How to Reduce Airline Operation Costs Effectively Amidst the COVID19 Pandemic

A net loss of $84.3bn, the worst in history for airlines, has been recorded due to COVID19 pandemic which caused many aviation bodies to suffer from severe cash burn. To keep up with airline operation costs, reducing expenses for labor and fuel became the default option. Charter opportunities for cargoprivate jets, as well as for repatriations were also grabbed without any hesitation. While the mentioned strategies somehow contributed to keeping the economy running and maintaining GDPs across the globe, it has also put the lives of many aviators and other employees in the field at risk. Tahseen Aviation would like to enumerate applicable, effective and feasible ways of reducing airline operation costs that you should consider in planning for short or mid-term measures for each flight without too much compromise, and with an eye on total cost savings.

Protect Your Golden Eggs

We are pretty sure that you are familiar with this fable about a man who had a goose that can lay golden eggs. Because of greed, he killed the goose thinking that he can get more golden eggs. For airline operators, what productive assets do we have that lay ‘golden eggs?’ Definitely, these are the fleet of aircraft, and most importantly, the labor force. Just like what was mentioned in the introductory notes, many operators chose to cut expenses in the labor force and from flight operations to reduce airline operations costs. This leaves the main organizational structure like board members, finance, marketing or sales departments. Apparently, with the office tasks that they already perform, it would be impossible to be the pilot or the crew or mechanic all at the same time. The best solution to protect the golden eggs is to maintain the livelihood of everyone in the aviation industry. This can be done by adapting a partnership with your preferred expert service provider for each sets of operation:

  1. Aircraft cost (Aircraft lease/loan; Parking; Certification)
  2. Fuel and oil cost
  3. Crew (Hotel, meals, EFB and Perdiem Expenses; Salary; Training)
  4. Maintenance (Equipment & tools, Parts, Storage Salary and Training)
  5. Insurance
  6. En-route fees

Ground Operating Cost (30%)

  1. Landing fees (charge per 1000lbs)
  2. Aircraft handling servicing & catering
  3. Terminal charge (per seat)
  4. De-icing facility charge (charge per 1000lbs)
  5. De-icing and anti-ice fluid

System Operating Cost (20%)

  1. Sale and marketing
  2. General Pax Cost
  3. Pax and Cargo Sales Commission
  4. HQ Office Overhead
  5. System/ Programs/ Software
  6. Administration + Management
  7. Computers/Laptops/iPads
  8. Operational Control

When choosing to adapt partnerships for whichever set of airline operations, it will be easier to eliminate unwanted expenses. With Tahseen’s Aviation Consultancy division, you can expect our senior management team with decades of experience in optimizing team structures in airline companies. With our network of suppliers, customers can benefit from Tahseen’s special rates and scale effects. For inquiries, contact Tahseen Aviation Services or request for a callback regarding aviation consultancy.

Other Ways to Maintain Productive Assets:

  1. Aviation Insurance – Just like how a life insurance works, it’s pretty much the same when insuring aviation assets such as aircraft and other aspects. In times of emergency, you can expect something to cover up for unexpected losses.
  2. Remarketing – Through remarketing, you can ask a professional to take care of grounded aircraft that might be sold, auctioned, leased or traded and use the funds for acquiring more efficient jets or use it to cover up for other expenses.

Tahseen has a network of suppliers and customers can benefit from our special rates and scale effects. For inquiries, contact Tahseen Aviation Services or request for a callback regarding aviation consultancy.

Transform Digital Presence

Digital Transformation of Online Presence is about effective marketing and selling of products and services by maximizing available platforms such as websites, emails, mobile apps, social media integration and the likes. Digital transformation paves a clear journey for every particular customer. This also includes offering direct communication channels to the customer, meeting them where they prefer.

Transformation of digital presence is important for it can help you get leads without fearing the risk of acquiring the COVID19. This process allows the company’s essential teams to efficiently work from home as system operations of airline companies strives amidst this pandemic. With this opportunity at hand, activities such as marketing, selling, lead generation, announcements, customer reach, etc. would be swiftly executed at designated touchpoints (website, facebook, instagram, twitter, linkedin, etc.) It can also help a company get to know more about their target markets, which could lead to better customer service. Most of all, it can help reduce in systems operations costs, especially if the most suitable online marketing software is chosen.

Tahseen Aviation has established a digital team that can help in your company’s migration to full digitization. Call or email us for inquiries

Automate Systems

As a company transforms digitally, they would be left with one concern. Who is going to man all the touchpoints simultaneously? This is where automation of systems will be very much handy. The idea is to eliminate manual workflow, opt for remote work and outsourcing of processes, and utilization of online-based systems or cloud-based systems. It is like having a digital robot do the job for you while you sleep. Imagine, when it’s already late in the evening, most customers will naturally surf the web. As an employee, nighttime is usually out-of-the-office. So, if there’s no one to meet the target client at their designated touchpoint(web), a company would definitely lose that potential client. However, if you have automated the system through chatbots so that the web visitor would be entertained, there’s a great chance that a visitor could converted as a lead, eventually generating sales. More leads, more sales, as costs are reduced due to system automations. Other tasks that can be covered by system automations are detection of weather conditions, monitoring of travel restrictions, marketing and sales, check-ins, self-printed boarding pass, ticket booking, security and safety check points, etc. This option is another way of lessening the risk of COVID19 transmission.

