as CASM (Cost per available Seat Mile)
 REVENUE as RASM (Revenue per Available Seat Mile)
 1 seat flown 1 mile = ASM (Available Seat Mile)
 Technological advances in Data Management for all business streams has given rise
to the global market. Cost cutting and Revenue Optimization opportunities abound for
those industry leaders that are willing to embrace “data driven” technology and apply it
to all aspects of their business.

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Executive Summary
 The Opportunity
 Customer Segmentation through Big Data Analytics will be significant for the
Airline Industry because:
 Different Customers will be willing to pay different prices for using the same
amount of resources (an Available Seat Mile)
 Controlling the availability of resources will be key to maximizing revenue
from passenger travel seat acquisition
 While they are a captive audience, maximizing the ancillary revenue based
on “who” is your customer will be imperative

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Executive Summary
 This industry analysis paper attempts to cover both COST CUTTING and REVENUE
OPTIMIZATION opportunities including:
 Fuel Saving strategy for in flight management and on ground operations
 Fuel Efficiency - Streamline Flight Takeoff and Landing Techniques
 Cabin Configuration
 Ancillary Revenues / Big Data Opportunities
 Passenger loading optimizations
 Aircraft Design for fuel efficiency
 Flight Route optimization

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Executive Summary
 This industry analysis paper attempts to cover both COST CUTTING and REVENUE
OPTIMIZATION opportunities including:
 Fleet Management
 Travel Demand Modeling / Predictive Analytics / Passenger Experience
 Biofuels Case Study
 MRO Management / Cost Savings / SAP Predictive and Preventive Analytics
 Emerging Market Penetration
 New Business Model for Aircraft assets

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Executive Summary
Includes:
 Airline major cost drivers
 Introduction to Rotable Components
 Understanding the Repair Loop
 Supply Chain Value Creation
 Pricing Models and their Application
 Smarter MRO – Deloitte
 RFID Technology – MRO Management
December 2013
 Big Data and MRO – SAP Predictive
and Preventive Analytics
 Aircraft MRO Market Study to 2035 –
STRAIR
 Aviation growth patterns and the MRO
strategy forward
 Commercial Aviation MRO 2020 – IBM
 MRO Survey 2014 – Oliver Wyman
 AHMS – Aircraft Health Management
Systems
Aircraft Rotable Components MRO
 For cost savings opportunities in MRO and Rotables management please visit our presentation research on
our website www.thedataminingcompany.com by clicking image below:

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Available Seat Mile (ASM): The Basic Measure of Capacity
 One seat (empty or filled) flying one mile is an ASM
 A 140-seat MD-80 flying a 500-mile segment creates 70,000 ASMs.
 System ASMs are simply the sum of each of these individual segment calculations
 In a typical day in 2007; American made available about 465 million ASMs
Revenue Passenger Mile (RPM): The Basic Measure of Production
 A paying passenger flying one mile creates an RPM
 100 passengers flying 500 miles generates 50,000 RPMs
 System RPMs are the sum of this calculation for each of the revenue segments we
fly.
 In a typical day in 2007, American produced 380 million RPMs.
Basic Measurements in the Airline Business
Click for Web Source

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Load Factor: Production Compared to Capacity
 To calculate system-wide load factor, divide RPMs by ASMs; in 2007 it's
138.5 billion RPMs divided by 169.9 billion ASMs, or 81.5 percent.
 For an individual flight, divide the revenue passengers on board by the
aircraft capacity; in the MD-80 example above, it is 100 divided by 140, or
71.4 percent.
 High load factors are not necessarily desirable - How much each passenger
pays is also important, as we see in the next measure.

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A prime example of Airline Revenue Optimization
 It’s not necessarily the maximizing of Load Capacity, but the
optimization of how much value (yield) you can obtain per seat mile
flown as illustrated in this example:

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Yield: Revenue per Passenger Mile
 To calculate system yield, divide passenger revenue by total RPMs; For American in
2007, this is $18.2 billion divided by 138.5 billion RPMs, or 13.1 cents per mile.
 To calculate a customer's individual yield, divide ticket price by mileage; if a
customer pays $98.00 for the 500-mile segment above, the yield would be 19.6
cents per mile.
Revenue per Available Seat Mile (R/ASM): The Best Basic Measure
 Multiply load factor times yield to get the measure of how much revenue we
generate per increment of capacity; using the 2007 example above, it's 81.5
percent times 13.1 cents or 10.7 cents.

