Airline route profitability using APAS
Airline Performance Analysis System (APAS) is a module within the EPAS Suite and is the leading solution in the airline industry for measuring route and network performance. The results modelled in APAS support decisions such as frequency rationalization, entering/ exiting markets, fleet utilization, etc. APAS provides a comprehensive view of the network by generating information at the route level (flight segment by date), network level (flight/ beyond flight combination) and O&D level (passenger itinerary).
APAS is currently used by Delta Air Lines, Southwest Airlines, American Airlines and Aero Mexico. The fact that a single product can fulfil the requirements of such a diverse population of airlines speaks to its versatility and scalability.
APAS is a configurable route performance tool that empowers users to define cost allocation methodologies in a multi-model structure:
- Activity based costing allocation engine
- User defined, derivable statistics
- Intelligent cost classification
- Actuals vs. Economic vs. Forward etc
- Facilitates what-if analysis
The route performance tool then generates comprehensive, actionable results that provide stakeholders with the tools to make accurate decisions:
- Measure Segment profitability results as well as network contribution results and O&D Profitability
- Determine which markets to increase/ decrease capacity
- Identify markets to change gauge
- Assess marketing incentives
Comprehensive Analytics using APAS
APAS measures performance at the segment level, O&D level and network contribution level
- Segment profitability with key metrics
– Assess individual segment performance with ability to drill to flight by date
– Day of week performance/ time of day performance
– Key metrics can be defined by the end user including break even load factor, operating margin, EBITDA etc.
– View in multiple dimensions including operating carrier, aircraft type, geography etc.
- Unprofitable segments may contribute positively to the network
– Properly evaluating network performance includes looking at beyond contribution to evaluate segment performance relative to the value that is contributed to the system
– APAS incorporates this capability into its methodology configuration
– Includes factoring in of spill or displacement to properly score beyond revenue
- Measure O&D Profitability for a broader network view
– User driven methodology to drive flight level costs (e.g., fuel, pilots etc.) to individual itineraries to build up O&D metrics
– Measure true origin contribution by location, by region as well as region to region
– Identify new opportunities as well as hurdle rates for sold O&Ds
Click HERE to see to key features of EPAS.