Benefits of Automated and Online System Operations

Reduced Airline Operations Cost

More Savings,
Higher Profitability

Less Contagion of COVID19

Faster Operations and Servicing

Better Outlook for Each Operations

Happy and Satisfied Clients, and ACMI

Tahseen Aviation can provide the needed infrastructure, together with our established digital team with proven cloud services and remote collaboration solutions. For inquiries, don’t hesitate to contact our team.

Focus on High Traffic Routes

From the first tip, we learned that when we solve the problem of our customers without vastly expanding the budget, airline operations can surely continue with reduced cost. However, that’s just a small percentage from the overall airline operation costs in one flight. To further reduce airline operation costs, airline operators should also determine and focus on high traffic routes. This strategy allows airline companies to further reduce airline operations costs from the following requirements: landing fees, aircraft handling, servicing and catering, terminal charge, Deicing facility, airport improvement fees, airport slot fees, gate fees, and other factors for flight operations. Focusing on high traffic routes can also allow operators to grab easily other opportunities such as round trips, multiple legs, empty legs, jetpooling, cargo, humanitarian, repatriation, special missions, sports and music, etc., which is more profitable than aircraft being grounded.

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Focus on Passenger’s Needs

With global pandemic lurking for more than 8 months, the number of passengers across the aviation industry dropped significantly, in some routes up to 97% (IATA Chart)! Even though some routes are already open for tourism, this simply doesn’t cover all the losses over the past months of grounded aircraft. Nevertheless, fact remains that people still need to fly because of primary reasons: family reunion and other personal matters (Leisure, vacation, emergency, etc.), business matters (cargo and humanitarian), and government missions (emergency meetings, repatriation, and other important missions). However, many of the passengers are also affected economically. Subsequently, demands such as blankets and pillows, sumptuous meals, comfortable seats and excellent flight attendant services, TV onboard and the likes might be initially skipped or totally omitted by them if they can travel quickly and safely. For the demanding VIPs, First and Business Class travelers, meals can be limited to pre-booked meals, which can reduce meals for short and mid-range flights as the economic advantages not only derive from savings in the purchase of food and beverages itself. Less catering means also less weight and therefore, less fuel consumption. On-the-other-hand, those extra services may be handy for increase in ancillary revenue.

When important matters are covered, it will result to client satisfaction. When clients are satisfied, there may be a possibility for continuous airline operations without expanding the budget vastly. Tahseen Air Charter is well networked in the region and has a good overview of the market, which allows us to strategize and implement effective measures for airline operations. For more information, request for a callback or send us an email.

Cost-Effective and Safe Ways to Fly Passengers this Winter Season

Private Jet Charter

This is the best option for winter escape. Although people think that private jet travel is luxurious, the real advantages of flying by private jet are convenience and flexibility. With private jet travel, you take control of your flight. Furthermore, private jet charter can truly lessen the risk of acquiring unwanted diseases like the coronavirus because touchpoints are lessened from an average of 1,000 touchpoints to an average of 9 touchpoints.

Commercial Charter

Another excellent way to achieve a most awaited winter comeback is through commercial charter. Commercial charter is also as safe and convenient as the private jet charter option, but it is ideal for circumstances such as Corporate Events, Meetings/Conferences, Brand Launches, Team Building Events, Government Missions, Sports and Music events and commercial flights. Commercial charter is affordable but not compromised quality.

With the important matters covered for the clients, there will be satisfaction, which can lead to continuous operation. What’s more interesting here is that, this can be achieved without vastly expanding the budget. Tahseen Air Charter is well networked in the region and has a good overview of the market, which allows us to strategize and implement effectively. For more information, request for a callback or send us an email.

o reduce airline operating costs effectively, it is suggested that aviation bodies should apply the following strategies: For immediate relief in airline operations, short-term solutions are recommended such as focusing on customers’ needs and focusing on high traffic. For mid-term solutions, digital transformation and system automations should be prioritized. Most importantly, it is a must to always protect your company’s golden eggs. It is also highly advised to always establish a benchmark for each flight between the target cost and existing cost to enable adjusting the costs that will lead to savings. If you need guidance on implementing the measures for costs reduction, don’t hesitate to contact Tahseen’s Aviation Consultancy team. Nevertheless, the aviation industry has once again proven its worth, despite the pandemic, as an important player in the economy because of its strong inter-industry linkages with both upstream and downstream sectors. So, carry on and continue to believe in the importance of the aviation industry.

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