One of the questions I’m asked most during Tea with Me sessions is about important airline KPI tips — especially operations KPIs. What are the essential aspects when setting up airline operations KPIs and what kind of tips do I give to clients?
Although I already wrote some blog posts about this topic, I thought it is time to summarize the essential tips in one single post. Here we go!
Airline KPI Tip #1 — Keep ’em Simple
Let’s start with one of the most essential airline KPI tips — a tip that sounds so easy but is definitely complex.
You can trust me; there is no price for the most complex airline KPI. But still, I’ve seen many airlines that spend hundreds of hours on setting up ultra-complex KPIs. Usually, these KPIs are the ones with titles like “Percentage of flights with first aircraft door open before boarding begin and STA >= ETD-15.” Pretty sure you get the point.
I totally understand the idea of setting up and tracking specific KPIs. And of course, they are required for monitoring sub-process in a dedicated department.
However, when we are talking about KPIs that are available to the entire airline —or at least the operations staff— simplicity is key. Why’s that the case? Because complex airline KPI usually leads to the result that no one pays attention to it because understanding the KPI takes too much time.
On the contrary, I genuinely believe in the power of simplicity. And to get it straight: Setting up a simplified airline KPIs is quite often tougher than a complex one.
Simplicity doesn’t mean to concentrate on “Number of Flights” and OTP only. Simplicity means defining KPIs that represent a specific situation in a form people understand in a split-second.
And by the way: Simplicity is not only about the KPI and its calculation. It is also about the visualization of the KPI. I’ve seen examples where a simple KPIs is visualized in a way no one understands.
KPI Tip #2 — Add New And Kick Outdated KPIs
In fact, there are “Evergreen KPIs” — On-time Performance, Regularity, Seat Load Factor, etc. Evergreen KPIs are the ones that have been relevant for a long time and certainly will be applicable in the future. Of course, Evergreen KPIs should always be part of your KPI dashboard.
Nonetheless, besides Evergreen KPIs, I’m convinced that airlines have to think KPI dashboards more dynamically. That means the shown KPIs shouldn’t be fixed for eternity.
Accordingly, this airline KPI tip motivates airlines to continuously assess their business goals as well as current challenges and derive required KPIs. Probably a different set of KPIs is essential during the busy summer schedule, or overall, airline goals change and need additional or different KPIs.
Unfortunately, I have seen many airlines that set up their KPI dashboards and never touched it again. Result: Nobody paid attention to static content bores us. Keep it dynamic, add new KPIs, try KPI, and see if they are essential.
Airline KPI Tip #3 — Context Is The Name Of The Game
Context is the essential ingredient that makes your KPIs interesting and drives curiosity of the audience.
Therefore, adding context to your KPIs is so super-important — and subsequently an essential airline KPI tip. But what does it mean? Let’s take the on-time performance KPI as an example. There’s nothing wrong with providing the plain figure (e. g. 87.5%). However, since the number doesn’t give any context, it holds minimal value for the audience.
By adding additional context, you enable the audience to understand and assess the KPI much more in detail. In our example, you could provide context with the following, additional figures:
- OTP average (for last seven days, last month, etc.)
- Target OTP
- Yesterday’s OTP
- The industry benchmark, competitor benchmark
- OTP of the previous hour
Of course, you don’t need to provide/show all of these values. But adding one or two values from the above list will enable the audience to assess the current OTP quickly.
And by the way: A minimalistic usage of colors (green, orange, red) can be another straight-forward option for providing context.
Tip #4 — Real-Time Counts
I’ve talked about this so much, yet it is still so extremely relevant. Airline operations are a super-time critical business. Subsequently, it is of great importance to providing real-time airline KPIs. This doesn’t mean that you should focus on real-time airline KPIs only, but they have to be a prominent part of your KPIs.
Additionally, in today’s world, no one wants to wait for hours or even days/weeks for updated numbers. We are used to living in a “real-time world.” Therefore, from my point of view, providing real-time airline KPIs isn’t an option but a must.
Airline KPI Tip #5 — It Stands And Falls With The Right Channels
My last airline KPI tip usually surprises because it isn’t directly related to the KPI itself. However, most of the airline operations KPI projects that failed are not associated with KPIs themselves. On the contrary, I believe that airlines spend too much time thinking (and even overthinking) KPIs BUT forget to think about the distribution channels.
You may say “distribution channels” sounds like doing sales. And yes, you are exactly right. Similar to a sales process, you have to define your target group, your audience. Who are the once supposed to “consume” the KPIs, and what is the channel that fits their needs? Are we talking about mobile solutions or huge TV screens? Customized dashboards or one-size-fits-all? Accessible from at home or only in the headquarter? (This list is endless).
It is vital to answer these questions — otherwise, you don’t have to follow any of the airline KPI tips above since it ‘d be a waste of time. Unfortunately, and as mentioned above, airline tends to spend too much time defining the very, very details of KPI instead of discussing how to reach the audience.