Before we explain how to save costs, let’s look at how flight costs are calculated. This will help us narrow down the problem and tackle the budget analytically.
Flight expenses are a function of 3 elements: Number of flights X Average $ per mile X Average miles per flight. If you monitor and decrease any element of the equation, your budget will go down.
1. Number of flights: factors
We are sure every company has tried and exhausted ways to minimize the number of flights, so we will only briefly mention what correlates with number of flights: duration of contracts and amount of P&I cases.
2. Average miles per flight
With proper crew change planning, you will be able to pick ports which are closer to your crew. Hence, lower mileage.
3. Average $ per mile
And this is the most important part! Let’s have a look at this chart:
These are flights we have analyzed for a series of companies that fly with us. Each dot represents a flight. On the X-axis, we have € per mile, on the Y-axis, is the booking window: the period between the date of booking and the departure date. The higher the dot, the greater the booking window. The more it is to the right, the more expensive it is.
How to save on flights
Tip 1: Don’t book one week be fore the flight
Pay attention to the shape of the distribution (blue). It suggests that when you have fewer than seven days before departure, you have a much higher chance of booking an expensive ticket. So, the first takeaway for you is this: make sure you book at least one week in advance.
Tip 2: Avoid tickets above 1 EUR per mile
Now, let’s examine the X-axis. You may see that the majority of flights fall into the category below 1 EUR; we have some flights between 1 and 2 EUR and just a few above 2 EUR. What we have concluded is that the majority of flights are below 1 EUR. And when we started looking at the most expensive ones, we saw clearly mismanaged travel planning: last-minute bookings, flights for very short distances, etc. All of this could have been avoided if travel managers or crew managers had checked the price per mile for every ticket.
Tip 3: Measure and improve
This combination of booking windows and $ per mile became a key metric and almost immediately started giving results. For example, this chart gives a quick overview of one of our customers.
Each of the crew planners has access to it and can evaluate his/her personal performance as well as the budget of all vessels. It means that they share the company’s goal: making the budget lower.