Wednesday, 20 May 2009

The secret of successful cost control

The most efficient way to cut costs and improve punctuality is through a well organised system for monitoring causes and cost consequences of operational disruptions. This unexplored potential for improvement in operational and cost efficiency is based on the assumption that disruptions are not just an operational issue – their origins reside in almost every corner of airline organisation, but are often hidden behind the departmental doors. The more executives know about the relational character of disruptions, the more they will be aware of how effective their decisions are in real life and keener to make improvements. Raising the collective awareness about the reasons for discrepancies between plans and reality, and being able to differentiate between the ‘vital few’ and ‘trivial many’ disruption issues, supports the creation of strategies where costs are continuously kept at the lowest possible level. This is the secret of successful airline management. The most successful airlines simplified their operational model so that they can constantly focus on vital information and more easily control the operational and cost side of their business. Their operation is less uncertain, and their punctuality records are second to none.