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ON-TIME PERFORMANCE

OTP IS BECOMING INCREASINGLY IMPORTANT TO AN AIRLINES AND AIRPORTS

WHAT IS ON-TIME PERFORMANCE (OTP)?

OTP, short-hand for On-Time Performance, is a widely accepted method of understanding punctuality for different modes of public transport, not just aviation. It provides a standardised means of comparing how well one service provider operates according to its published schedule compared to another.

In aviation, an airline departure or arrival which is considered to be on time has a departure or arrival that occurs within 15 minutes of the scheduled time. The schedule is the basis of the airline proposition to its customers. Inevitably, external disruption such as adverse weather conditions, congestion, incidents, and industrial action can cause delays for operators but in general, OTP can be influenced by the performance of airlines and airports. Therefore, it is widely used as a powerful key performance indication for airlines and airports and is also a potential service differentiator for marketing the brand to air travellers.

WHY IS ON-TIME PERFORMANCE IMPORTANT FOR AIRLINE AND AIRPORTS?

OTP has a critical role to play in airline operations management. Delays affect productivity and cost airlines thousands of dollars every year. Many airlines have embedded OTP as a KPI using this to measure and evaluate processes and identify improvements to their operations.

Airlines and airports can analyse operational processes with different stakeholders e.g. ground handling and use OTP within their systems to support better collaboration and efficiency. They can understand how operations at different locations perform to understand and learn from best practice.

Many airlines choose to use OTP as one of their performance measures for staff, encouraging teams to work together towards the efficient turnaround of aircraft.

HOW CAN FLIGHT ON-TIME PERFORMANCE DATA BE USED?

OTP is a valuable metric for airlines and is an outward demonstration of reliability which can affect brand loyalty and ticket sales. Customer satisfaction is influenced by customer expectations and a flight that arrives after the scheduled arrival time can be a stressful experience for passengers. Managing expectations is necessary and On-Time Performance data provides an external verification about flight reliability, so passengers can be better informed regarding the probability of their flight operating on-time.

HOW CAN AIRLINES AND AIRPORTS IMPROVE CUSTOMER SATISFACTION?

Poor punctuality means flights arrive at their gate late or depart late, with consequences for other flights planning to use those gates. It means flights spend longer on taxiways burning fuel unnecessarily. It means passengers miss connections and get upset. The knock-on effects of these disruptions to onward travel is far reaching. In Europe, where passengers are entitled to compensation for late flights, there is a direct cost associated with poor OTP. Airlines are keen to promote their OTP performance and be recognised as leaders.

WHAT SHOULD A GOOD ON-TIME PERFORMANCE TARGET BE?

Measuring On-Time Performance can be challenging. With millions and millions of flight records, and real-time updates of hundreds of flights at airports around the globe every day, Any measure that can be applied across companies working in the same sector is valuable as a benchmark for performance.

As in any sector, companies like to compete and there is always a bit of noise around the ‘winners and losers’ in any bench-marking exercise. While it’s great for the winners, who get to publicise their achievements in the industry and to consumers, the real lessons are for those companies whose names appear lower down in the rankings. What should they be doing differently? They need to be asking themselves why another airline or airport with just as challenging an external environment can perform better than they do? Are there processes which need to be adapted? Is there something about the way departments and teams interact that holds back productivity?

Probably most people in the industry would accept that an OTP of 80% or above is pretty good. That’s 4 in 5 flights arriving within 15 minutes of their scheduled arrival time. The very best airlines and airports succeed in punctuality closer to 90% - but they remain the exception rather than the rule.

Going much beyond 80% of flights on-time will be easier for some than for others. Operating at congested airports and in congested airspace will make it harder. And as climate change begins to create more chaotic weather conditions, and storms in particular, keeping to schedule will be harder.

Achieving OTP well above 80% requires focus but there may be a point where striving towards ever higher OTP may be detrimental to the bottom line. The benefit of incremental improvements may be outweighed by the cost of achieving them. 

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A LOOK AT ON-TIME PERFORMANCE FOR THE WORLD'S AIRLINES AND AIRPORTS IN 2019'S EDITION OF THE PUNCTUALITY LEAGUE MAKES FOR SOME VERY INTERESTING ANALYSIS, ESPECIALLY AS SITTING ON TOP OF THIS YEAR'S LEAGUE IS A BRAND NEW WINNER.

