OTP & The Indian Airline Industry

Introduction

Air Travel… The first thing that pops up in our mind when we hear/read this word is ‘fastest’ mode of transport. A person prefers to travel by the airline industry in order to save on time, as time has become one of the most valuable possession these days. When such is the scenario, any kind of delay is not acceptable. Hence, with the growth in the aviation sector, one factor that has gained significant importance is the ‘On-Time Performance (OTP)’ of the airline.

As per OAG’s definition, a flight is said to be ‘on-time’ if it arrives or departs within 14 minutes 59 seconds (i.e. under 15 minutes) of its scheduled arrival or departure. This 15 minutes rule is almost applied throughout the airline industry.

In this article, I have discussed about the factors that affect OTP, costs associated with it, OTP statistics of major airlines in the Indian market and finally the conclusion.

Factors affecting OTP

As per the Bureau of Transportation Statistics, the causes of delays have been broadly put into the following broad categories:

  • Air Carrier: The cause of the cancellation or delay was due to circumstances within the airline’s control (e.g. maintenance or crew problems, aircraft cleaning, baggage loading, fueling, etc.).
  • Extreme Weather: Significant meteorological conditions (actual or forecasted) that, in the judgment of the carrier, delays or prevents the operation of a flight such as tornado, blizzard or hurricane.
  • National Aviation System (NAS): Delays and cancellations attributable to the national aviation system that refer to a broad set of conditions, such as non-extreme weather conditions, airport operations, heavy traffic volume, and air traffic control.
  • Late-arriving aircraft: A previous flight with same aircraft arrived late, causing the present flight to depart late.
  • Security: Delays or cancellations caused by evacuation of a terminal or concourse, re-boarding of aircraft because of security breach, inoperative screening equipment and/or long lines in excess of 29 minutes at screening areas.

Costs associated with OTP

Delays in the airline industry increases the costs by millions of dollars which further leads to reduction in operating revenues. Lets have a look at the costs associated with it on a broader aspect.

  • Costs related to resources: A delay leads to wastage of resources, i.e. flight & cabin crew, ground staff and the aircraft too. Whether the airline or that particular aircraft generated revenue or not, cost still has to be borne to sustain these valuable resources.
  • Cost to the Airport: An airline needs to pay for the time its aircraft spends on the airport. More the delay, greater is the price the airline pays to the airport.
  • Economic Costs: This is the cost associated with customer satisfaction
    • A low performing airline leads to loss of business as the flyer will avoid travelling by the airline that has repeated delays.
    • OTP also plays an important role in the codeshare partnership. In such cases, airlines enter into codeshares with airlines with good OTPs as it directly affects their customers’ satisfaction.
  • Costs associated with re-planning: This is in relation with airlines operating multiple trips in a day. Here, if the first flight has been delayed, then it spreads through the day. As this requires further re-planning of the arrival/ departures at other airports which may also lead to further delays and so the costs.

 OTP of Major Airlines in the Indian Market

This section will give a picture of the OTP of major Indian airlines with respect to:

  • Month-wise OTP in India from Jan’17 to Nov’17
  • OTP percentage & ranking in the Global Scenario & Asia Pacific Region from Jan’17 to Nov’17

Month-Wise OTP in India from Jan’17 to Nov’17

Below is a graph of month-wise OTP for the major airlines in India. The data has been collated as per DGCA (Directorate General of Civil Aviation) domestic route statistics, i.e. airline-wise OTP at four metro airports viz. Bengaluru, Delhi, Hyderabad & Mumbai for the months of Jan’17 to Nov’17.

otp 3Graph 1 : Month-wise OTP analysis for domestic routes specific to four metro airports
*Note: The OTP for Jet Airways is Jet Airways+Jetlite.

OTP Percentage & Ranking in the Global Scenario from Jan’17 to Nov’17

This section of the article focuses on the OTP of the major airlines in India operating on both international and domestic routes. The data for the graph and ranking has been collated from the monthly OTP reports provided by OAG. The airlines spoken about in the Graph 2, Graph 3 and Table 1 have been chosen as per their market share in the India.

OTP Global 1.jpgGraph 2: OTP percentage of major airlines in India in the Global Scenario from Jan’17 to Nov’17
Global RankingTable 1: OTP Ranking of major airlines in India in the Global Scenario from Jan’17 to Nov’17
ASPAC rankingGraph 3: Monthly OTP Ranking in the Asia Pacific Region from Jan’17 to Nov’17

It can be clearly seen that where Indigo and Air Asia(India) have constantly striven to keep up a good OTP, Air India and Jet Airways have really gone down the league. Hence, as per the OAG punctuality report, following results have been pulled out for the year 2017:

  • Indigo achieved an OTP of 81.22% (compared to 75.27% in 2016)
    • Rank 4 in Top 20 mega airlines by OTP
    • Rank 9 in Top 20 LCC airlines by OTP
    • Rank 9 in Asia Pacific airlines by OTP
  • Air Asia (India) achieved an OTP of 74.85%
    • Rank 17 in Top 20 LCC airlines by OTP

Conclusion

A delayed aircraft just does not affect the airline’s OTP, it even affects the performances of other aircrafts following it in line. One delayed aircraft early in the morning can lead to 70 other delays throughout that day. Further, a bad OTP lead to increase in costs, lowers the profits, reduces customer experience and negates the employee morale.

A good OTP does not mean achieving 100% punctuality. Its about delivering against a target. In fact, the top ranked airline in terms of OTP for the year 2017, airBaltic had its OTP at 90.1% and that in the year 2016 , Hawaiian Airlines had its OTP at 89.87%. To attain a good OTP, there needs to be a good amount of coordination between people and functions.

 

11 thoughts on “OTP & The Indian Airline Industry

  1. Good one Haniksha….in dept knowledge of OTP given with graphical representation..Keep it up !!!!!👌👌👌

    Would like to see more of Ur blog related to airline.

    All the best,

    Shafi

    Liked by 1 person

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