Strategic fleet planning crucial

© THE strategic fleet planning strategy is a crucial process within the airline industry. It relates to decisions that airlines take on their fleet type/size. In the aviation Industry, these decisions are extremely important, being undoubtedly among the most important ones that senior executives of commercial airlines have to make. 

Buying a wide-body aircraft like the Airbus 330-200 requires an investment of more than US$200 million and even small aircraft like the Embraer 170 costs over US$20 million.

Investment costs are certainly a major factor in the fleet planning process but are not the only drivers. 
As part of this process airlines like Air Zimbabwe (AirZim) must decide which aircraft type suits their network; how many required; when there are needed.

Current airline re-fleeting (also known as demand driven dispatch) strategies/ practice is geared towards managers being able to forecast demand and assign aircraft capacity to schedule flights well in advance. 

The accuracy of the passenger demand forecast when planning schedules becomes pertinent when assigning an aircraft type to a route.

Airlines start the planning of operational schedules well in advance, as such the construction of the airline schedules are based on uncertain forecasted estimates (normally historical data is used) of the passengers’ demand for each route in the airlines’ network.

For most airlines, short-term forecasts of passenger demand are also used for optimal utilisation of their feet i.e. re-fleeting involving re-allocating the originally assigned aircraft types of aircraft to alternative routes on their network.

The delivery of AirZim’s first Embraer ERJ-145 at the end of April 2019, with two more Embraers and two Boeing 777-200ER (extended range) on order, is starting to show that AirZim means business and operating a ‘mixed aircraft fleet’ allows the airline deal with opportunities as well as operational challenges.

There is also the notion that when a particular aircraft type is sufficiently similar in terms of flying characteristics (termed commonality) to another aircraft type, aircraft manufacturers apply to the relevant aviation regulators for a common aircraft type certificate. 

This enables pilots with specific training to simultaneously operate similar aircraft types. 
Such flying of multiple versions of the same aircraft by the same pilots is referred to as mixed-fleet flying.

I am assuming an in-depth study would have been taken by the AirZim senior team to examine cost-efficient fleets and their operational patterns for medium-and long-haul routes in a macroscopic view. 

In aviation, aircraft type and fleet configuration are very complex, and there are several criteria partly conflicting — that need to be considered. 

Any decision taken must adapt to numerous factors such as operational and environmental performance of the aircraft, technical, cabin comfort, financials, networking strategies for the airline and assessing the dynamics of local and global market factors.

In many regions of the world, airlines find it necessary to have a mixture of aircraft types, such as in the case of AirZim who will operate a ‘mixed fleet flying programme by using the new aircraft types the Embraer ERJ-145 and the two Boeing 777-200ER on order; together with their current fleet of the Boeing 767-200ER and the Boeing 737-200Adv.

What are the implications of a re-fleeting strategy for AirZim managers?

AirZim will be able to re-assign aircraft to meet with demand in view of improving the operating profitability. 
Schedules are usually fixed for many months ahead of departure dates with limited information of the actual demand. 

Using more detailed and reliable demand information (controlled by revenue management systems) to better match capacity supplied with demand, revenues may be increased and operating costs decreased.

In aviation, daily uncertainties such as crew reassignments, aircraft technical problems can lead to indirect or direct failure of regular operational schedules. 
This is a major inconvenience for passengers and adds costs to airlines. When any disruption occurs, dispatchers will typically alter the flying programme.

Dispatchers will consider rescheduling options that include ferrying and swapping aircraft. These adjustments must satisfy curfew restrictions in certain countries, maintenance requirements and aircraft balance requirements. 

Due to the complexity of irregular operations and the cost consequences, it is critical to have spare aircraft to ensure that there is minimal disruption to the flight schedule.

Now that the Embraer ERJ-145 is about to take to the skies, there needs to be a change in operational practice at AirZim.
One strategy would be having a high frequency using a smaller aircraft (ERJ-145) while maintaining a high load factor. 

This operational choice would, of course, need to be interrelated to Air Zimbabwe’s competitor strategy which will include network expansion and future plans for route allocation.

For AirZim keeping operating costs low should be more of a concern than investment costs because they are ‘for the rest of the assets (aircraft) life. 

As such, a focus should be put on fuel burn and carbon and noise emission. 

While recognising the superior fuel burn performance of narrow-body aircraft such as Boeing 737/777, there is evidence that the cost efficiency of the wide-body fleet is more robust in dense and longer distance markets especially considering fuel price fluctuations.

In contrast to the empirical observations in previous research on re-fleeting, there is a disparity in the air transportation literature, regarding the size of cost-efficient aircraft. Many studies identify the small economic and environmental scale effects of large aircraft even though there are variations in accord with specific types. 

However fleet decisions is a critical issue that only affects the competitiveness of an airline, but affects the entire network structure and must be harmonious with strategies of the airline especially in terms of total capacity.

With work being carried out by AirZim’s administrator Reggie Saruchera to conclude the airline’s debt assumption that includes raising capital for the acquisition of additional aircraft; the importance of fleet decisions and having the right aircraft type will be strategically important to AirZim to regain the competitive advantage over their rivals.

Zimbabwe-born Adiel Mambara, who has a demonstrated history of working in the airlines/aviation industry, is currently the country manager (UK and Ireland) for Royal Brunei Airlines.

 

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