Airline and Analytics - The Metrics and KPIs

In today’s highly competitive aviation industry, effective tracking of Key Performance Indicators(KPIs) has the capability to help airlines navigate the turbulent market.

Image by Author — Musili Adebayo

As the aviation industry recovered significantly, airlines began to pay more attention to these core metrics that drive reliability, timeliness, safety and excellent customer service through the use of real-time analytical solutions. Effective tracking of these KPIs and leveraging business intelligence tools to generate insights allow airlines to make informed decisions, and monitor the business and operational performance. This has helped propel the aviation industry to a new height where customers’ demands are met. Below are some of the KPIs that are important to track by airlines:

1. On-time Performance(OTP): This is a powerful KPI that airlines use to track their punctuality and reliability. It is a measure of the percentage of flights that depart or arrive within 15 minutes of their scheduled time. It also captures how quickly an airline is able to turn around an aircraft.

OTP = Number of on-time flights/Total number of flights operated*100

2. Load Factor: Aircraft fly all the time, but what percentage of the aircraft seats did passengers sit on? Passenger load factor is a crucial metric that shows how the airline effectively utilizes its seating capacity.

Load Factor= Number of Passengers /Available Seats *100

3. Average Fare: This is the average price passengers pay for their tickets. Airline average fare is driven by their pricing strategy and the need to maximize passenger yield. The amount a passenger will pay for a ticket depends on different factors such as fuel price, length of trip, market competition, etc.

Average Fare= Total Passenger Revenue/Total Number of Passengers

4. Available Seat Miles (ASM): This metric provides insights into an airline’s seating capacity and distance traveled. It can be measured by multiplying the number of available seats by the distance traveled in miles.

Available Seat Miles (ASM) = Available Seats * Distance Traveled in Miles.

5. Cost per Available Seat Miles (CASM): This metric performance captures the total…