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ENERGY & RESOURCES LOGISTICS


TRANSFORMING FLY-IN FLY-OUT (FIFO) - PERSPECTIVES ON AN INTEGRATED BUSINESS
MODEL OF BUNDLING AIR CHARTER SERVICES AND TECHNOLOGY

Energy & Resources Logistics
Ajith Vijayakumar
Thursday, 19 May 2022

Insights from the panel discussion at IBS Energy Logistics Forum in Calgary on
26th April 2022

From left to right: Shawn Simms (Accommodation & Transportation Manager, Fluor
JFJV), Edna Brant (Vice President - Operations, ONEC Logistics), Matthew
McElligott (Vice President - Commercial, Summit Air), Chris Martin (Senior Vice
President, Wings Travel Management), Ajith Vijayakumar (Account Manager, Energy
& Resources Logistics, IBS Software), Remasankar Sivasankarannair (Vice
President, Energy & Resources Logistics, IBS Software)

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:


DEMAND FLUCTUATIONS

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.



ADVERSE WEATHER

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.

Find this content interesting? