KPI's

Question 1

Definition Key Performance Indicator

Answer 1

A measure that both characterizes (in whole or in part) and indicates (predicts) the performance of a system at an aggregate level.

Question 2

KPI Categories

Answer 2

Traffic, Financial, Load factor, Productivity, Operations

Question 3

Name the traffic based indicators

Answer 3

1. Available Seat Kilometer (ASK)
2. Revenue Passenger Kilometer (RPK)
3. Available Tonnes Kilometer (ATK)
4. Freight Tonnes Kilometer (FTK)

Question 4

Available Seat Kilometer (ASK)

Answer 4

The number of seats made available per flown kilometer. This is the most common measure of the airline output and gives us an idea of the capacity offered and the distance travelled.

Question 5

Revenue Passenger Kilometer (RPK)

Answer 5

The number of revenue passengers transported per flown kilometer. This is the most common measure of airline output actually consumed and gives us the ideas of the number of passengers transported and the distance travelled.

Question 6

Available Tonnes Kilometer (ATK)

Answer 6

The number of tonnes capacity made available per flown kilometer.

Question 7

Freight Tonnes Kilometer (FTK)

Answer 7

The number of freight tonnes transported 1 kilometer.

Question 8

Financial based indicators

Answer 8

1. Cost per ASK or Unit Cost
2. Revenue per ASK or Unit Revenue
3. Revenue per RPK or Yield

Question 9

Cost per ASK or Unit Cost (CASK)

Answer 9

The amount of operational costs incurred for each ASK supplied. That is, a CASK equal to 1 means that an airline pays 1 monetary unit per each ASK unit operated.

CASK give us an idea of the average cost of operating one seat in one kilometer.

Question 10

Revenue per ASK or Unit Revenue (RASK)

Answer 10

The amount of operational revenue collected per ASK supplied. That is, a RASK equal to 1 means that an airline makes 1 monetary unit per each ASK unit
operated.

RASK give us an idea of the average operational revenue made per seat-kilometer offered.

Question 11

Revenue per RPK or Yield (RRPK)

Answer 11

The amount of operational revenue collected per RPK operated. That is, a yield equal to 1 means that an airline makes 1 monetary unit per RPK unit operated.

Yield gives us an idea of the average fare paid by a customer to fly 1 kilometer.

Question 12

Operating profit aka basic airline profit equation.(formula)

Answer 12

RPK x Yield - ASK x CASK

Question 13

Load Factor indicators

Answer 13

1. Load Factor (LF)
2. Average Leg Load Factor (ALLF)
3. Average Network or System LF (ANLF)

Question 14

Load Factor (LF)

Answer 14

The number of passengers divided by the number of seats of a flight. Equivalent to RPK / ASK.

Question 15

Average Leg Load Factor (ALLF)

Answer 15

The mean value of LF’s in the set of flights considered.

Question 16

Average Network or System LF (ANLF)

Answer 16

Equivalent to the ratio between the sum of RPK values divided by the sum of ASK values.

Question 17

Break-even Load Factor (BELF)

Answer 17

The value of LF for which the revenues exactly covers the operational costs of the flight (or the set of flights).

Question 18

Obtaining BELF (formulas)

Answer 18

RASK = Revenue / ASK <=> RASK = Revenue / AKS x RPK / RPK

RASK = Revenue / RPK x RPK / ASK <=> RASK = Yield x LF

RASK = CASK = Yield x BELF (break even if this condition is true)

BELF = CASK / Yield

Question 19

Productivity indicators

Answer 19

1. Aircraft Productivity

2. Labour Productivity

Question 20

Aircraft Productivity

Answer 20

The average number of ASK in a given period of time (e.g., year, week, day) per aircraft in the fleet. This value can be computed based on the type of aircraft (and market) – e.g. for regional jets, narrow-body airliner or wide-body airliner.

Question 21

Labour Productivity

Answer 21

The average number of ASK produced in a given period of time (e.g., year, week, day) per employee involved in the operation of the airline.

Question 22

Operations based indicators

Answer 22

1. On-Time Performance (OTP)
2. Average delay
3. Number of missed connections
4. Cost of delay (and misconnections)

Question 23

On-Time Performance (OTP)

Answer 23

The percentage of flights in a given period of time that arrive at the destination gate with no more than 15 minutes delay over the scheduled arrival time.

This is a key indicator for airlines, in particular in the definition of their image and in the creation of a reliable relationship with their customers. It reflects the frequency of flight delays or cancellations and is a measure of service quality.

Question 24

Average delay

Answer 24

The average difference between the scheduled time of a flight (or a set of flights) and the effective times of arrival (over a period of time).

In most cases, to avoid the accumulation of time difference from early flights and the time differences from delayed flights, only flights that are delayed are considered in this indicator. In these cases, the indicator is called Average delay per delayed flight.

Question 25

Number of missed connections

Answer 25

The number of passengers that, in a given period of time, missed their connections between two flight of the airline given delays in the operation of the flights.

Question 26

Cost of delay (and misconnections)

Answer 26

The sum of costs related to delays introduced in passengers’ itineraries, caused by delays in the airline operation or by the cancellation of flights.

These cost usually only include hard costs, i.e., cost related to the compensation offered to passengers in case of itinerary disruptions, including meals, communication, transportation and hotel accommodation. But other
costs can be added, such as the soft cost related to the inconvenience cost perceived by the passenger,
which relates to the chance of the passenger not flying with the airline again.