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Friday, May 18, 2012

Network (Part 4)

Martin Apsel, Manager Network Development

Have you ever wondered why an airline flies to a particular destination? Asking this question with regard to SWISS is part of my job. Where to fly to? When? With which aircraft? Among others, these are the questions that my colleagues and I in Network Development grapple with. This has little to do with IT infrastructure, as some people outside the industry who see my business card erroneously think.

If you imagine an airline as a factory, then Network Development is responsible for managing production. For example, we determine the rate of production and whether we produce more of A and less of B. Other decisions that rest with us are whether to add a new product or do away with another. Back from the factory to the airline business: Our department’s product is the timetable.

There are many things to keep in mind when devising a schedule. Every market has its own individual needs which must be adequately taken into consideration when putting the timetable together. Achieving success takes a lot more than simply flying from A to B. For instance, a route which relies heavily on business travel must have at least one connection early and late in the day. That way, business travellers are able to fly out and back on the same day without having to stay overnight. Leisure destinations, on the other hand, are predominantly price-driven. Here, the schedule is less a quality factor than the price the customer is willing to pay for transport. Our commitment as a company to offer a good product is certainly reflected in the timetable as well. For this reason we constantly try to offer our customers, business and leisure alike, the best possible flight schedules.

It is no surprise that Network Management can be divided along geographic lines, namely long-haul (intercontinental) or short-haul (Europe). Besides this, for planning purposes another relevant factor is the amount of time before a flight starts to go operational. Therefore, within Network Development there are three areas of activity we deal with: namely network-strategy, -planning, and -steering.

Network-strategy topics have a lead time of two to ten years and for example have a significant impact on fleet development and SWISS’ long-range corporate growth. In this area we work together with Fleet Development and Corporate Development, in order to set the base for future capacity needs. When the issue at hand is making use of this capacity by introducing a new route, a shortlist of potential new destinations takes form about two years before an actual inaugural flight lifts off the ground.

Network-planning deals with all topics with a timeframe covering approximately two years before the start of the relevant timetable period. The emphasis here is the concrete planning of new destinations that have emerged as potential points in the network on the basis of advanced analysis, or the expansion of the existing route network as a means of improving the timetable. With the assistance of various tools we for instance analyse such factors as the market demand and estimate data like the added value our network would gain thanks to a new destination or an additional flight on an existing route. Coordination with our Sales units and Revenue Management helps us to gain a better understanding of a particular market.

The steady increase in demand volatility in recent years has made greater flexibility in network planning a necessity during this phase of a project. These days, decisions on short notice are sometimes required to a greater degree than this was the case in times past. The decision to add a new long-haul destination, such as the introduction of service to Beijing earlier this year, in general has to be made 10 to 12 months prior to launch date. In Europe, on the other hand, the lead time may be a matter of only a few weeks, as this was the case with the introduction of night stops for Bucharest and Prague newly launched in summer 2012.

Once a timetable period is up and running the attention switches to optimising operations. Network-steering, as this field of duty can be defined, focuses for example on making connecting flights more attractive etc. In this area we work closely with the Scheduling team.

Although one timetable period follows another and the perception might arise that this job could become boring, our work is kept interesting by the constantly changing market environment. Therefore, we are repeatedly required to review what we do.

4 comments:

  1. Interesting. But it is not answered why you really choose a potential new destination. Are you doing a recherche how many people are travelling i.e. to Bristol (a destination you don't fly to)? And how do you do that? And how do you find out how many passengers would use the new destination from the Swiss market? How should be the relation between people who change in ZRH and people from the home destination ZRH? And do you check every day how the performance of the present network is? How you decide to close a destination like Sofia several months ago? And which part plays the big mother Lufthansa? Do they can order you should give up destinations despite they doing well?

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  2. Excellent series, thanks for showing us this insight into your excellent airline operations!!

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