Airlines to Tel Aviv and financial metrics

I love a good metric, one that provides critical insight into how a business is operating in one glance. It is never the whole story, there are always caveats, but the usage of the right metric is incredibly insightful (and, for lax management, “inciteful”). It can also lead to a dramatic change in behaviour. I once proposed a “Deployment Velocity” metric for a cloud company: +1 for every successful deployment, -1 for every deployment that: has deployment issues, does not solve what it is supposed to solve, or break anything that worked before. When the head of app dev said, “that’s no good, we will just game the system by doing lots of small deployments!” I just smiled…

Two weeks ago, the three Israel-based carriers – Arkia, Israir and El Al – went on strike for two days to protest the government’s adoption of an Open Skies agreement with the EU. Although they claimed they wanted to protect their workers, they were surprisingly open about how the competition would hurt their jobs because it would lower prices and spur increased demand in EU-Israel flights… i.e. it would benefit the consumer.

Unsurprisingly, the flying public was up in arms, against the striking workers rather than the government for adopting measures that opened them up to more competition. It appears that the workers were surprised at the level of resentment towards them, expecting the public to fall in line.

My excellent travel agent and owner at Ziontours, Mark Feldman, published an article, at the very end of which he looks at the cost levels of El Al, the major Israeli long-haul airline, and its two largest US-based competitors, United Airlines and US Air. Rather than comparing prices, frequency of flights, partner network or quality of aircraft – all of which are valid for the revenue side of the house – Mark compares the average employee per airplane, which shows the level of efficiency. And, inevitably, a more efficient airline can afford to put more of its revenue into customer-facing investments, thus increasing its revenues, and so forth.

Here are the numbers. Employees include air crew, ground crew, sales, marketing, operations, maintenance, etc.:

  • United: 88,253 employees and 1,258 aircraft, for an average of just over 70 employees per plane.
  • US Air: 36,500 employees and 640 aircraft, for an average of 57 employees per plane.
  • El Al: 6,000 employees and 38 aircraft, for an average of 158 employees per plane.

The numbers speak for themselves.

About Avi Deitcher

Avi Deitcher is a technology business consultant who lives to dramatically improve fast-moving and fast-growing companies. He writes regularly on this blog, and can be reached via Facebook, Twitter and avi@atomicinc.com.
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