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Turning around an airline

How to turn around a struggling airline.

1.      Anchor everything you do in the P&L.

2.      Define the business as the results from each flight.

3.      Focus on the airline key areas:

a.      Yield Management: If the average airline fares don’t cover the costs you have to fix yield and/or cabin factor.

b.      Cost control: High costs are linked to low productivity that is linked to too many people. Improve productivity and cut the costs.

c.      Network: Stop flying routes with no commercial sense.

4.      Establish individual P&L for each flight and follow up results by flight and route daily, weekly and monthly.

5.      Build a winning coalition through a transparent P&L to engage stakeholders (owners, unions, customers, staff, partners etc) in the turn around process.

6.      Nominate route profitable managers to drive route improvements.

7.      Do it now: To wait weakens the balance sheet and the airline.

8.      Implement discipline of actions by relentlessly monitoring the results.

9.      Drive out fear. If you do your best it is ok to fail. We all know there are things outside our control (like fuel costs and recessions).

10.   Support the talented people so nobody can kill them in the organization jungle.

11.   Build on internal people by motivation and visible leadership.

12.   Ask for fact based analysis for all decisions and empower people to act.

13.   Ask the board for freedom to act to generate results or do something else.

Aircraft, here a SAS MD80, need like managers clear directions and guidelines when conducting a turn around.

 

Before every long haul flight, here a SAS Airbus 330, careful planning is needed to receive a positive round trip result.

 

Short haul flights in a rough clima, here an Avro from Blue1, needs a Finish sisu for sustainable profitability.

 

Charter flights, here a MD83 from Nordic Airways, need market fexibility as well as low seat costs to be profitable.

 

Regional flights, here a Saab 340 from Nordic Airways, shall be managed continuously to generate profits on lean routes.

 
 
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