Alec Siems, Analyst, Advanced Analytics and Optimization Solutions
Reuters reported that labor costs surpassed fuel as the single biggest expense for global airliners in 2016, at 22% of costs. Airlines must attempt to minimize crew costs to survive in this highly competitive industry. One way to decrease costs is to provide forecasts to the schedulers to help make optimal last-minute assignment decisions for pilot and flight attendant reserve crews. Southwest’s schedulers are managing more open flying than ever before with limited reserve crews (i.e. on-call pilots and flight attendants) at each base. Schedulers must make decisions for the following day without knowledge of the availability of reserves or amount of open flying.
Crew scheduling relies on the scheduler’s experience and intuition to make daily reserve crew assignments. However, since August 2017, Southwest’s Advanced Analytics & Optimization Solutions team has provided forecasts to the schedulers to decrease extra crew costs associated with unassigned reserves, premium assignments, and unplanned absences or open time. The team used Alteryx - a data science and analytics platform - to build a workflow that provides these daily forecasts to schedulers taking into account reserve availability, the magnitude of flights the following day, and daily operational data and historical daily crew data.
This project has reduced uncertainty in daily crew assignment processes, helping Southwest avoid the potential of hundreds of thousands of dollars in extra costs from failure to anticipate daily changes in reserves and open flights. Schedulers can now quickly identify bases with significant reserve versus open flight imbalance and ultimately improve premium decisions to reduce overtime costs. From October 2017 to June 2018, the amount of premium open time awards decreased by approximately 25% per month on average. By releasing reserves, crew schedulers increased the percentage of savings from reserve costs by an average of approximately 6% per month. Crew Scheduling’s efforts to mitigate crew cost, including hiring more crew members and integrating analytics into their business processes, have shown significant progress since beginning efforts in 2017.