The challenges faced by finance, planning, and analysis (FP&A) teams in the airline industry have evolved significantly in recent years. Industries reliant on customer proximity—such as hospitality, cinemas, and travel—continue to contend with uncertainty, making effective planning and forecasting exceptionally complex. While this discussion focuses on air travel, its insights are broadly applicable across these sectors.
The Impact of uncertainty on Air Travel
The airline industry has experienced severe disruptions, affecting both passenger travel and air freight. Passenger air transport, measured by revenue passenger kilometres, saw dramatic declines during the height of COVID-19 restrictions. Similarly, air freight faced initial setbacks before stabilising, although challenges persist. These disruptions placed airlines, airports, and ancillary service providers under immense financial pressure as they awaited recovery.
During periods of low demand, airlines encountered operational challenges, including:
- Aircraft Storage and Maintenance: Mothballing aircraft required logistical planning and incurred costs to ensure readiness for future use.
- Workforce Management: Navigating furloughs, redundancies, and retaining key staff while preparing for rehiring and retraining.
As demand recovered, airlines faced new obstacles:
- Reactivating fleets and re-establishing routes.
- Scaling up staffing levels for pilots, cabin crew, and ground operations.
- Managing heightened customer expectations alongside supply chain disruptions and evolving health and safety requirements.
This balancing act—adapting to surges in demand while controlling costs—highlights the importance of agility in operational and financial planning.
Navigating Uncertainty: Key Challenges for FP&A Teams
The recovery of the industry has introduced new cost pressures and operational complexities.
Fuel Costs
Volatility in jet fuel prices remains a significant expense, driven by geopolitical tensions, supply chain issues, and global inflation. Sophisticated fuel hedging strategies and cost optimisation measures are crucial in managing these fluctuations.
Labour Costs and Workforce Management
Rebuilding the workforce has proven costly due to competitive hiring markets, higher wages, and extensive training requirements. Bottlenecks in airport operations and maintenance have further complicated recovery efforts.
Fleet Maintenance and Upgrades
Deferred maintenance during fleet grounding has increased reactivation costs. Investments in fuel-efficient aircraft, though essential for sustainability and regulatory compliance, place additional strain on budgets in the short term.
Health and Safety Compliance
Enhanced health protocols remain in place, requiring investment in cleaning processes, air filtration upgrades, and passenger communication measures to maintain compliance and customer trust.
Inflation and Supply Chain Disruptions
Economic inflation has driven up costs for equipment, catering, and airport fees, while supply chain disruptions have delayed essential materials and services, increasing expenses.
Sustainability Pressures
Regulatory and consumer demands for sustainability are prompting airlines to invest in greener technologies, sustainable aviation fuels (SAFs), and carbon offset programmes. While vital for long-term viability, these initiatives impose significant short-term costs.
Demand Volatility and Capacity Utilisation
Unpredictable passenger volumes require careful capacity and pricing strategies to optimise revenue while avoiding underutilised assets.
Maximising Flight Route and Network Contribution
Optimising flight route and network profitability can yield significant financial returns. For example, improving the contribution of a single flight by just 1% could translate into millions in additional annual profit. Advanced financial analytics now enable near real-time profitability analysis, supporting dynamic planning and actionable insights.
Granular Insights for Decision-Making
Detailed flight-level profitability data informs decisions on scheduling, pricing, and network optimisation. Airlines can evaluate individual flights not only for direct revenue but also for their contribution to the broader network, such as enabling connecting traffic.
Limitations of Traditional Planning Systems
Traditional planning systems are inadequate for today’s dynamic airline environment. These systems:
- Lack the flexibility to perform rapid scenario analysis.
- Depend on error-prone, static spreadsheets that hinder collaboration.
- Struggle to meet the data-intensive demands of modern airline operations.
the solution: Connected planning with anaplan
Modern, cloud-based platforms such as Anaplan provide the agility and precision required for effective FP&A in the airline industry. Key benefits include:
- Centralised Data: A unified repository for secure, global access.
- Flexibility: Adaptable planning models for dynamic scenario analysis.
- Automation: Streamlined forecasting, budgeting, and reporting to reduce errors.
- Collaboration: Real-time teamwork for better alignment and decision-making.
Anaplan has helped various airlines replace thousands of spreadsheets with a single model, enabling rapid scenario analysis and improved decision-making. This has been particularly beneficial for integrating workforce planning with financial planning, and budgeting in the airline travel industry.
Real-World Success Stories
Brussels Airlines
Brussels Airlines replaced traditional spreadsheets with Anaplan’s flexible, real-time planning and budgeting platform to navigate the complexities of airline operations. By integrating vast data volumes into a single driver-based model, the airline achieved faster scenario analysis, improved forecast accuracy, and enhanced decision-making capabilities. This agile solution reduced the time needed for model adjustments and rollouts, empowering the finance team to manage fluctuations in market demand, currency rates, and operational capacity efficiently. With a streamlined process, Brussels Airlines improved collaboration across its global network and adapted swiftly to the dynamic aviation industry. See here for more on this story.
United Airlines
United Airlines has significantly improved its financial planning and operational efficiency by adopting Anaplan. Previously, the company relied on time-consuming, error-prone Excel processes to manage forecasting, budgeting, and variance reporting. Station managers, for example, would spend excessive time once a year relearning and completing hyper-detailed budget tasks. With Anaplan, these tasks are streamlined into smaller, monthly updates, saving time and reducing friction.
Anaplan offers United Airlines a centralised yet collaborative platform that replaces decentralised Excel files. It allows for instant data roll-ups and real-time collaboration across teams, accessible from anywhere with an internet connection. Operational partners can easily retrieve the information they need through customisable dashboards and modules, enabling faster, more informed decision-making.
The adoption of Anaplan is expected to save the airline up to two months of manual process work annually while enhancing forecasting accuracy, improving budgeting processes, and promoting three-dimensional planning. Anaplan's flexibility and ease of use empower United Airlines’ finance team to better support operational partners and optimise resources for a more agile and efficient organisation. Hear how the FP&A Team use this application here.
Gatwick Airport
London Gatwick Airport transformed its operational forecasting and resource planning by adopting Anaplan, achieving remarkable improvements in efficiency and accuracy. Transitioning from manual spreadsheet-based processes, the airport reduced forecasting time by 50%, increased forecast accuracy to 95%, and identified £1 million in annual operational savings. Anaplan’s real-time data integration enabled Gatwick to optimise passenger flow, adjust resources dynamically, and enhance decision-making during disruptions. This agility has improved passenger experiences, supported cost management, and laid the foundation for future growth and sustainability, including Gatwick's goal to reach net zero carbon emissions by 2030. Read the full story here.
Looking Ahead
As the airline industry evolves, adopting modern planning solutions is no longer optional—it is essential. Platforms such as Anaplan empower airlines with the tools needed to navigate uncertainty, scale operations, and remain competitive in a rapidly changing environment.
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