Improving Airline Performance: A Case Study

 Key Results

• The initially proposed increase in staff was reduced by over 500 positions. 

• Availability of ground equipment such as tow tugs, air stairs, and belt conveyors saw notable improvements. 
• A rapid improvement to a very competitive on-time performance level was achieved.

Background

Established in the late 1990s, the client operates within the highly competitive Southeast Asian airline industry. Competing against world-renowned carriers such as Singapore Airlines and Thai Airways, known for their superior punctuality, the client had found it challenging to consistently attract higher-yield business travellers, often competing more in the leisure and contract worker segments of the market. Recognising the need for operational improvements to address profitability concerns, the owner and Chairman of the client sought external expertise. 

 The Challenge

The owner and Chairman of the client was confronted with the issue of unacceptable profitability despite an anticipated surge in passenger numbers during the upcoming summer period. In response to this, the management team requested a substantial increase in staffing, proposing an addition of over 600 personnel. However, the owner and Chairman, having learned of successful consulting work undertaken by Renoir Consulting in the Philippines, commissioned them to conduct an analysis of the Manila operation. The primary objective was to gain a deeper understanding of the underlying issues and explore alternative solutions before committing to such a significant increase in staff. A key contributing factor to the profitability challenge was the client’s less competitive on-time performance compared to its major rivals, which negatively impacted its ability to secure and retain higher-yield business.

What We Did

Renoir Consulting implemented a methodology focused on actively engaging the client’s workforce to ensure they understood and took ownership of the solutions. This involved delivering highly practical workshops alongside on-the-job training and coaching, designed to foster real and sustainable improvements. World-class maintenance programmes were implemented, and small management action teams were formed, who enthusiastically committed to transforming the operation. Renoir’s initial engagement, which commenced in terminal operations, was subsequently extended to encompass cargo and maintenance functions. This expansion indicated growing confidence in Renoir’s capabilities and the value of their contribution.

The Results

The analysis conducted by Renoir demonstrated that the initially proposed increase of over 600 staff could be reduced by more than 500, provided that specific operational changes, particularly in maintenance and cargo performance, were implemented. The actual required staffing levels following Renoir’s intervention were significantly lower across international, domestic, and cargo operations. Furthermore, the implementation of improved processes and management systems led to enhanced utilisation of ground equipment across various categories, including tow tugs (from 61.4% to 82.2%), air stairs (from 81.7% to 90.1%), belt conveyors (from 75.2% to 97.5%), lower deck conveyors (from 74.1% to 99.0%), and shuttle buses (from 60.1% to 76.3%).  

Crucially, the client achieved a rapid improvement in its on-time performance, reaching a highly competitive standard. This improved reliability not only enhanced operational efficiency but also resulted in better retention of passengers paying higher fares. As a further indication of the success of the collaboration, Renoir was subsequently engaged to work with the owner and Chairman again in a second project, and the financial and operational outcomes of the project were described as “staggering”.