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Cost per Available Seat Mile (C/ASM): The Basic Measure Of Cost
 Unit costs represent how much it costs to fly one seat (empty or filled)
one-mile.
 To calculate unit costs, divide total operating expenses by Total ASM
capacity; For American in 2007, this is $19.24 billion divided by 169.9
billion, or 11.3 cents per mile.

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Airline I.O.C. Indirect Operating Costs
Aircraft Ground Handling
Landing Fees
Aircraft Service
Cabin Attendants
Food and Beverage
Passenger Handling
Reservations and Sales
Baggage Cargo Handling
Passenger Commissions
Passenger Advertising
Cargo Commission
General and Administration

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Airline Productivity Measures
Click for Full Report

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Aircraft Design – Cabin Configuration
Decision making in design is crucial to arriving at viable and
worthwhile cabin formats. Too little innovation will result in an
aircraft manufacturer and airlines using its products falling behind
its competitors. Too much may result in an over-extension with, for
example, use of immature technologies that do not have the
necessary reliability for a safety critical industry or sufficient value to
justify the development effort. – Science Direct
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Aircraft Seating Configuration Density
The Opportunity
 Big Data has given rise to dynamic customer segmentation, real time airline
bookings through omni channel elements, origin to destination software
development, and fare structures that can be optimized in real time based on
daily, if not minute by minute real time tracking of consumer trends
 Airlines are now able to optimize seating configurations for different cabin
classes, and release the different options in real time as required. They are
also able to withhold premium seating for higher paying customers, and
release open seats as necessary to optimize Revenue per Available Seat
Mile

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Without much fanfare, WestJet Airlines Ltd. has
been quietly rolling out some strategic changes to its
fleet of Boeing 737s in recent weeks, altering the
cabin configuration fairly dramatically to add a new
class of seating, all the while packing in more
travelers in the rest of its planes.

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Report Highlights
 Slimline seats are replacing old bulky seats
 Results in more paying passengers
 Smaller fuel bill with lighter seats
 Additional legroom may allow higher fee per seat

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Aircraft Design – Seating Technology
The BL3530 follows another vital trend; at 10 kilograms per seat, it's lighter
than its predecessors.
"Fuel costs are extremely high these days -- this is just an accepted fact in
the industry. As a result, every kilogram counts," says James Lee, director of
Paperclip Design Limited, an award-winning industrial design studio.
The lightest chair on the market is made by relative newcomer Expliseat, a
French company that has crafted a model made from titanium and composite
materials. It weighs just 4 kilograms. The company estimates the weight
savings could translate into $500,000 of fuel savings per aircraft per year. –
Daisy Carrington for CNN
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Aircraft Seating Configuration Density / Technology
The Opportunity
 Aircraft seating technology has seen huge strides in newer lightweight
materials that will not only save fuel (weight advantage) but also have the
same robustness while taking up less space.
 Airlines may now optimize for weight, class configurations, and passenger
comfort while maintaining best in class gains for fuel savings opportunities
which accounts for a major portion of an airlines budget.

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Aircraft Seating Technology
Click for Website
Seat configuration
squeezes
passengers into 23
inches of pitch

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Click for Web Article

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Step Up, Lie Down, Sit Sideways As Airlines Explore Creative Seating

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Emerging Markets
The Opportunity
 As the Industrial Revolution pushed forward enormous growth in certain
world markets, so will the digital revolution fundamentally change the
dynamics of where people work, live, travel, and spend their income.
 It will be imperative for leading airlines in the worlds current developed
markets to subscribe to and provide travel services to and from the emerging
markets if they want to stay in the travel game.

