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Operational Performance Management

Published on Jun 13, 2020

Jamair was founded in September 200X and is one of a growing number of low-cost airlines in the country of Bolognia. Jamair’s strategy is to operate as a low-cost, high efficiency airline, and it does this by:
–         Operating mostly in secondary cities to reduce landing costs.
–         Using only one type of aircraft in order to reduce maintenance and operational costs. These planes are leased rather than bought outright.
–         Having only one category of seat class.
–         Having no pre-allocated seats or in-flight entertainment.
–         Focusing on e-commerce with customers both booking tickets and checking in for flights online.
The airline was given an ‘on time arrival’ ranking of seventh best by the country’s aviation authority,  who rank all 50 of the country’s airlines based on the number of flights which arrive on time at their destinations. 48 Jamair flights were cancelled in 2013 compared to 35 in 2012. This increase was due to an increase in the staff absentee rate at Jamair from 3 days per staff member per year to 4·5 days.
The average ‘ground turnaround time’ for airlines in Bolognia is 50 minutes, meaning  that, on average, planes are on    the ground for cleaning, refuelling, etc. for 50 minutes before departing again. Customer satisfaction surveys have shown that 85% of customers are happy with the standard of cleanliness on Jamair’s planes.
The number of passengers carried by the airline has grown from 300,000 passengers on a total of 3,428 flights in 2007 to 920,000 passengers on 7,650 flights in 2013. The overall growth of  the  airline  has  been  helped  by  the limited route licensing policy of the Bolognia's government, which has given Jamair almost monopoly status on some of its routes. However, the government is now set to change this policy with almost immediate effect, and it has become more important than ever to monitor performance effectively.
1. For each perspective of the balanced scorecard, identify one goal together with a corresponding performance measure which could be used by Jamair to measure the company’s performance. The goals and measures  should be specifically relevant to Jamair. For each pair of goals and measures, explain why you have chosen them.   
Ref: Specimen paper ACCA

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