IS 15 MINUTES THE RIGHT OTP MEASUREMENT?

AIRLINES AND AIRPORTS COULD BE "PADDING" SCHEDULES

One of the major talking points of on-time performance is the practice of ‘padding schedules’, where the time between the scheduled departure and the scheduled arrival have increased as a means of achieving higher OTP. While this could be construed as airlines scheduling to make performance look better, there is also a case where congestion actually allows a passenger’s expectations to be met. The questions is, are airlines successfully managing their customers’ expectations?

In practice, determining the correct schedule times for a flight are not straightforward. Build in too much padding so that flights are always on-time and you might lose one aircraft rotation each day, which has a major impact on the revenue generated by the asset. Build in too little padding and flights may regularly be late, causing a knock-on effect on every subsequent rotation of that aircraft for the rest of the day.

Whether it be padding or re-scheduling, the idea of having fifteen minutes as a measurement is a hot talking point in the world of OTP. For many in the industry, it is a case of not having enough leeway needed in order to provide a streamlined service, whereas some countries, such as China which uses 30 minutes as its definition of late, have chosen to adopt a different rule.

Who first defined a late flight as one that is 15 minutes late? No-one seems sure, but it is close to being the de facto standard around the world. Maybe it’s time to ask is it the right definition of late?

As the low-cost airline business model becomes the norm for airlines operating with high numbers of aircraft rotations flying multiple relatively short sectors each day and rapid aircraft turnarounds, it could be said that the efficient low cost airline has a harder time meeting OTP standards even if the business is making money. Padding schedules to improve OTP goes against the grain of the business model.

In contrast, for the airline whose network has a high proportion of long-haul sectors, the time on the ground is a relatively small proportion of overall flight operations and there is time in the air to make up time lost on the ground. Ironically, these carriers may find it easier to achieve higher OTP than the short haul airline.

Equally, hub-based legacy carriers may find it easier than low cost airlines to substitute one aircraft for another when there is an aircraft fault, thereby keeping the schedule in place. But all airlines operating into and out of a hub may find their schedules impacted by earlier flight delays and by congestion.

So, is it time for a re-think? What role does OTP hold for organisations in the industry which are not airlines or airports, such as regulators and insurance companies. Does it matter to them what the definition of late is as long as there is a standard?

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MONTHLY OTP REPORTS

Each month, OAG produces an on-time performance report for all airlines and airports in the database, allowing Name here and company name here

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HOW CAN AIRLINES AND AIRPORTS IMPROVE OTP?

Increasingly airlines and airports are focusing on the detail of achieving strong OTP and, a bit like a Grand Prix motor racing team or an elite cycling team, some are choosing to break down the processes involved into their constituent parts to see how performance can be improved at each step.

For some, collaborative decision making (CDM) is key, ensuring that teams co-operate to achieve win-win results. For others, it’s a matter of having good quality metrics and timely dashboards which ensure problems are addressed early. Some are choosing to build OTP into performance targets, either with contractors through service agreements, or for staff through bonuses.

The use of predictive tools is also becoming more commonplace so that data collected as passengers pass through an airport can be used for planning staffing levels or identifying passengers who are late. Where airlines and airports take the bold step of sharing data everyone has the potential to improve OTP.

Whatever approach an airline or airport takes to managing punctuality, there are no quick fixes. Achieving high levels of punctuality is a complex task and those with high OTP deserve to be congratulated.

HOW IS OTP TRACKED?

IATA DELAY CODES; WHAT ARE THEY AND WHAT DO THEY MEAN?

There are over 80 IATA delay codes, numbered 00 to 99, which were created to standardise the reporting of delays by airlines. They illustrate just how many activities need to be kept on track for an airline to maintain operations in line with the published schedule

Codes starting with ‘7’ are for weather related delays, and this may well be the type of delay that passengers experience most frequently. While it may seem at first glance that there isn’t much an airline can do to change the weather, they can certainly be better prepared. Look at de-icing, for instance (code 75). Some airlines and airports are well prepared for de-icing given that managing in conditions below zero degrees are routine for them but for others ice is an anomaly. If changes to the climate mean that this is becoming more frequent than changing processes and facilities means airlines and airports can -and should -cope better.

