Mais conteúdo relacionado Semelhante a Fast track to sustainable value through airline cost transformation (20) Fast track to sustainable value through airline cost transformation2. COST OF LABOR
Pilot Shortages plus ongoing recoup
efforts of concessions made in a post-
911 world will continue to drive up labor
costs.
CAPACITY
Capacity growth of 5.8% CAGR globally
between 2011-2017 resulting in a yield
CAGR of -5.3% on long haul and -4.2% on
short to medium haul markets. Future
capacity growth will result in lower
margins and limited ability to pass cost
escalation to the customer
COST OF FUEL
Fuel makes up ~15-20% of an airlines cost
at 2017 prices which are roughly half of
2011-2014. As fuel price rises, only a
portion of the cost increase may be
passed on to customers due to
supply/demand dynamics.
AIRLINES FACE UNCERTAINTY AND UNIQUE
HEADWINDS THAT IMPACT PROFITABILITY
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3. BUT… ARE THEY EFFECTIVE AND SUSTAINABLE?
MAJOR COST REDUCTION PROGRAMS ARE
LAUNCHING
of the G1000
have announced
major cost takeout.60%
are able to sustain their
cost savings for one to
two years.
Leaders that use cost reduction to fund new capability & growth are three times more likely to increase shareholder
dividends/returns.
51%
Copyright © 2018 Accenture All rights reserved. 2
4. A WHOLISTIC AIRLINE COST TRANSFORMATION IS
REQUIRED TO GROW PROFITS.
MaintenanceRevenue Ground
Handling
Sales,
Distribution,
Marketing
Aircraft &
other asset
ownership
Landing &
Navigation
fees
Cockpit and
Cabin Labor
Fuel Catering G&A Regionals
(if applicable)
A.C. finance
Lifecycle Mgt SCM
MRO BTW Operations
Labor Planning
Labor Agreements
Pilot Training
Operations and Disruption Management
Supply Chain
Contract and procedure compliance monitoring
IT services strategy
Marketing
effectiveness
Insurance
IT software and
infrastructure costs
Freight / logistics
W&B / load planning
Flight Planning
Innovation, Digital, Advanced Analytics, Design Thinking, Automation
Distribution channels
and agreements
Recruiting
Real Estate Mx PlanningA.C. Procurement ATW Operations Crew Pay
F&B / soft goods
procurement
Fuel
procurement Shared servicesWellness programsPricing optimization
Partnerships management
(Alliance / JV)
Organization Size and Shape Design
Cargo sales effectiveness
Marketing
contracts
Network
optimization
Cargo operations
Airports GH ContractsMx Contracts Crew Pairing
Catering
contracts
Conservation
processesRM systems and processes CPA agreements
Medical and
pharmaceutical
benefits
Fleet optimization
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5. FOR COST PROGRAMS TO BE SUCCESSFUL,
THERE MUST BE A LARGER SET OF GOALS
Offset growth in less controllable
costs areas
Retain and develop your team
Invest in customer satisfaction Fund growth transformations
Offset yield decline Return capital to shareholders
Copyright © 2018 Accenture All rights reserved. 4
6. Just like a fad diet, most cost optimization
initiatives don’t last.
In fact, only 36 percent of companies
surveyed agree that their business sustains
the benefit of cost optimization programs.
COST TRANSFORMATIONS FAIL TO SUSTAIN
THEMSELVES WHEN COMPANIES DON’T HAVE
THE RIGHT TOOLS
Culture/buy-in
67%
Data/visibility
33%
Change management
41%Hardest
obstacles to
overcome
Beyond the Buzz: Zero-Based Mindset, Accenture
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7. VALUE FROM AN AIRLINE COST REDUCTION IS
ONLY LIMITED BY MINDSET AND PACE ILLUSTRATIVE
EXAMPLES
Labor
Fleet
Distribution
Fuel
Maintenance
G&A
Airports
5-10% within 18 Months
Traditional Cost Transformation The New Cost Transformation
10-20% within 3-5 Years
Optimized manpower planning
Fuel conservation programs
Fleet and network optimization
Steering toward direct distribution
Contract rate and terms renegotiation
Rate and rent negotiations
Rate negotiations and policy compliance
Real-time task assignment
AI supported flight planning
‘Day of’ fleet optimization
Defining new low cost distribution channels
Predictive maintenance
Fees offset from passenger steering to retail and F&B
Process automation
Copyright © 2018 Accenture All rights reserved. 6
8. 7
IT IS A MINDSET THAT WE APPLY TO THE ENTIRE ENTERPRISE
ZERO BASED APPROACHES HAVE EVOLVED:
Copyright © 2018 Accenture All rights reserved.
