Sofema Aviation Services (SAS) www.sassofia.com takes a look at the challenges of Air Carrier Cabin Reconfigurations to offer the best product related to the optimization of yield.
Introduction
The challenge of maintaining a low unit cost across the business is ever-present and of course very much applicable to the cost of maintaining the cabin environment.
It is also important for airlines to achieve the best possible balance between the customer’s perceived value of the product, the cost of maintaining the product, and the generation of profit related to the product.
Airlines paying particular attention to the premium economy product typically offer an additional 6 to 10 inches of extra legroom for a cost around double the economy seat and 60% cheaper than the business seat.
Typically, airlines do not operate in a one size fits all environment, (different routes, priorities, and segments), and whilst lowering the unit costs becomes a key strategic driver for many airlines, it is also important to focus on optimizing revenue yield which is part of the reason that Multiple Class & Configuration is often dependent on the particular operational segment, for example, leisure versus business.
Original Equipment Manufacturers (OEMs) have also recognized the rise of the premium cabin seating and cabin arrangements and typically promote a number of premium economy and business class cabin products.
However not all Cabin Refurbishments are Passenger Positive for example a recent British Airways Revamp included an increase of one seat in each economy row for a total of 10 Abreast seating 3 – 4 – 3.
Candidates for Upgrade
The Cabin environment is often the subject of either an upgrade or refurbishment with the potential for impacting any of the following systems:
- In-Flight Entertainment (IFE)
- Galley’s
- Lavatories
- Seating Type & Configuration Passenger
- Seating Type & Configuration Cabin Crew
- Monuments & Stowage’s Configuration & Position
- Cabin Management Systems
- In Seat Power Supply
- Passenger Oxygen Configuration
- Passenger Service Units
- General Lighting
- Emergency Lighting
- Carpet, Curtains
- Cabin Dividers & Partitions
- Other Ancillary Equipment
- Placards & Other Markings
Cost-Benefit Analysis Considerations
A cost-benefit analysis (also known as a benefit-cost analysis) is a process by which organizations can analyse decisions, systems or projects.
- The model is built by identifying the benefits of an action as well as the associated costs and then subtracting the costs from benefits.
- When completed, a cost-benefit analysis will yield concrete results that can be used to develop reasonable conclusions around the feasibility and/or advisability of a decision for the selection of an upgraded aircraft component or whether or not to embody a non-mandatory Service Bulletin (SB), STC or another form of modification to an aircraft.
In this way, the cost-benefit analysis offers unique and valuable insight when:
- Developing benchmarks for major technical upgrades to aircraft (E.G. Cabin Interior Modifications).
- Deciding whether to pursue fleet-wide service bulletin campaigns.
- Evaluating new or upgraded aviation products or maintenance processes.
- Appraising the desirability of suggested airworthiness or maintenance policies.
- Assessing change initiatives in terms of financial as well as Safety perspectives.
- Quantifying the effects of a proposed change on engineering & maintenance stakeholders and other aviation parties.
It is important to consider all the relevant criteria which are applicable including:
- The planned duration of the embodiment programme,
- The various regulatory, technical and organizational obligations that may need to be satisfied,
- A review of benefits to both safety, reliability as well as monetary cost.
How to do a Cost Benefit Analysis
There are no “standard” approaches for performing a cost-benefit analysis.
- Establish a framework to outline the parameters of the analysis.
- Identify costs and benefits so they can be categorized by type, and intent.
- Calculate costs and benefits across the assumed life of the programme or initiative.
- Compare cost and benefits using aggregate information.
- Analyse results and make an informed, final recommendation.
Identify and Categorize Costs & Benefits
The primary categories that costs and benefits fall into are direct/indirect, tangible/intangible, and real. The table below shows typical examples:
Direct Costs: Often associated with the production of a cost object/service/project. Acquisition of an SB/Modification/Repair &/or Associated Spares & Mod Packages.
Indirect Costs: Usually fixed in nature and may come from the overhead of a department or cost center. Overheads associated with Maintenance & Production Planning, etc.
Tangible Costs are easy to measure and quantify, and are usually related to an identifiable source or asset. Aircraft Downtime, facilities, and purchasing/rental of tools.
Intangible Costs are difficult to identify and measure. Operational Interruption Costs & Incremental fuel burn.
Compare Costs and Benefits
This facilitates the projection of the timeframe required for benefits to repay costs, also known as return on investment (ROI).
With/Without Comparison – The impact of a fleet-wide SB, modification or component replacement implementation programme can be brought into sharp focus through a basic “with/without” comparison. In other words, this is where we look at what the impact would be – on the operator, maintainer and other stakeholders, or users – both with, and without, this programme initiative.
For example:
- In determining the impact of the Cockpit Door Surveillance System (CDSS) modification on-board the Airbus A319 the number of hi-jacking attempts that may not succeed as a result of an active CDSS should be deducted from the number of failed hi-jacking attempts attributed to the presence of ‘Sky-Marshalls’ and likewise the additional costs of employing a sky-marshal for each flight would be deducted from the costs of an A319 modified with CDSS.
Summary – The alternative to the Program embodiment should be explicitly specified and considered in the evaluation of the Program.
Next Steps
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Sofema Aviation Services (SAS) provides Consultancy, Classroom, Webinar and Online Training including a 5-day EASA CS 25 Compliant Cabin Certification & Mods Training Program.
For additional details, please see our websites www.sassofia.com and www.sofemaonline.com or email team@sassofia.com
Tags:
aviation, cost effective, Cabin, SAS blogs, Aircraft Cabin, Cabin Certification, Original Equipment Manufacturers – OEM, Cabin Refurbishment, Air Carrier Cabin, Cabin Reconfigurations, Cost Benefit
