The coronavirus pandemic has upended the airline industry, but companies that take a data-driven and action-oriented approach to their business will come back stronger than before.
Coping with the demand shock in the wake of COVID-19 has posed one of the greatest challenges in the airline industry’s history. Our airline clients are asking: how do we ensure survival in the face of a global pandemic? And how can we prepare to ramp up and create value in the new reality? The eventual winners will make bold moves now—with only a small window of opportunity to act.
For many airlines, this will require a clean-sheet redesign of strategy, networks, and operations. Companies have an opportunity to rethink their networks, schedules, staffing, organizational design, digital setup, revenue management, and much more. Whether applied company-wide or to specific divisions, this approach can unlock meaningful value and deliver transformative change.
We serve seven of the ten largest network carriers and six of the top 20 low-cost carriers, in addition to airports, OEMs, cargo carriers, and other key players in the aviation ecosystem. Our airline consulting teams combine expertise in all aspects of the airline industry, including strategy, network planning, airline operations, pricing and revenue management, sales and distribution, personalization and airline loyalty, MRO, people and organization, digital and travel technologies, and sustainability. By working in cross-functional teams, we view each airline holistically to ensure that every move delivers cascading benefits for the business overall.
Our work has achieved groundbreaking impact. One airline client’s transformation has been described as “the largest corporate turnaround in the country’s history.” Another client became the most punctual airline in the world. And another achieved a three-point improvement in on-time departures.
Our work is always 100% customized to a client’s unique needs, and BCG’s airline consulting teams have a strong suite of proprietary tools to support our analysis and strategic approach.
Improving Pricing and Revenue Management
By combining our pricing expertise across multiple industries with our work in revenue management, our airline consulting teams developed a methodology for revenue enhancement in the travel and tourism industry that has helped individual airlines increase revenue per available seat mile (or kilometer) by 1% to 2% on average, and up to 20% on certain routes.
Improving On-Time Performance
Using BCG’s proven methodology, a South American low-cost carrier improved on-time performance by 9%, crew satisfaction by 50%, crew productivity by 10%, and airport FTE productivity by 11%; it also reduced lost baggage by 20%.
Reducing Operational Costs
A large US airline built a more-efficient operating platform that optimized crew staffing, preventive maintenance, airport utilization and turn time, and system operations, reducing operational costs by 20% to 25%.
Launching an Agile Transformation
A major Asian airline, facing intense competition from full-service and low-cost carriers, embarked on a two-phase transformation that engaged 10,000 employees in an agile transformation and reduced costs by more than $500 million.
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In this episode of The So What from BCG, Jason Guggenheim, BCG’s global leader of travel and tourism, explains how companies can sharpen their ability to sense shifts in demand.
Hard-hit airports can rebound from the crisis by adapting their economic models, promoting industry sustainability, and fully realizing their digital potential.
Consumers are ready to hit the road and take to the skies. Organizations within and beyond the travel industry should be ready for the demand spike—but prepare for uncertainty, volatility, and new patterns to emerge.
A data-driven, action-oriented, and digitally supported approach will help airlines emerge stronger from the pandemic crisis.
