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5 An Airplane KPI Case

A senior British Airways official focused on reducing late planes as a key performance indicator (KPI) to turn the airline around in the 1980s. The official would personally call airport managers if a plane was delayed beyond a certain threshold. This motivated managers to take proactive steps to ensure on-time departures, even for delays caused by other airports. As a result, British Airways planes soon developed a reputation for leaving on time. The KPI was effective because it addressed critical success factors like on-time arrivals and departures as well as customer satisfaction.

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Emiliano Cruz Garcia
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72 views3 pages

5 An Airplane KPI Case

A senior British Airways official focused on reducing late planes as a key performance indicator (KPI) to turn the airline around in the 1980s. The official would personally call airport managers if a plane was delayed beyond a certain threshold. This motivated managers to take proactive steps to ensure on-time departures, even for delays caused by other airports. As a result, British Airways planes soon developed a reputation for leaving on time. The KPI was effective because it addressed critical success factors like on-time arrivals and departures as well as customer satisfaction.

Uploaded by

Emiliano Cruz Garcia
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Example: An Airline KPI Case.

LECTOR 1

My favorite KPI story is about a Senior British Airways Official who set about
turning British Airways (BA) around in the 1980s by reportedly concentrating
on one KPI.

The senior BA official employed some consultants to investigate and report


on the key measures he should concentrate on to turn around the ailing
airline. They came back and told the senior BA official that he needed to
focus on one critical success factor (CSF), the timely arrival and departure of
airplanes. The consultants must have gone through a sifting process sorting
out the success factors which were critical from those that were less
important. Ascertaining the five to eight CSFs is a vital step in any KPI
exercise, and one seldom performed.

In Exhibit 1.1 the CSFs are shown as the larger circles in the diagram.
The senior BA official was, however, not impressed as everybody in the
industry knows the importance of timely planes. However, the consultants
then pointed out that this is where the KPIs lay and they proposed that he
focus on a late plane KPI.
LECTOR 2

He was notified, wherever he was in the world, if a BA plane was delayed over a
certain time. The BA airport manager at the relevant airport knew that if a plane
was delayed beyond a certain “threshold,” they would receive a personal call
from the senior BA official (let’s call him Sam). I imagine the conversation going
like this:

“Pat, it’s Sam on the phone. I am ringing up about BA135 that left Kennedy
Airport over two and a quarter hours late, what happened?” Pat replies, “The
system will tell you that the plane was late leaving Hawaii. In fact, it was one
and three quarters hours late and everything was in order at our end except we
lost an elderly passenger in duty-free shopping. We had to offload their bags
and, as you can see, we did it in record time, only half an hour!” “Pat, how long
have you worked for British Airways?” Pat, realizing this conversation was not
going well, responded, “About 30 years, Sam.”
“In fact, Pat, it is 32. In 32 years of experience with us you are telling me that
with six hours of advance notice that the plane was already late you, and your
team, could do nothing to bring it forward, and instead you added half an hour.
Quite frankly Pat,
I am disappointed as you and your team are better than this!”

Pat and many others employed by the airline had the “not invented by us”
syndrome. A late plane created by another BA team was their problem not ours.
Pat gathered the troops the next day and undertook many proactive steps to
ensure they recaptured the lost time, no matter who had created the problem.
Actions such as:
● Doubling up the cleaning crew, even though there was an additional
external cost to this.
● Communicating to the refueling team which planes were a priority.
● Providing the external caterers with late plane updates so they could
better manage re-equipping the late plane.
● Staff on the check-in counters asked to watch out for at-risk customers
and chaperone them to the gate.
● Not allowing the business class passenger to check in late, yet again. This
time saying, “Sorry Mr. Carruthers, we will need to reschedule you as you
are too late to risk your bags missing this plane. It is on a tight schedule. I
am sure you are aware that the deadline for boarding passed over 30
minutes ago.”
 
LECTOR 3

The BA manager at the relevant airport knew that if a plane was delayed beyond
a certain threshold, they would receive a personal call from Sam. It was not long
before BA planes had a reputation for leaving on time.

The late-planes KPI worked because it was linked to most of the critical success
factors for the airline. It linked to the “delivery in full and on time” critical
success factor, namely the “timely arrival and departure of airplanes,” it linked
to the “increase repeat business from key customers” critical success factor, and
so on.

It is interesting that Ryanair, an Irish low-cost airline, has a sole focus on


timeliness of planes. They know that is where they make money, often getting
an extra European flight each day out of a plane due to their swift turnaround
and their uncompromising stand against late check-in. They simply do not allow
customers to get in the way of their tight schedules.

The late-planes KPI affected many aspects of the business. Late planes:
● Increased cost in many ways, including additional airport surcharges and
the cost of accommodating passengers overnight as a result of planes
having a delayed departure due to late night noise restrictions.
● Increased customer dissatisfaction leading to passengers trying other
airlines and changing over to their loyalty programmes.
● Alienated potential future customers as those relatives, friends or work
colleagues inconvenienced by the late arrival of the passenger avoided
future flights with the airline.
● Had a negative impact on staff development as they learned to replicate
the bad habits that created late planes.
● Adversely affected supplier relationships and servicing schedules,
resulting in poor service quality.
● Increased employee dissatisfaction, as they were constantly fire fighting
and dealing with frustrated customers.

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