Airline On-time Performance

Why is On-time Performance Important to Airlines?

It’s an exciting time of year for FlightStats as we ramp up to announce the winners of our annual Airline On-time Performance Service (OPS) Awards. We recently released our list of “Best of the Best” awards finalists and are currently preparing the full detailed report announcing the winners in each category, which will be published in January 2017.

You might be wondering why we even produce these awards or why on-time performance is important. What does good on-time performance really mean for airlines?

Here are a few ways you can capitalize on your on-time performance and leverage the OTP data we provide:

Build it into your marketing materials

In recent years, it has become more and more clear that achieving better customer satisfaction is about more than airfare discounts and flight availability. When considering an airline, travelers also look for timeliness and assurance. The 2016 Travel Report from American Customer Satisfaction Index (ACSI) listed on-time arrival as one of the major elements of the customer experience that determine satisfaction.

If you have an impressive on-time performance ranking, then you can leverage that information to reassure travelers that you will get them to their destination in a timely manner. On-time performance data is valuable content for your promotional channels, including social media, corporate blogs and advertisements.

Offer on-time performance commitments

In addition to promoting your on-time performance to the general traveler audience, you can also use it to strengthen relationships with corporations and their business travelers. Many airlines have already used their on-time performance ranking to offer service level agreements to corporations that greatly influence purchasing decisions.

For example, both Delta and United have offered an Operational Performance Commitment (OPC) in their corporate contracts, promising to pay corporate customers if they don’t maintain better on-time performance than their competitors. As a result, corporate customers are becoming more loyal because of the effort airlines are making to hold themselves to a higher standard.

So far, Delta has seen positive results with its OPC. According to Delta, they’ve been able to sign new contracts based on their operational reliability and current clients have been raising their spending caps because of the cost savings associated with on-time performance.

Show travelers what your priorities are

If you’re an airline with good on-time performance, then you are most likely scheduling block times–the total amount of time a flight takes from pushing back from the departure gate to arriving at the destination gate–more efficiently on your routes. This says a lot about your priorities.

For example, an airline that schedules a flight block time more conservatively is communicating that they are willing to pay more for flight crews and lower aircraft utilization in exchange for minimizing the impact of disruptions on other flights in the network and achieving better on-time performance.

On the other hand, an airline with poor on-time performance is probably scheduling shorter block times to lower their costs by operating additional flights, carrying more passengers with a single aircraft, and paying less in flight crew costs. This approach is actually less efficient, risks poorer on-time performance and increases the likelihood that delays will impact downline flights that were scheduled to use the same aircraft.

Essentially, excellent on-time performance from an airline means you care more about getting your passengers where they’re going than making as much money off of them as possible.

Make strategic decisions about your codeshare partners

On-time performance data can help you understand the performance of your airline network and your codeshare partners. This is important because when a traveler buys a ticket for your airline but is actually on a flight operated by a partner, they’re still going to blame your airline for delays. It’s critical that you make sure your partner airlines have an on-time arrival ranking that aligns with your expectations, otherwise you’ll risk damaging your own image.

Understand your competitors better

Even the most established businesses still need to regularly rethink their direction in relation to their competition. According to William P. Barnett, a professor of business leadership and strategy at Stanford, pressure from competition causes people to search for ways to improve their company’s performance, which, in turn, makes them stronger competitors.

It’s not only important for you to evaluate your own on-time performance. You should also gain insight into how your competitors are doing. Understanding competitor performance will push you to achieve better goals and determine opportunities in the marketplace.

Feel proud of yourself

Airlines typically calculate their on-time performance based on 15 minutes of the scheduled arrival time. The 15-minute threshold takes into consideration factors that are not necessarily in the control of the airline like airport congestion, taxi times from the runways, gate availability, those tend to be in the control of air traffic control or the airport itself. Many travelers have a difficult time understanding that delays will happen. It is kind of the nature of air travel.

To tell you the truth, airlines do not get nearly enough credit for how difficult it is to provide air transportation. Although you are certainly entrusted to get travelers from point A to point B in a timely manner, it’s more important that you get travelers from point A to point B safely. And there are so many elements that go into getting a single traveler from point A to point B, including factors that are beyond an airline’s control such as inclement weather and air traffic. If you have exceptional on-time performance, then you can proudly announce that you’ve done a good job in spite of everything that has worked against you.

Why you should get OTP data from a third party

Now that you know some of the benefits of OTP data, it’s important to understand the value of getting that information from a third party provider. Even though airlines have access to their own OTP data, it can prevent a lot of headaches to use a company like FlightStats to report on-time performance metrics.

When an airline makes a statement about their own operations, they’re often met with skepticism. With all due respect to airlines, many people are distrusting by nature and often doubt that airlines will report accurate information. Pulling data from a third party helps remove that skepticism because we have no interest in the situation at hand.

Both airlines and their customers can trust that we will report an accurate, reliable ranking of flight status information. This is especially useful to airlines that want to make on-time performance commitments to their corporate customers or tout their impressive on-time performance ranking in marketing materials. Using a third party source like FlightStats provides instant credibility.

Accomplishing more with OTP

Our free monthly on-time performance reports and annual OPS awards are just the beginning of what you can access. We offer an OTP Analysis Workbook that provides a comprehensive and granular analysis of key performance metrics. These workbooks include visualizations and reports focusing on airline and alliance benchmarking, departure and arrival statistics, trend analysis, carrier performance comparison, and daily/hourly analysis. Reviewing these metrics will reveal the strengths and weaknesses of your airline and your competitors.