Code97 is for industrial action in an airline and has been the cause of some of the most persistent reductions in OTP performance in Europe, in particular, as strikes have occurred in several of the continents’ largest airlines. The typical duration of a strike and the scale of disruption that occurs, even when strike days are known in advance, often makes a marked dent in airline OTP.

On a day-to-day basis, however, it might take something much less substantial to make an individual flight late. A pilot caught up in traffic jams on the way to a shift could mean a flight is late (code 63) or delays getting an aircraft cleaned (code 35) may affect the turnaround time and cause a late departure. Given that airlines operate a network of flights, of course delays on one part of a system also have a knock-on effect elsewhere; late arriving flights can cause the aircraft to miss it’s scheduled next departure slot, and for an airline operating with tight turnaround times, the effect could ricochet through the rest of the days’ schedule for that aircraft.

While these individual events may not be predicted, we know they will happen from time to time and the more an airline or airport has planned for their occurrence, the better able it is to minimise.

OTP-MYTH BUSTING

SIZE DOESN’T MATTER

It would be easy to think that a small airport with only a handful of airline operations each hour, or a small airline, has an easier time of getting flights away on time than a large and busy airport or a major hub carrier. While there is some intuitive truth to this, there are very large airports and airports which achieve punctuality that smaller airports and airlines can only imagine. Over 85% of all flights operated by LATAM Airlines Group in 2018 were on time. Tokyo Haneda Airport, one of the Top 5 busiest airports in the world,  also operated with OTP above 85%.

IT’S NOT JUST ABOUT THE AIRLINE

There are brilliant examples of where airlines and airports work together and achieve best-in-class levels of performance. An example of this is COPA and Tocumen International Airport which serves Panama City. COPA achieved OTP of 89.79% in 2018, ranking Number 1 in the world, while Panama City ranked first among Medium sized airports with OTP of 91.11%.

Each year the Top 20 airlines for OTP includes a healthy mix of mainline airlines and low-cost airlines. In 2019 Brazilian LCC Azul was ranked the 8th best airline in the world for OTP.

AIRPORT CONGESTION

More flights have led to congestion at airports, both in the air and on the ramp in recent years. With many large airports operating hub operations with peak hours of arrivals and departures it is not unusual at some airports for flights to hold above the airport before landing whilst in some cases aircraft are even “slowed” for arrival hundreds of miles from their destination. Once landed, it is not unusual for aircraft to have to wait to cross active runways and in peak hours that can again add 15 minutes or more before arriving at the gate.

INDUSTRIAL ACTION IMPACTS OTP

Unlike adverse weather events, industrial action can last for extended periods and businesses which are subject to industrial action can see OTP fall. Every European Summer appears to bring a series of industrial disputes, ATC delays, industrial disputes at airlines around terms and conditions and go slows by handling agents all impact OTP are designed to cause maximum disruption for the airlines concerned. Such activity also damages travellers plans and, in many cases, airlines cannot plan for such events in advance.

The devil's in the detail

It takes hard work and attention to detail  for an airline to operate truly reliable schedules. Achieving a high level of on-time performance is a complex task with a myriad of variables, not all of which lie within the control of an airline. Conversely, poor OTP is often a sign of inefficiencies and weak management control of operations. 

For those airlines which succeed the rewards are tangible:

  • More flights operating according to the schedule reflects an efficient airline.
  • Inefficiencies - appearing as late flights and missed connections - cost airlines money for fuel, additional ground handling, staff payments and passenger compensation.
  • Passengers, and especially regular fliers, reward reliability with brand loyalty and repeat business.
  • Fewer delays and missed connections enhance customer satisfaction.
  • Close partnerships with airports on OTP is a pre-requisite for exceptional hub performance.

It's no wonder that airlines and airports increasingly turn to OTP as a key performance indicator for operations, for employees and in stakeholder relationships.

WHERE CAN I FIND INFORMATION ABOUT AIRLINE OTP?

MONTHLY OTP REPORTS

Each month, OAG produces an on-time performance report for all airlines and airports in the database.

ANNUAL RANKINGS Every January OAG releases its Punctuality Leaguethe world's definitive measurement of on-time performance for airlines and airports.

ACCREDITATION OTP Stars awards all airlines and airports a star rating once a year based on 12 months' rolling performance.

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