Managing an airline is like walking a tightrope

Airlines struggle to make a profit…always. Any miscalculation may be economically disastrous. Airlines cannot change the aircraft in their fleet or the timings of flights quickly, and the demand for seats is unpredictable. Success, in terms of profitability, depends upon collaboration between operating, commercial, engineering, and financial activities.

Pilots perfect their skills using simulators. Now, airline managers can use a simulator too. SkyChess is a business simulation game that enables teams of airlines, all competing in the same market, to test their skills without risking a calamity. SkyChess can be played online or in a ‘live’ environment.

A typical SkyChess simulation involves three teams, each managing their own fictitious airline. Teams make a series of inputs for a quarterly period of operation. After a prescribed period of time the game is paused while the software calculates the results. Then, the teams move on to the next period, until the specified number of quarterly periods is reached.

Playing SkyChess hones skills in decision-making, organisation, and negotiation. Players are also expected to be creative in finding solutions to crises that the gamemasters might throw into the mix. Every new SkyChess simulation requires team players to hold specific responsibilities such as market analysis, economics, scheduling of flights, and negotiation. Each team must have a Chief Executive Officer to take the credit, as well as the blame.

At the end of the game, the gamemasters prepare and deliver a debriefing, along with a commentary of what went well, and what didn’t. Players learn from their mistakes and have an opportunity to throw themselves into a subject that might take them outside their experience or comfort zone. The gamemasters nominate a winning team after each simulation.

Results of SkyChess simulations:
The simulation has been performed on 160 occasions since 2018, involving over 3,500 participants drawn from airlines, lessors, airframe manufacturers, engine manufacturers, and regulators. Each simulation has been conducted from an identical starting point, yet the achievements of the players vary considerably. An analysis of results from a collection of simulations will be shown. The results compare outcomes in terms of passenger traffic flown, routes operated, fleet composition, profitability, cash generated, market share, and load factors.

Scope of research:
Three areas of research have been identified and are the subject of an ongoing doctoral research programme at City St Georges University, London.
1. Articulate the theoretical model to reveal the impact of aircraft assignment decisions in a holistic, or systems, context.
2. Extract the added value of improved decision-making in terms of economic value to an airline business whilst meeting sustainability targets.
3. Develop and demonstrate a fresh and intuitive pedagogy to support airline business decision-making frameworks.

Preliminary findings, based upon over 150 trials, indicate a dramatically broad array of outcomes from a common starting point. The research aims to reveal optimum decision-making pathways and understand how SkyChess participants formulate their decisions in the face of a mixture of known and unexpected variables.

Keywords: Simulation, decision-making, game-based learning.