Importance of Cost Monitoring Solution for Airlines

The airline industry is a service industry with a low level of profitability because it is labor, capital, and technology expenses. It is also affected by external environmental changes as well as internal operations. Among other things, jet fuel is a major component of commercial airlines’ operational costs. Therefore, airline companies must always exercise cost control, especially after having experienced the extreme crude oil price increases. According to International Air Transport Association (IATA) statistics, in 2008 the global airline industry’s fuel bill in 2008 grew somewhere between $31 and 165 billion USD, and lost about $16.8 billion USD, which accounted for 31% of operating expenses at $99USD/barrel Brent of oil. Thus, improving fuel-efficiency continues to top the agenda of the airline industry. Under this challenging economic environment, operation cost control is of the utmost importance to the airline industry.

When we discuss about Operational costs, it includes a plethora of expenses that needs to be cut short. During a flight operation, there are multiple costs that needs to be pulled down in order to assure maximum profitability. These costs includes Fuel, Parking charges, covering air space charges, maintenance cost particularly. This not only helps an airline to reduce their operational costs but also helps them to attain a competitive edge in the domestic as well as International Market. This in turn plays a major role in the Revenue Management also since it helps the airlines to provide a competitive pricing to the Travel Agents through different GDS. Lets discuss few points that could help airlines reduce their cost of Operations and Manage their expenses in an organized manner:-

1)     Manage the cost of Project:-

                                                         Managing the cost of Project is one of the most important project management activities that would help us to complete the task within the estimated cost that suits the airlines. A proper guidance along with effective management objective is required by the Project Manager and the team who plays a major role in effective planning.

2)     Deciding on the Budget:-

                                         Budget planning is one of the most crucial and difficult activity to be executed. This requires a lot of Strategic planning and research. Now planning and research doesn’t necessarily mean only data available to determine the expenses as per the revenue and capital but also going back to previous expenses and experiences in terms of cost reduction and profitability. We need to keep a close eye at the competitors and understand their strategy, make comparisons and gain something out of it.

3)     Tracking the Expenses:-

                                       There should be an effective IT tool with effective resources to keep a track of the costs that is being incurred at every phase. This would help in tracking the actual cost against the estimated cost and with tracking the cost at every phase, it will help to stimulate the upcoming costs and help to manage them accordingly. This would infact allow us to take a decision if a new work can be adjusted within the objected cost.

4)     Time Management:-

                                  Although most airlines take this quite casually but it’s a fact that managing time effectively is equivalent to reducing cost. There are different phases of a Project/Operation. If there is a delay in any of the phase, it will highly affect the cost of the entire project since we need to meet the deadlines. In that case, we might need deploy more resources and make more expenses in the tools to meet the deadlines. Again this will definitely increase the cost.

This could only be attained if Airlines opt for an effective Cost Monitoring Framework which would not only be helpful to them on an internal expense perspective but it would also lead to reduction of ticket pricing for the customer and the Airline can accommodated additional services for their customers which would satisfy them more and help increase Loyal Customer base

Terrorism and Evil had their roots since 11th Century

We all are aware of the term 'Jihad'. This is the term used by the Muslim community to justify their evil deeds and proclaiming themselves to be messengers of Allah. Jihad has a clear denotation that goes on to say that they need to kill people to save their religion. If they return alive they will be contemplated as veracious towards their religion, if not their Martyrs. Now, we all feel that Jihad is the root of terrorism. 

How many of us are well versed with the term 'Crusades'? This was something that was intercepted in the 11th century by Pope Urban II. Crusades is something which is actually quite in-depth knowledge and to talk about that would consume the entire article. So lets not get into in-depth details and just get the cursory understanding of it. We all know the realm of hatred that flew among the Jews and Christians for each other since the Crucification of Jesus. Millions of lives lost, properties damaged leading to an entire massacre. Before the Christians had to finally forgive the Jews since they couldn't deny the fact that their God was also a Jew and hating Jews would be equivalent to hating their own God.  But in the 11th Century, there was a religious war that was called by Pope Urban II which clearly meant that any one who goes to Jerusalem, kills the Jews and takes the city captive would be considered true follower of Messiah and would be sent to heaven after death. Following the belief, there was a series of Religious wars that was witnessed from 11th-15th Century. Now lets understand why people know more about Jihad and not crusades. Its simply because of lack of Digitalization in the 11th Century. We didn't have media, internet, to get access to the evil that was occurring then. People considered it to be holy without being eloquent about the fact that any movement which is a reason of killing millions of people is nothing but evil. Since we are in the 21st century now and we have high access to media and internet, we know what Jihad is and curse the Muslim community. However, i am not in support of any religion and talk in terms of humanity. But if Jihad is something that makes us curse the Muslims, i guess we should be sensitive enough to curse the Christians for Crusades. There has always been hatred in this world. We used to feel that in the early days commoners used to forge a peaceful living. But studying facts in depth proves that 11th century marks the beginning of Evil and Terrorism. Never to forget the evil which was committed by the Jews, Crusades was a revenge. But understanding the manifest, reason of all terrorism is envy and revenge.

How long will this continue? Revenge is an unending affair. Honest people are being mutiliated, new born children are found dead on roads, people in Syria have no gurantee of making a living tomorrow for themselves and their families, commoners dying out of hunger and thirst. Are we becoming so selfish that we are blindfolded with the notion of revenge that we are least bothered for the lives of honest people? Remembering few lines from the song 'Heal The World' by Michael Jackson, 'There are people dying, if you care enough for the living, make a better place for you and for me'.