Images provided by Meike Helberger
Controlling risk by measuring risks
Avinomics provides essential tools for airline executives and professionals that finance, manufacture and insure aircraft. Our powerful key performance indicators are based on our unique ability to measure the quality of airlines’ competitive positions – or the hits they have taken in the course of the Covid-19 crisis. Our monthly indicators rely on real-time and forward-looking performance data.
Our calculations position each carrier in a matrix mapping low-cost, hub-and-spoke and hybrid strategies. More than 500 monthly data points allow us to show how hard each carrier has been hit during the pandemic and assess risks and opportunities for industry recovery. Our products come via NEXUS, proprietary software that allows clients to filter, combine and visualize our data as they please.
Stress Indicators – the measure of airlines’ strategic position
The Avinomics Stress Indicator gives aviation professionals unprecedented support in competitive benchmarking and assessing portfolio or transactional risks. Our flagship product measures the stress that arises when airlines change their strategic positioning by adapting flight, fleet and other planning as revenue management systems flag new market trends.
Looking from the present up to twelve months into the future, they quantify the stress airlines will experience as they adapt to anticipated market developments – and constitute an illuminating record of strategic hits suffered by them. Planning changes are the earliest quantifiable measure of airlines adapting to shifts in demand or competition in any one market or any number of them. Strengthening strategic positioning leads to positive stress and weakening strategic positioning to negative stress.
Seat Capacity at Risk – the only measure of airline overcapacity
Seat Capacity at Risk complements our flagship product by quantifying the level of risk and resulting potential for seat overcapacity in any market segment with unprecedented precision. An airline experiences negative stress as its strategic positioning weakens. This is the result of an airline not being able to fill its seats profitably.
In consequence, an airline experiencing negative stress is exposed to seat overcapacity risk. The higher the number of airlines exposed to Seat Capacity at Risk operating in a particular market, the higher the Seat Capacity Risk in it. Adjusting for the size of each stressed airline, Avinomics can calculate the proportion of stress-ridden seats in the industry with an entirely new precision. A rising proportion spells more trouble, a falling one potential recovery.
Market Quality – the only measure of quality of markets
Market Quality measures the quality of markets an airline is serving. Avinomics assesses the quality of each market by measuring five categories of market sustainability: growth, size, competitive intensity, seasonality, and demand quality. Market Quality is a composite index that combines individual factors like growth or competitive intensity into a single, powerful measure.
Market-quality data give a measure of the future in a way financial data cannot. An airline reporting strong financial results will hit trouble if our market-quality data shows it is serving shrinking or otherwise troubled markets. Likewise, an airline with weak financial results is heading for recovery if our data shows the quality of its markets picking up.