USING BENCHMARKING TO ASSESS YIELD

The benchmarking process is described in relation to airports and airlines. Part of this process involves removing non-core activities from the financial reports so that like may be compared with like. Allowance needs to be made for the contracting out of core activities if this occurs. A sample of benchmarking results is provided: average yield per passenger, operating profit per passenger and operating profit. The figures indicate that it is desirable for an airline to have a dominant position in a very large market, preferably a domestic one. The operating profits of most airlines are considered low, especially compared with airports. Data for cargo revenue per cargo tonne kilometre are also presented. The concept of an overall performance measure is examined and studies using a combination of 38 measures have been simplified so that six key measures are selected. Equal weightings are assumed for these measures in order to proceed objectively. It is suggested that statistical clustering should be used to determine which groups of airlines are suitable for comparison. The four highest performing airlines are named.