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HOME > BUSINESS INTELLIGENCE > KEY PERFORMANCE INDICATORS
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Key Performance Indicators for ACMI Airlines
-DJ Ghosh, President, American Friendship World Air Cargo Corporation
   


General Performance Indicators


• Hours flown per aircraft.
• Reliability percentage – number of delays (departure more than 15 minutes late) attributable to us divided by total number of flights. This can be further segregated into those caused by maintenance and those caused by other factors. Looking at total delays (including those caused by customers) provides insight into other cost areas, as more disruptions typically drive higher costs. Customer satisfaction is affected by delays caused by us.


Pricing

• Need to ensure that an appropriate margin is earned on each transaction, taking into account all

DJ Ghosh

expected costs of that particular operation and covering overhead. Competitive pricing in the market also needs to be taken into account to determine whether it makes sense to do a particular transaction or not.
• Guaranteed monthly minimum hours is essential if an aircraft is to be committed.
• Pricing needs to be adjusted to account for changes in the operation from that originally contracted, and needs to escalate annually to cover standard increases in underlying costs. As much as possible, dollar amounts for adjustments should be specified in the ACMI agreement.

Aircraft Costs

• These generally comprise, debt, depreciation, and/or lease payments. In some respects they are what they are, but it’s critical that they be no more than market at the time the deals are done and that things like maintenance reserve payments accurately reflect the expected cost of the underlying maintenance..


Crew Costs

Key indicators are:
• Number of crews/crewmembers per aircraft.
• Hours paid divided by hours flown.
• Overtime hours per employee.
• Number of employees flying below contractual minimums and number flying above (are we paying overtime, but underutilizing other
   people).
• Travel and living costs per employee.
• Comparisons with competitors’ costs where available.


Maintenance Costs

Key indicators are:

• Number of maintenance personnel per aircraft.
• Overtime hours per employee.
• Travel and living costs per employee.
• Third party maintenance cost per aircraft.
• Parts cost per aircraft and per hour flown.
• Total maintenance cost per aircraft and per hour flown.
• Downtime attributable to scheduled maintenance.
• Downtime attributable to unscheduled maintenance.
• Comparisons with competitors’ costs where available.


Overhead Costs

Key indicators are:
• Cost per aircraft, cost per block hour, and cost as a percentage of revenue.
• Travel and living cost per employee.
• Comparisons with competitors’ costs where available.


 
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