Developing an Airline Ticketing Scorecard

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An airline ticketing scorecard is a useful tool that airline managers could use to measure how the company is performing in terms of airline ticket sales. Check additional information about airline ticketing scorecard.

Contrary to common misconceptions, many airline companies are struggling to gain desired revenue margins from their regular operations. Despite being one of the most lucrative business sectors, the airline industry is highly vulnerable to various extraneous factors. These factors challenge the profitability of airline companies. It is for this reason that many investors are reluctant to put their money on these companies. The vulnerability of the industry is strongly manifested in the reality that it is one of the most customer-sensitive business sectors in the world. Nevertheless, performance management of airline companies could be made easier with the use of an airline ticketing scorecard.

The performance of airlines in terms of airline ticketing is crucial because it is through the sales of airline tickets that these companies primarily gain profit. Prolonged periods characterized by dismal airline ticket sales performance would therefore seriously threaten the viability of any airline company.

There are various factors that could potentially lead to poor airline ticket sales. Perhaps one of the fiercest among these is unpredictable weather. In 2006 alone, the US Department of Transportation reported that more than 22 million minutes had been wasted due to flight delays. The duration of this period can be likened to more than 42 years. This figure is 20% higher than what was recorded a year before. Pinpointed as the main cause of flight delays is, as mentioned, the weather. For airline companies, time on the ground is revenue lost. Even a few minutes of flight delay could translate to millions of revenues lost.

This is one of the primary reasons why there is an urgent need for airline companies to monitor the performance of all departments in an airline company regularly. While weather is an extraneous variable that the management could not control, this is not the same case for lost revenue due to wrong decisions, mismanagement, or negligence committed by employees. These lapses could be prevented if the airline management had the foresight of anticipating occurrences that may affect their profitability.

One of the crucial tasks that airline managers do is to identify metrics that they can integrate into a scorecard to help them analyze and evaluate how the company is performing. These metrics are usually designed to measure the effectiveness of all company operations. In terms of airline ticketing performance, metrics like available seat miles (ASM), revenue per available seat mile (RASM), cost per available seat mile (CASM), and break-even load factor. These four metrics are commonly used by airline managers, including company investors and shareholders.

ASM is the number of paid seats available to passengers multiplied to the number of miles that the same seats are flown. RASM, meanwhile, refers to total passenger revenue divided by available seat miles. CASM pertains to the operating expenses incurred divided by available seat miles. Lastly, the break-even load factor refers the percentage of aircraft seats that need to be utilized for the revenues of one aircraft flight to equal its expenses. These four metrics can be integrated into the airline ticketing scorecard to give all shareholders and stakeholders a better idea of the company's performance.

If you are interested in airline ticketing scorecard, check this link to find out more about airline ticketing roi. Also, you can check other articles in Creating Best KPI category.

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