ZERO-BASED
FRONT OFFICE
ZERO-BASED
ORGANIZATION
ZERO-BASED
SPEND
ZERO-BASED
AIRLINE
ZBA, OR ZERO-BASED AIRLINE
MINDSET, IS A NEW APPROACH
THAT IS MORE HOLISTIC THAN
TRADITIONAL ZERO BASED
BUDGETING EXERCISES.
Unleashing ZBA involves gaining a
forensic visibility into enterprise-wide
spending and funneling savings back
into growth initiatives. Making
companies agile. More competitive in
the digital age.
9. Ultimately, its is about instilling a radically different value system with employee behaviors of ownership and
accountability; we have proven processes and accelerators to support this change
KEY SUCCESS DRIVERS
Copyright © 2018 Accenture All rights reserved. 8
1Activating
Leaders
3Shifting
Mindsets &
Behaviours
4Hardwiring
behaviors
into the
Organization
2Visibility into
business and
tools to drive
change
10. ACCENTURE’S ZERO BASED METHOD
• Creates unparalleled visibility - builds from scratch the whole cost base aligned to
the new strategies of the business (it does not only aims for past efficiencies
• Changes culture, not a crash diet
• Business led, not just a finance or procurement
• Builds sustainable capabilities
• Use of robust methodology (patent pending in US)
• Category benchmarks collected over years of work across industries
• Transformation approaches allow risk mitigation
• Leverages the application of digital capabilities to maximize efficiency, e.g.,
Robotics / AI, Analytics and Big Data, Social Media, etc.
• People-focused approach incentivizes the organization to achieve the results and
promotes the acquisition of new skills
Recently awarded patent for Zero based AI Platform that supports the proprietary
closed loop process
ACCENTURE’S EXPERTISE IN COST
TRANSFORMATION IS UNMATCHED
Copyright © 2018 Accenture All rights reserved. 9
11. IMPACT
AT SPEED
THAT STICKS
A CLOSED LOOP APPROACH DELIVERS
Visibility
CLOSED
LOOP
Value
Targeting
Category
Ownership
Lock Targets
Into Budget
Execute
Initiatives
Control &
Monitoring
1 2 3
4
5
6
Copyright © 2018 Accenture All rights reserved. 10
12. OUR AIRLINE EXPERTS WILL CHALLENGE YOUR
TEAM TO ZERO-BASE YOUR AIRLINE
Expansive network of industry
professionals for access to
specialized industry expertise
when needed
Over 100 dedicated aviation advisors
85 employees that held industry positions from
40+ aviation companies
75+ airline clients
10+ Airline major cost transformation programs
100s of smaller targeted cost projects
3 airline optimization tools with
over 70 industry subscribers
Copyright © 2018 Accenture All rights reserved. 11
13. TARGETED BUT COMPREHENSIVE EFFORT BECAUSE WE KNOW AIRLINES
AND HAVE THE RIGHT TOOLS
OUR PROCESS AND TOOLS DELIVER RESULTS
Forensic visibility in weeks not
months
Co-creation with our clientsFuture cost focused through
digital lens
Copyright © 2018 Accenture All rights reserved. 12
14. VISIBILITY IS THE KEY TO FOCUS ON THE
‘RIGHT’ AREAS TO DELIVER REAL VALUE
GETTING STARTED
Powered by Accenture’s aurora AI tool
and Seabury Consulting’s expertise
Create full cost visibility to ensure
‘real’ and trustworthy figures…
Transactional data are combined
to ensure full spend baseline…
…enabling powerful analyses &
benchmarking to drive the right
opportunities
…through standardized and unique
cost definitions, harmonizing the
Chart of Account
Visibility
CLOSED
LOOP
Value
Targeting
Category
Ownership
Lock
Targets
Into
Budget
Execute
Initiatives
Control &
Monitoring
1 2 3
4
5
6
Copyright © 2018 Accenture All rights reserved. 13
Review of key airline contracts
(CBA, CPA, Maintenance, GH)
Tailor benchmarks for airline
specific network and operating
characteristics
15. 14Copyright © 2018 Accenture All rights reserved.
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