Transforming Fly-In Fly-Out (FIFO) - Perspectives on an integrated business model of bundling air charter services and technology
Insights from the panel discussion at IBS Energy Logistics Forum in Calgary on 26th April 2022
FIFO, the movement of workforce between their homes and remotely located worksites for energy and resources operations, is estimated to be a US$3B business with annual passenger traffic at 15M, predominantly in the Americas and Australia regions.
Despite its magnitude, the FIFO industry hasn't typically been an early adopter of technology, which translates into lost opportunities to improve seat utilization, enhance the traveler experience, increase staff productivity, and maximize revenues. Many FIFO sites still operate with wooden boarding passes, high rates of lost baggage, abnormally high no-show rates, and poor visibility on end-to-end travel and camp accommodation segments.
The solution? The panelists at IBS Energy Logistics Forum 2022 discussed potential opportunities of Bundling FIFO air charter services and logistics technology to unlock the missed opportunities for the global energy and resources industry.
Key challenges in the Fly-In Fly Out industry
As the industry continues its recovery from the pandemic, persistent challenges still affect performance, including:
FIFO demand is inherently linked to activities associated with the development of new projects, construction, and site operations. Changes in demand lead to fluctuations in the number of personnel that need to be transported.
Unpredictable weather conditions often lead to flight cancellations and rerouting, which affect the recovery of logistical operations.
Stakeholder silos and disconnect
Limited collaboration and real-time visibility across value chain stakeholders lead to under optimized site operations, air logistics, camp accommodations, bussing, and finance.
Unused seats and empty legs
High occupancy on flights during certain days of the week in synch with work shifts results in low aircraft utilization outside of peak movements.
Lack of data quality
The lack of a single data source, or even seamlessly synchronized sources, complicates decision-making across multiple areas, including coordinating with commercial flight schedules, applying different regulatory obligations, and understanding the behavior of different cost variables
Five benefits of an integrated business model that bundles air charter services and technology
The panelists spoke about the potential benefits for both the FIFO and the energy and resources industries of an integrated air charter service and technology offering. While air charter services and the technology being used across the logistical value chain have largely been decoupled, bundling the two together will allow the stakeholders to operate off a seamlessly integrated platform and unlock the following benefits:
1.Positive business outcomes for air carriers
By gaining full visibility across FIFO needs, air charter carriers can optimize aircraft utilization leading to increased revenues and margins, and enhanced customer experiences through closer business integration.
2.Business value for energy and resources operators
360o visibility on personnel logistics and field accommodations eliminates disconnects in travel and lodging processes.
3.Improved duty of care for travellers
Closer integration between logistical providers and energy and resources operators enables better end-to-end itinerary planning, more self-service and mobile capabilities, and deeper alignment between staff rotation planning and job certification compliance.
4.Real-time data insights
Breaking down the silos between value chain stakeholders is key to optimizing staff planning and asset utilization as well as responding to itinerary changes more quickly with minimal impact to costs and schedules.
5.Adopting innovative "Logistics as a Service" models:
By bundling air charter services and technology across stakeholders, each player can increase business agility through flight sharing opportunities and more accurate demand planning and capacity forecasting.
As the industry evolves to improve business performance, accelerating the adoption of new technologies, managing change effectively, and collaborating strategically across stakeholders are key to enabling innovative and more optimized business models to flourish.