European flag carrier cost and KPI benchmarking
At the time our client was emerging from a major profit improvement and cost reduction programme, and enlisted the help of Nyras to identify areas for further cost saving. We successfully completed a competitive benchmark of the airline’s short and long haul unit costs against a selection of industry leading LCC and leisure carriers competing in the same markets. Our benchmarking analysis was informed by specialist ‘shallow’ dives into the sales, distribution, IT, maintenance, airport charges and handling cost areas. The final cost reduction recommendations and report from Nyras included a ‘bridging exercise’ that fully explained the main drivers of relative cost performance.
Evaluation for a Private Equity firm of the attractiveness to potential acquirers
Nyras undertook an assignment for the current owners of a major European leisure carrier to evaluate the relative attractiveness of its investment asset to potential acquirers. A key element of this assignment was to complete a like for like comparison of the cost base of this airline with three other airlines in the same region to illustrate the relative competitiveness of the airline’s cost base.
Internal cost benchmarking exercise for a regional European airline
Nyras was engaged by a regional European airline that was in the midst of a wider restructuring process when the Finance Director requested a high-level competitor cost benchmarking exercise to inform their strategic decision making. Our client’s business consisted of a range of different commercial arrangements with other carriers, which made it difficult to assess the financial performance of the underlying core business. Our experience helped cut through the complexity of these arrangements in order to complete a segmentation of the airline’s business in terms of route and contractual profitability, which was then used as a basis for benchmarking unit costs against competitors.
Cost benchmarking exercise as part of merger discussions
Nyras were the aviation advisers to a major airline undertaking merger and joint venture discussions with another carrier. The client requested a benchmark of the target airline’s cost base against its own costs in order to evaluate the benefits of the potential deal under consideration.
Aircraft type cost analysis for an airport investor looking to purchase
As part of a potential transaction Nyras was acting as advisor to an airport investor that was evaluating the attractiveness and viability of purchasing a major international airport from which regional jets operated. Our client asked for a benchmark of the relative unit operating cost of different generic aircraft types (turboprops, regional jets and narrowbody jets) to help inform a view on the relative profitability of the airlines operating from this niche airport.
External cost benchmarking for a leisure airline group
Nyras undertook a comprehensive cost benchmarking exercise across five airlines within an airline group that provided a ‘like for like‘ comparison internally as well as externally with a leading LCC competitor. Our report and output was used to drive through organisation and process re-design across the group, set future cost reduction targets as well as drive through changes with the workforce and Trades Union representatives.
Ground handling benchmark against value carriers
We have worked for a number of airlines to assess the efficiency of both their in-house ground handling and external ground handling contracts. Our knowledge of both LCC type and legacy airline operations has been used to benchmark airline performance and establish key cost and efficiency differences that are then used to drive through efficiency improvements. We have developed approaches that can allow legacy airlines to move ground operations from a traditional approach to a value approach as appropriate for the market the client is operating in. Such assignments have been conducted in both Europe and Asia Pacific.