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Emerging Markets

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Hong Kong is located five hours’ flying time from
half the world’s population. Together with New
York and London it is ranked as a global financial
and business services centre, a lofty perch decided
by its rule of law, independent legal system, well-
educated talent pool, modern infrastructure, low
taxes and light regulation topped off with an “open
for business” culture.
Emerging Markets

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Emerging Markets

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Emerging Markets

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The five largest Middle East carriers generate almost
60% of the region’s ASKs. The region has grown at a
CAGR of 10.9% and expects to produce more than
586.7 billion ASKs in the year ended October 2014.
Emerging Markets

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Emerging Markets

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Emerging Markets

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Emerging Markets

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Emerging Markets

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Aircraft Wing Design
Wingtip vortices are associated with induced drag, an unavoidable
consequence of three-dimensional lift generation. The rotary motion
of the air within the shed wingtip vortices (sometimes described as
a "leakage") reduces the effective angle of attack of the air on the
wing.
The lifting-line theory describes the shedding of trailing vortices as
span-wise changes in lift distribution. For a given wing span and
surface, minimal induced drag is obtained with an elliptical lift
distribution. For a given lift distribution and surface, induced drag is
reduced with increasing aspect ratio. - Wikipedia
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The Opportunity
 Another method of reducing induced drag is the use of winglets, as seen on
most modern airliners. Winglets increase the effective aspect ratio of the
wing, changing the pattern and magnitude of the vorticity in the vortex
pattern. A reduction is achieved in the kinetic energy in the circular air flow,
which reduces the amount of fuel expended to perform work upon the
spinning air. Any drag reduced is a reduction in friction which will reduce the
amount of fuel used during flight.

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Spiroid Wing Tips

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Actively Controlled Wingtips Click for Patent Page

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Flight Dynamics and Operations
Flight and simulation data are expected to show that Tailored
Arrivals could save between 400 and 800 pounds of fuel per flight,
which adds up to more than $100,000 per year per aircraft. Using
less thrust during descent also yields quieter operations and
reduced aircraft emissions, which results in less impact to the
environment on final approach.
“The flights using Tailored Arrival procedures with existing
equipment on our Boeing and Airbus aircraft demonstrated that a
significant gain in operational efficiency is possible,” said Capt.
Murray Warfield, Qantas Airways general manager for Regulatory
and Industry Affairs. “We look forward to widespread
implementation of this capability.” – itravel magazine
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The Opportunity
 The efficiency at which an airlines prime assets (aircraft) move will have a
direct impact on revenue. From aircraft TAT (turn around time), refueling
processes, passenger loading sequences, and flight dynamics and
operations, every aspect of the movement of aircraft is important.
 In the instance of flight dynamics and operations, the stages of flight
including takeoff, departure/climb, cruise, descent, final approach, and
landing must be monitored and efficient to save the airline money and
enhance the customer experience.

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Click for Online Access

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Flight Dynamics
RNP – Required Navigation Performance

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Flight Dynamics

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Flight Dynamics

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Flight Dynamics
PBN – Performance Based Navigation

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Flight Dynamics
PBN – Performance Based Navigation

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Flight Dynamics
CDO – Continuous Descent Operations

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Flight Dynamics

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Flight Dynamics

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Airplane Boarding Procedures – Plane Turn Around Time
Boarding time matters to airlines' bottom lines. Each extra minute a
plane spends at the terminal costs $30, according to an estimate
published in The Economist in 2011. Saving a minute on each flight
could save Delta Air Lines, which operates over 5,000 flights per
day, more than $50m a year. – The Economist
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Airplane Boarding
The Opportunity
 Aircraft are an airlines prime assets. Like consumer goods in a retail store,
the seats in an aircraft need to be moving with passengers in them to
generate revenue. This revenue is referred to as RASM (Revenue per
Available Seat Mile). Hence, aircraft that is idle sitting at the gate during a
turn around while loading passengers is not in prime revenue producing
mode. The faster they load passengers and get the aircraft to fly, the better
they are using their (prime assets) aircraft to generate revenue.

The Study Boarding Methodology
Airplane Boarding

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Scientific Paper on Aircraft Boarding Click for Whitepaper
Airplane Boarding

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Airplane Boarding
“BOARDING a plane takes too long and is often the
most stressful part of a flight. Whenever a new
group is called, there's a mad rush for the gate,
sometimes complete with pushing and shoving. This
has only got worse with the advent of checked-bag
fees.”
Excerpt

