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Ph.D. M. Tatalović M.Sc. I. Mišetić B.Sc. I. Malović Beganović PRODUCTIVITY OPTIMIZATION OF AN AIRLINE ICRAT 2004

Ph.D. M. Tatalović M.Sc. I. Mišetić B.Sc. I. Malović Beganović PRODUCTIVITY OPTIMIZATION OF AN AIRLINE ICRAT 2004. November 22-24, Zilina, SLOVAKIA. 1. INTRODUCTION 1.1. IMPORTANCE OF PRODUCTIVITY 1926 SCHEDULED PAX 120 000

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Ph.D. M. Tatalović M.Sc. I. Mišetić B.Sc. I. Malović Beganović PRODUCTIVITY OPTIMIZATION OF AN AIRLINE ICRAT 2004

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  1. Ph.D. M. Tatalović M.Sc. I. Mišetić B.Sc. I. Malović Beganović PRODUCTIVITY OPTIMIZATION OF AN AIRLINE ICRAT 2004. November 22-24, Zilina, SLOVAKIA

  2. 1. INTRODUCTION 1.1. IMPORTANCE OF PRODUCTIVITY 1926 SCHEDULED PAX 120 000 2000 SCHEDULED PAX 1 600 000 000 1.2. CONCLUSION – PRODUCTIVITY IS WORLDWIDE PHENOMENA 2/15

  3. 2. DEFINITION AND PRODUCTIVITY FORMS 2.1. Q = QUANTITY OF PRODUCTS (SERVICES)-OUTPUT R = INVESTED INPUT (WORK; MEANS & SUBJECT OF WORK) 2.2. FORMS 2.2.1. NATURAL (QUANTITATIVE) 2.2.2. ECONOMICAL (FINANCIAL) 2.3. AIR TRANSPORT FORMS 2.3.1. PRODUCTIVITY OF AIRCRAFT 2.3.2. PRODUCTIVITY OF EMPLOYEES 2.3.3. PRODUCTIVITY OF FUEL 3/15

  4. 3. AIR TRAFFIC PRODUCTIVITY 3.1. HISTORY DATA 1931-2001 3.2. PHASES ACCELERATION 77% EXPANSION 100% PROGRESSION 30% DYNAMICS 15% MATURATION 6-7% SATURATIONS 4-5% 4/15

  5. 4. BASIC PRODUCTIVITY INDICATORS OF AN AIRLINE 4.1. AIRCRAFT PRODUCTIVITY 9 INDICATORS (PLF, WLF, UTILIZATION) 4.2. EMPLOYEE PRODUCTIVITY 11 INDICATORS ATKm/empl, RTKm/empl., RPKm/empl., ASKm/empl., Pax/empl. 4.3. PRODUCTIVITY OF FUEL 5 INDICATORS (RTKm/fuel consumption, cost index) 4.4. ECONOMIC PRODUCTIVITY INDICATOR (23+…) 5/15

  6. 5. TOTAL FACTOR PRODUCTIVITY (TFP) MODEL • 5.1. TRADITIONAL INDICATORS (FLEET, EMPLOYEE, FUEL, ECONOMIC) • 5.2. ADDITIONAL INDICATORS • 5.2.1. OVERBOOKING (USA) • 5.2.2. CAPITAL VALUE INDICATORS (GB Cranfield University) • - CABIN CONFIGURATION • - SISTER COMPANIES, CSA, IN HOUSE INVESTMENTS IN PROFIT CENTRES • DIFFERENT WEIGHT CRITERIA • RESULTS: DOMINATION OF ASIAN AIRLINES (SINGAPORE, THAI, CATHAY, JAL VS EUROPEAN (LH, AF, BA, KLM) AND AMERICAN (UA, AA, DE, NW) • 5.2.3. QUALITY (PUNCTUALITY, LOSTBAGGAGE) • 5.2.4.PASSENGER SATISFACTION (COMPLAINTS) 6/15

  7. 6. FUTURE TREND OF AIRLINE PRODUCTIVITY 6.1. INFRASTRUCTURE LIMITATIONS OF AIRPORTS 6.2. AIRSPACE CONGESTIONS 6.3. INCREASING ENVIRONMENTAL DEMANDS 6.4. LIMITED INVESTMENT POSSIBILITIES 6.5. INCREASING SAFETY AND SECURITY DEMANDS FORECASTING MODEL (PAX, CARGO)…GDP &YIELD AVERAGE FLIGHT DISTANCE 0,26% BLOCK SPEED 0,07% AIRCRAFT UTILIZATION 0,32% PLF 0,22% 7/15

  8. 7. TFP MODEL FOR CROATIA AIRLINES 7.1. 10 ELEMENTS OF TFP (WLF, PLF, UTILIZATION (BH), TKm/e, ATKm/e, PKm/e, ASKm/e, TKm/fuel, GDP per capita, Yield, Punctuality, Lost Baggage) 7.2. Structure – 67% Natural productivity indicators 17% Economics productivity indicators 16% Indirect productivity indicators With different specific value of the elements (4 categories) 7.3. Model divided in two phases: 1. 2002-2008 2. 2008-2014 7.4. Starting position and trends 7.5. RESULTS 7.5.1. AIRCRAFT PRODUCTIVITY -10/15% 7.5.2. EMPLOYEE PRODUCTIVITY -25/30% 7.5.3. FUEL PRODUCTIVITY - 7/10% 8/15

  9. Selected natural and financial results of Croatia Airlines 1991-2002 9/15

  10. 8. CONCLUSIONS 8.1. HYPOTHESIS:  PRODUCTIVITY PROFITABILITY RESULT: NEGATIVE – PEARSON’S CORRELATION COEFFICIENT –0,03 - 0,14 8.2. HYPOTHESIS:  PRODUCTIVITY REVENUE RESULT: POSITIVE PCC = 0,81 – 0,88 8.3. HYPOTHESIS:  PRODUCTIVITY OPERATING RESULT RESULT: MODERATE POSITIVE PCC=0,67-0,74 10/15

  11. BUT, THERE IS MORE…… 1. NUMBER OF EMPLOYEES 2003 (TRL) 1991 AF 71 654 39 469 BA 49 592 47 181 LH 39 634 49 641 LH pax 34 000 (incl. CITY LINE) LH cargo 5 000 LH Technik 16 000 = 0 ?! LH Sky Chefs 35 000 = 0 ?! LH Systems 3 000 = 0 ?! LH Commercial 7 000 = 0 ?! THOMAS COOK 13 000 = 0 ?! 11/15

  12. 2. DEFINITION OF PASSENGERS UP TO THE YEAR 2000 -revenue passengers min 25% of “appropriate” coupon value -INF - OUT -Code-sharing, FF ? AFTER 2000 -pax with AD and ID discount up to 50% OUT -FF YES -Code-sharing ONLY OPERATING CARRIER CROATIA AIRLINES IN 2001 (10 CSA) OLD METHODOLOGY 137 448 pax NEW METHODOLOGY 177 566 pax DIFF. IN METHODOLOGY +40 000 pax 12/15

  13. 3. WEIGHT OF PAX IN TKM IATA WATS STANDARD = 70 kg + 20 kg cargo density = 161 kg/m3 BUT……..17 carriers > 100 kg 32 carriers < 90 kg 1999/2000 LTU = 128,2 kg/pax GBAIRWAY = 122,3 kg/pax BALKAN = 75,4 kg/pax 13/15

  14. 4. VALUE OF DISTANCE LONG RANGE CARRIERS > 2 500 km SHORT RANGE CARRIERS OU = 610 km 14/15

  15. THANK YOU! QUESTIONS & ANSWERS 15/15

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