There are two ratios which are used to measure airline perfo

There are two ratios which are used to measure airline performance. One measures efficiency while the other measures equipment utilization. Is this sufficient? Describe two other metrics you think airlines should develop to measure performance.

Solution

There are two ratios which are used to measure airline performance. One measures efficiency while the other measures equipment utilization. Is this sufficient? Describe two other metrics you think airlines should develop to measure performance.

Answer :

In problem Efficiency (Operating Ratio) & Equipment utilization (Load Factor) have been mentioned.

Yes these are major factors of performance measurement but there are some others factors also which are important to check the performance of Aero plane.

Income / Expenditure Ratio : See its very important to analyze the figures of Income that is generated from aero plane at the same time the expenditure occurred for Aero plane. Specifically the Maintenance issues .How much maintenance took place in particular period .So each & every expenditure we can correlate with Income .So that we can easily come to know that Aero plane is doing well , is it in good condition or not ?

Speed Ratio & Mileage Ratio :

This is second important part of performance measurement.Here we can correlate the variables speed with Mileage. Some times speed is high , mileages is low , sometimes millage is high speed is low.So correct performance measure will estimate a optimum point where these two point will be together.So optimum combination of Speed & Mileages will gives a best performance.