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Alternative Fuels
With high fuel costs buffeting airlines around the world, the best
hope for alternative energy for commercial aviation may be on the
horizon. The standards-setting body ASTM International is set to
vote this summer on certification of hydro treated renewable jet
(HRJ) fuel. Tests both in the laboratory and in the air (led by a most
prodigious jet fuel consumer, the U.S. Department of Defense) have
shown that HRJ can be processed from many types of feedstock—
from weedy plants to animal fat—to make a fuel chemically identical
to the crude-oil based kerosene that powers flight today.
National Geographic
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The Opportunity
 Technological advances in the processing of different raw materials with
gasification is giving rise to the production of biofuels derived from other
sources than crude oil.
 One of the airlines major costs is jet fuel. By examining the chemical
composition of new derivative fuels and their performance with exisiting and
new jet engines, airlines may be able to cut significant costs from their
expenses. They may also reduce carbon footprints as some of these fuels
will burn with cleaner emissions.
Alternative Fuel

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Alternative Fuel

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Alternative Fuel

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Alternative Fuel
"Our industry still faces two issues: there isn't enough aviation biofuel to
meet airline demand, and we need to bring the cost down to parity with
petroleum jet fuel," says Jessica Kowal of Boeing's environment
communications team``

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New Business Model for Aircraft Assets
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The Opportunity
 After only about 100 years of technological evolution air travel is becoming,
or will become as available as ground travel modes. Costs are coming down
and more people now have access to air travel than ever before.
 The emergence of new business models for aircraft assets will become more
and more prevalent as the evolution progresses. Luxury air travel is a new
market entrant that is now competing with marine cruise lines for world
travels.
New Business Model

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New Business Model

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Revenue Management
Today’s airline business is evolving into a two-tier industry: global
alliances are reaching worldwide coverage and no-frills carriers are
gaining market share with a low-cost, point-to-point product. Yet
both sides recognize revenue management and pricing as
cornerstones of their commercial strategy. Sophisticated systems
have been designed that optimally support these processes. The
future will bring a closer integration of revenue management and
pricing systems. Imagine the benefit of forecasts that trigger
automatic fare changes, or using price-elasticity models to
maximize revenue automatically on specific segments.
- Lufthansa Systems
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Revenue Management
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The Opportunity
 The deregulation of air travel has given rise to ever increasing competition for
the acquisition of a customers dollar. Advances in communications and the
advent of internet technology make it seamless for a customer to shop for
and book airline travel from the comfort of home.
 Airline revenue management processes need to take advantage of
technology to make certain their perishable aircraft seat miles inventory are
producing as much revenue as possible. Once the main passenger door is
closed and the aircraft lifts off, all empty seats become lost revenue.

Revenue Management
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A prime example of Airline Revenue Optimization
 It’s not necessarily the maximizing of Load Capacity, but the
optimization of how much value (yield) you can obtain per seat mile
flown as illustrated in this example:

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Revenue Management

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Revenue Management

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“Over the last thirty years, a large number of airlines have invested heavily in traditional revenue
management solutions while ignoring the possibly greater return on investment offered by revenue
integrity solutions. Revenue leakage – the gap between the revenue that airlines book and the
amount that they eventually receive - is a significant problem. Preventing it is especially important
during periods of traffic downturn. It does not make sense to ignore the problem as so many airlines
have done for so long.”
Revenue Management
Excerpt

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Click for Full Article
“Airline ticket prices often seem like a brain-teaser with little
logic. From Chicago, a flight to Miami is more than twice as
far as a flight to Memphis, but the shorter Memphis flight
costs 25% more on average. Fly to Washington, D.C., from
Hartford, Conn., and the average fare is nearly three times
as high as if you flew to nearby Baltimore from Hartford,
according to government data for the first quarter of this
year.”
Revenue Management
Excerpt

How Airlines set prices, parameters
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Revenue Management

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Revenue Management

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Revenue Management

Airline Profitability hovers at an average of 0.1%
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Click for Full Article
The Middle Seat asked US Airways and consulting firm
Oliver Wyman to crunch airline expenses down to the
percentages that an individual passenger pays, taking a
hard look at costs of running an airline. US Airways created
a hypothetical flight of 100 passengers. Each one paid the
average $146 fare for a domestic flight ($292 round-trip),
plus $18 each in fees and add-ons, based on a year's worth
of data ending March 31. The bottom line: There is very
little wiggle room on the plane for profit.
Revenue Management

