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Background


We all know that airline profitability is down. The cost of doing business is up. There are several reasons for this. Some of which are beyond our control. The price of fuel for example, is a current problem. However, one of the largest factors has crept up on us so slowly it has gone almost unnoticed. That is production variance.

Production variance means simply that it is impossible to know if a flight will take 1 hour to complete or 1.5 hours to complete. In order to maintain an "on time" operation an airline has no choice but to schedule this example flight for about 1.5 hours, "just in case". This means that the airlines production asset has just become 33% less efficient. Not a good thing for any business.

The table below summarizes the average available seat mile (ASM) hours (ASMH) for similar types of aircraft over the last 20 years. This chart makes it clear the profound impact this variance is having.



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