Most companies have various departments that answer to the executive suite, and these departments–with the exception of flight departments–generally use some kind of robust reporting system, according to Jim Lara, long-time business aviation pilot and consultant at Gray Stone Advisors. “We decided to develop a business aviation-based metrics package, customized for each operation.” The idea was to give the reporting executive the tools to make an effective presentation to top leaders with the same level of fidelity as reports from other business operating units. The result is Gray Stone’s aviation performance dashboard.
The dashboard gathers key information and delivers it to the reporting executive who oversees the flight department. To be effective for the reporting executive, according to Lara, the dashboard has to generate a flight-department status report in only two seconds and measure the parameters that really matter.
“Our goal is to take data and turn it into knowledge, thereby providing a diagnostic tool,” Lara explained. The dashboard starts with a summary of the flight department metrics. In the demonstration that Gray Stone provided to AIN, the metrics focused on safety, financials, traveler service and aircraft utilization. Each of these is summarized by a simple gauge, which shows below plan when the needle is on the left (red) and above plan on the right (green). The user can drill down into each of those focus areas for more detail.
In the safety section, the metrics come from the demo client’s participation in the Baldwin Aviation safety management system (SMS). Three operations areas–flight, hangar and ground–are summarized, as well as recent SMS submissions and the age of the data and Baldwin numbers for current risk factor, peer-group risk factor and risk reduction index in easy-to-interpret colorized bar graphs.
The financial summary begins with the latest monthly results (actual versus budget) and a cumulative expense summary chart for the past year with a variance plot showing the flight department’s performance above or below plan. The next slide shows cost per flight hour and number of hours flown on a monthly and rolling 12-month basis, including actual versus budgeted. This can help managers quickly identify a budget exceedance, and they can drill deeper into the figures to determine the source of a large variance.
Fuel costs are a key metric, and the demo compares the wholesale price (provided by Platts) to actual price paid and retail prices from GlobalAir.com. According to Jay Povlin, Gray Stone senior advisor of marketing and analytics, this answers a key question: how efficiently are you purchasing your fuel? The company used in the demonstration saved nearly $30,000 in one month of flying, when comparing retail fuel prices to the amount paid. But there were tens of thousands of dollars sitting ripe for the taking between the paid amount and the wholesale cost. “This is one that gets a lot of reporting executives fired up,” he said. “Any time you put [that much money] on the table, they want to go after it.”
“When the reporting executive asks the aviation manager or executive, ‘So how are you creating value for the shareholders?’” added Lara, “this is one of the areas that can be pointed to directly. That’s how you show the creation of value. You can have an intelligent conversation based upon facts, not based upon conjecture.”
The “traveler service levels” category summarizes factors that relate to the quality of service provided to the aircraft user. This category helps the flight department focus on factors that affect the passenger and motivates improvement. “We advise our clients to start off a little loose,” said Lara, “then gradually raise the bar. This goes back to an age-old quality management technique of ‘what gets measured [is] what gets improved.’ So by focusing the spotlight on these items, we’re finding that they can drive improvement in the organization.”
The utilization dashboard screens provide slices of useful information, which might point to the need for more or fewer aircraft or to a different way to use aircraft effectively. The Gray Stone demo showed a flight department using three utilization screens: fiscal year to date (FYTD) usage, flight hours and utilization rate; FYTD days of simultaneous use; and utilization by category-hours.
In the usage screen, this department’s aircraft flew missions 41.5 percent of the days of the year. The rest of the time they were in maintenance (3.7 percent) or idle (54.8 percent). There is no judgment attached to these numbers; it’s up to the company to decide how to fly most effectively. “Some clients like to have on-demand aircraft to use as a strategic weapon if they want to go out and accomplish things,” Povlin explained.
The simultaneous-use chart is even more telling. “Here’s where we show the actual need for the aircraft,” he said. In this example, the entire fleet of four aircraft sat idle for 60 days of the year and there were only 12 days when all four aircraft were flying.
This allows the company to ask whether it makes sense to have that many aircraft available for few opportunities. “It might be a resounding yes, or it might be no,” said Lara. “At least it allows the intelligent question to be asked and answered.”
The category utilization chart splits the flight time into actual types of usage, such as executive or board of directors transport, deadhead flight time, customer trips and maintenance. If deadheads are seen as inefficient, this chart can spur exploration of the subject.
The Gray Stone dashboard can gather information from a variety of sources. Gray Stone has also developed a data mining utility that extracts information from the Ascend Flight Operations System (FOS, now owned by Rockwell Collins) operations software program. Gray Stone also works with FlightApps, which supports FOS users.
Gray Stone can show company aircraft users how small decisions can have a big effect on costs. For one client, Gray Stone charted fuel consumption against the tradeoff in time, illustrating in simple terms how flying fast on a cross-country trip would save about a dozen minutes but burn additional fuel, versus flying a little more slowly and burning much less fuel. “We say, ‘Here are the facts; make your decision,’” Lara said.
Gray Stone charges by the hour or day for its work, and much of that is involved in setting up the metrics for each client. “This is not one-size-fits-all,” said Lara. “It’s a customized solution, focused on the informational needs of each one of our clients.” Ongoing charges are about $2,000 to $3,000 a month to start with and depending on the amount of reporting that is required.
While the Gray Stone dashboard delivers an instant snapshot of the flight department metrics, it isn’t intended to be a real-time view of the operation. The data is updated once a month, which is usually all the reporting executive needs. As Povlin put it, “This is essentially a rear view, not live data.”