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“This article identifies major milestones in the science of Pricing and Revenue
Management. It starts with the first successes in travel and transportation, and it
follows the progression of the discipline in those realms. It explores breakthroughs
as the concepts evolved beyond airlines and other industries with perishable
products. It examines the impact on traditional Pricing and Revenue Management
thinking, as the adaptation of these concepts to diverse industries has
necessitated strategic and tactical innovations to optimally manage discount,
promotions, bulk and negotiated deals as well as customer retention. Finally, it
suggests future milestones as the science continues to grow and evolve.”
Click for Online Article
Revenue Management
Excerpt

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“Preparing bespoke solutions for larger airlines can take time. Amadeus’
designers recently signed a large contract to deliver a personalised
system for one of its customers within the next 18 months. But it is
worth the wait for the bigger airlines. An effective revenue management
system can make a huge financial difference. One of Amadeus’ clients
is the US$18 billion dollar company Air France-KLM. If the Amadeus
system increases revenue by 1 percent, it adds US$180 million dollars
onto the company’s bottom line.”
Revenue Management
Excerpt

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“Using publically-available seat map and pricing data from a major U.S.
airline, Garrow shows that customers' purchases of premium coach
seats (with extra legroom and early boarding privileges) are strongly
influenced by seat map displays. She finds that customers avoid
seating in middle seats and seats near the back of the plane by
purchasing premium coach seats. In fact, customers are between 2
and 3.3 times more likely to purchase premium coach seats when there
are no window or aisle seats that can be reserved for free. She uses
these results to show that if this major U.S. airline were to block certain
rows of seats for premier customers, the airline could sell more
premium coach seats and potentially increase seat revenues by more
than 10 percent. “
Revenue Management
Excerpt

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http://garrowlab.ce.gatech.edu/research
http://garrowlab.ce.gatech.edu/pubs
Revenue Management

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Technology - Flight Operations – Flight Efficiency Services
With the international commercial airline industry experiencing growth 2-3 times
faster than the global economy over the last decade, the potential scale of the
application of the Industrial Internet to the sector is huge and growing. This is
something that GE and Alitalia are well aware of as they look to extend their initial
three year partnership beyond 2014. – GE and Alitalia Case Study
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Flight Operations Technology
Flight Sequencing Technology
The Opportunity
 Advances in technology and the prevalence of Industrial Internet data are
giving way to enhanced diagnostics in real time tracking for aircraft
sequencing to optimize approach, arrival, and departure flows.
 "GE's Flight Efficiency Services collects real-time data generated by the
aircraft and applies proprietary techniques that use historic intelligence to
help drive airlines' business strategies," said Alan Caslavka, president of
Avionics & Digital Systems for GE Aviation. "Aircraft performance analytics
are used to reveal patterns, transforming data into actionable insights that
improve operations."

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“The aviation sector is a perfect setting for the Industrial Internet. The
industry estimates that during any given flight, the travel time, fuel
use, and flight path are 18 to 22 per-cent inefficient. Potential costs
savings are therefore substantial, with the recent GE Minds and
Machines report estimating that a 1 per cent reduction in jet fuel use
alone could save $30 billion over 15 years.”
Excerpt
Click for Online Case Study
GE / Alitalia

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Flight Sequencing Technology
Advantages and Benefits
 Navigation Services - Coordinate air travel flow
 Fuel Management - Cut costs (Fuel, Aircraft turn around time)
 Flight Data Analytics - Eliminate inefficient use of resources
 Reduce flight time / Increase departure and arrival accuracy
 Make effficent use of open landing slots
 Fleet Synchronization - Increase aircraft utilization

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Using Wind to Save Fuel
The Opportunity
 A subscription based service from an aircraft OEM uses existing aircraft
equipment (minimal upfront costs) to provide flight crews with real time
atmospheric conditions related to wind speed, wind direction and air
temperature to enhance and optimize the landing approach sequence for
efficient use of fuel resources.

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Using Wind to Save Fuel
Advantages and Benefits
 Reduces fuel consumption by up to hundreds of pounds per flight
 Increase Operational Efficiency
 Stabilizes Approach
 Reduce Carbon emissions
 Reduces Crew Workload
 Optimized approach reduces noise pollution
 Subscription based service
 Uses existing equipment

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Big Data – The Industrial Internet

Analytics and Crowdsourcing
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Advanced Analytics for Flight Optimization
The Opportunity
 Big Data and Data Scientists come together on a crowdsourcing platform
called Kaggle. Using historical flight information including weather, flight
plans, air traffic control, and past flight performance they create algorithms
that will optimize the future of flight for accurately predicting when a flight will
land and arrive at the gate.

