Aviation has always been quite the successful industry. After all, a lot of people turn to aviation when it comes to comfortable and speedy travel. This is the primary reason why aviation companies are quite successful as well. With the millions of people flying from one destination to another all over the world, it no longer comes as a surprise why the industry garners billions in terms of profit and revenue. However, none of these would be achieved without the appropriate implementation of the aviation scorecard.
Just what is this scorecard? And is it really needed in the industry of aviation? The quick answer to the second question is a resounding yes. The scorecard is indeed very much needed in the industry of aviation. But just what is this exactly?
By definition, a scorecard contains quantifiable aspects that are used to measure the performance of a particular industry, when compared to corporate goals and objectives. These quantifiable aspects are also known as metrics. When you place these metrics in the context of aviation, then these would be the aspects that are used to measure the performance of the aviation company.
You may think to yourself that it is not that important for an aviation company to keep track of their performance. This is not true at all. By keeping track of the performance of each department in the aviation industry, you can actually pinpoint certain aspects that you need to watch out for. By keeping a close eye on performance, you can then avoid losing millions of dollars in profit because the chances of you making wrong decisions would become considerably fewer. Negligence would also be significantly reduced, as well as mismanagement.
For the scorecard to be balanced, there are four important metric to be included: Available seat miles (ASM), Cost per available seat mile (CASM), revenue per available seat mile (RASM), and break-even load factor.
ASM involves the paid seats in a flight, and the distance that these seats can take their passengers. To obtain this mathematical figure, you have to multiply the number of paid seats by the distance that the seats are carried during the flight. The unit for distance should be in miles here.
CASM, on the other hand, pertains to the calculation of operating expenses. You can get this value by dividing operating costs by vacant sea miles. As for RASM, you have to calculate the total sum of passenger income first. Once you have this figure, you should then divide it by vacant seat miles. For the most part, the figure you obtain here comes in the format of cents.
The last metric to be included in the scorecard is the break-even load factor. Just as the name suggests, you need to calculate the percentage of seats that should be occupied just so the expenses of flying these seats themselves can be covered or matched. This way, a break-even balance between costs and revenue is achieved.
These are the commonly used metrics on the typical aviation scorecard. By keeping a close eye on these metrics, it would no longer be too hard for any aviation company to realize its goals.