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Click for Web Page

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The realized cost savings
Click for Web Page

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Big Data Opportunities in Airline and Aviation

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Big Data Opportunities in Airline and Aviation Click for Full Report

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Big Data Opportunities in Airline and Aviation

Big Data – Predictive Analytics
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Predictive Analytics for Airline Operations Optimization
Click for Web Report

Big Data – Predictive Analytics
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Predictive Analytics for Airline Operations Optimization
Click for Web Report

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Aircraft Route / Flight Planning
Flight planning is the process of producing a flight plan to describe
a proposed aircraft flight. It involves two safety-critical aspects: fuel
calculation, to ensure that the aircraft can safely reach the
destination, and compliance with air traffic control requirements, to
minimise the risk of mid-air collision. In addition, flight planners
normally wish to minimise flight cost by appropriate choice of route,
height, and speed, and by loading the minimum necessary fuel on
board. - Wikipedia
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Route / Flight Planning / Airspace Efficiency
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The Opportunity
 “Every commercial airline flight begins with a flight plan. Over time, small
adjustments to each flight plan can add up to substantial savings across a
fleet. Optimal overall performance is influenced by many factors, including
dynamic route optimization, accurate flight plans, optimal use of redispatch,
and dynamic airborne replanning. While all airlines use computerized flight
planning systems, investing in a higher-end system — and in the effort to use
it to its full capability — has significant impact on both profitability and the
environment.” – BOEING Aero

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European Airspace Example
RVAS from 2000ft to 1000ft
Shorten Aircraft Routes to save fuel and cut CO2 emissions
Route Planning / Airspace Efficiency

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European Airspace Example
RVAS from 2000ft to 1000ft
Shorten Aircraft Routes to save fuel and cut CO2 emissions
Route Planning / Airspace Efficiency

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Fuel Efficiency
A plane like a Boeing 747 uses approximately 1 gallon of fuel (about 4 liters) every
second. Over the course of a 10-hour flight, it might burn 36,000 gallons (150,000 liters).
According to Boeing's Web site, the 747 burns approximately 5 gallons of fuel per mile
(12 liters per kilometer).
This sounds like a tremendously poor miles-per-gallon rating! But consider that a 747
can carry as many as 568 people. Let's call it 500 people to take into account the fact
that not all seats on most flights are occupied. A 747 is transporting 500 people 1 mile
using 5 gallons of fuel. That means the plane is burning 0.01 gallons per person per mile.
In other words, the plane is getting 100 miles per gallon per person! The typical car gets
about 25 miles per gallon, so the 747 is much better than a car carrying one person, and
compares favorably even if there are four people in the car. Not bad when you consider
that the 747 is flying at 550 miles per hour (900 km/h)! – HowStuffWorks.com
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Click to Take the Online Fuel Quiz
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Fuel Efficiency – Online Flights and Fuel Quiz

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Fuel Efficiency

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Fuel Efficiency – Nanoparticle Technology
“A recent innovation developed at University West, Sweden,
promises to increase aircraft turbojet fuel efficiency, simply by
adding a nanoparticle coating to an existing engine design.
Turbojets already operate at very high temperatures, one key to
their current efficiency and power ratings. Still, internal temperatures
can only be permitted to go to a certain threshold, above which the
engine itself would start to melt. The turbojet’s fuel efficiency is
almost directly related to its internal temperatures, so the
nanoparticle coating would allow for more efficient fuel vaporization
and higher air-fuel ratios.”
Excerpt

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Fuel Efficiency – 3D Printing and Composite

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Fuel Efficiency

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Technologies being Explored
 Geared Turbofan Engine
 Composite Ceramics
 The “Double Bubble” - Aircraft Design
 The Flying Wing – Aircraft Design
 High Speed Heat Exchanger
Fuel Efficiency – Five Technologies

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Incorporation of composite materials in Aircraft Design
Fuel Efficiency – Weight Savings
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Engine Technology Advancements
Fuel Efficiency – Engine Technology
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Engine Technology Advancements
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Engine Technology Advancements – Big Data / Sensors in Jet Engines
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Reduce Weight of onboard equipment and supplies
Fuel Efficiency – Weight Reduction
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Fuel Efficiency – Flight Operations
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Reduce Weight of onboard equipment and supplies
Fuel Efficiency – Weight Reduction
C

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Fuel Efficiency – Strategies
C
1. Add weight where it counts
2. Add zonal dryers to remove trapped moisture
3. Engine Wash

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Fleet Optimization
Fleet management is the management of a company's transportation fleet.
Fleet management includes commercial motor vehicles such as cars, aircraft
(planes, helicopters etc.), ships, vans and trucks, as well as rail cars. Fleet
(vehicle) management can include a range of functions, such as vehicle
financing, vehicle maintenance, vehicle telematics (tracking and diagnostics),
driver management, speed management, fuel management and health and
safety management. Fleet Management is a function which allows companies
which rely on transportation in business to remove or minimize the risks
associated with vehicle investment, improving efficiency, productivity and
reducing their overall transportation and staff costs, providing 100% compliance
with government legislation (duty of care) and many more. These functions can
be dealt with by either an in-house fleet-management department or an
outsourced fleet-management provider. – Wikipedia
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The Opportunity
 Airlines that have large fleets of varied aircraft types are at a disadvantage
for cost optimization when they are compared to airlines with homogeneous
type aircraft fleets. From a cost standpoint, varied fleets will incur higher
costs when it comes to crew training and management, maintenance (both
heavy and MRO), and airport fees and restrictions. Those with a less varied
fleet will be able to rotate crews more effectively. They will also have the
opportunity of holding less varied rotable inventories for MRO operations.
Fleet Optimization

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Fleet Optimization
C

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Fleet Optimization
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Fleet Optimization
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Ancillary Revenue
With airlines and airports increasingly modelling themselves on retailers, shopping
has become an even more embedded part of the air travel experience. Creative
solutions developer Avanade is making exciting advances in next generation retail
with the development of its Grab and Go wall concept which, in the future, could
revolutionise retail both on the ground and in the air. The Grab and Go interactive
kiosk, responds to gestures and touch-based interfaces to allow a customer to
obtain information and coupons, and, though still in the early stages of
implementation, it could enrich the shopping experience in the air from the ground,
with enticing offers at kiosks in the terminal. - Future Travel Experience
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C
The Opportunity
 The origin and destination of a flight is just like a retail store. It's like the walls
and shelves of a store, it sits there empty until the airline adds its branding to
it. With in flight connectivity gaining acceptance customers may now interact
with their own devices or seatback screen technologies to enhance
purchasing and customization experiences. Airlines may now partner with
other consumer goods product vendors so they may capitalize on a captive
market that is sitting in the aircraft for hours at a time.
Ancillary Revenue

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Click for Website
Ancillary Revenue - Technology

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C
Hamburg – Airline passengers of the future can expect their movements to be
tracked, their needs assessed and solutions to arising problems remedied as
they move through every step in their journey, all with the help of technology at
their fingertips.
The ability of airlines to make full use of a passenger’s personal electronic
devices and wired lives for everything from missed sandwich orders to selling
automobiles inflight was part of the reoccurring theme in several opening
conference sessions that marked the beginning of the Aircraft Interiors Expo
and World Travel Catering and Onboard Services Expo whose trade show
doors will open Tuesday to thousands who have gather here for four days of
networking and business.
Ancillary Revenue

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Excerpt
Purpose of the research
In spite of the recent economic downturn, airlines are addressing trends, modernising
existing technologies and adopting more relevant solutions to take their IT portfolios to
the next level. Ancillary revenues are helping to fund this innovation; however, knowing
where and when to invest is no easy task. Travelport conducted this research to:
1. Provide airlines a solidly researched overview of the global PSS and IT landscape
2. Identify current areas of IT spending by airlines, as well associated initiatives,
requirements, projections and trends
3. Help airlines analyse, prioritise and plan current and future IT
investments

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Click for Website
Excerpt
Data Analysis
When you are in the market for aviation based data tools, look no further than
Innovata. We have developed a variety of software and partnerships to make
aviation data meaningful and usable to companies like yours. Simply click on
one of our product offerings below to learn more about how we can help you and
your business.
FlightMaps Analytics: Powered by two powerful and well-respected aviation
databases, FlightMaps is a map-based analytics product that can help you view
historical data, filter current data, select reporting data ranges and so much
more.

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Excerpt
For an industry which practically invented the concept of customer experience as
part of the pre-flight and inflight services (remember United hiring its first
stewardess in 1930s, or the on-board food services, the romance and adventure of
the job) as well as some of the most successful customer loyalty programs (airline
miles being at the forefront), it is quite disheartening to see it struggling for
survival due to runaway oil prices and employee unions.

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Ancillary Revenue
C
Excerpt
As each airline makes these choices it is critical that they are not restricted by or
held hostage to any particular standard or technology and that they can achieve a
multichannel retail experience.
Reacting in real-time to consumer trends and cunning competitor initiatives goes
over and beyond the algorithms designed to plan for seasonal changes, holiday
periods, transitory popular destinations and new routes.
The ability to be even smarter and faster will lead to airlines using different
technologies for different circumstances across a multitude of channels.
Filing fares and modifying ancillary services at speed may require using an API – the
technology that allows data to be transferred using XML-based paths.

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Excerpt
“The blueprint for an airline business has changed dramatically over the past 10
years,” says Mike McGearty, CEO of CarTrawler. “Consumer demand for choice and
convenience of complimentary products has forced the travel industry to reinvent
itself with airlines leading the way. Consumers are more loyal to carriers that address
their needs.

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C

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Ancillary Revenue
C

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Ancillary Revenue
C

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Ancillary Revenue
C
The project examined the disclosed financial performance of 108 airlines and the
estimate includes revenue from unbundled services, such as baggage fees and
food sold onboard aircraft, to new incremental income, such as ommissions from
the sale of accommodation and travel insurance, plus partner revenue generated
by frequent flier programs.
The airline that collected the most ancillary revenue in dollar totals was the
country’s largest airline, United Continental, with $5,047,477,000 last year. It was
followed by next largest airline Delta, which raked in $2,473,469,000.
Excerpt

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Ancillary Revenue
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Ancillary Revenue
C
Click for Web ArticleRetailing trends in the airline travel industry

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Ancillary Revenue
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Ancillary Revenue
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Click for Website

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C
Click for Website

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C
Click for Website
Excerpt
“Know your customer” is one of the most important tenets of the travel and
hospitality industries, but getting the right combination of data points about me to
the right people at the right time to give me what I want has eluded travel
companies—until now. Today, new technology is enabling the industry to gain a
more holistic view of its customers and consistently and affordably deliver highly
individualized customer service.

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Ancillary Revenue
C
DMOs now have the ability to provide customized content to travelers,
targeted by location, to an audience who’s got the time to listen. This
means that destinations seeking to convince a business traveler to
include leisure experiences to his itinerary or even extend her trip for
leisure purposes can motivate and convert interest all from the confines
of a seat-back entertainment system. Destinations seeking to augment
dispersal can promote travel experiences beyond a city’s iconic
attractions, wooing vacationers to venture further afield.
Excerpt

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Excerpt
The great advances in airplane Internet connections are being driven far
more by the opportunities that high-speed broadband service presents for
airlines themselves to essentially sell more things to the customers,
whether the product is in-flight entertainment, food and drink, customized
services to elite-status passengers or products at the destination, including
hotel packages, sports and concert tickets, restaurant and theater
reservations. On an airplane, you have a captive market, and with
sophisticated technology, you can sell to passengers in very personal
ways.

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Mobile Technology in the Travel Industry
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Executive Summary
Includes:
 Airline major cost drivers
 Introduction to Rotable Components
 Understanding the Repair Loop
 Supply Chain Value Creation
 Pricing Models and their Application
 Smarter MRO – Deloitte
 RFID Technology – MRO Management
December 2013
 Big Data and MRO – SAP Predictive
and Preventive Analytics
 Aircraft MRO Market Study to 2035 –
STRAIR
 Aviation growth patterns and the MRO
strategy forward
 Commercial Aviation MRO 2020 – IBM
 MRO Survey 2014 – Oliver Wyman
 AHMS – Aircraft Health Management
Systems
Aircraft Rotable Components MRO
 For cost savings opportunities in MRO and Rotables management please visit our presentation research on
our website www.thedataminingcompany.com by clicking image below:

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The Future of Flight – Picture Showcase
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Airline Revenue – Case StudyEND
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Airline Revenue - Case Study and Industry Analysis

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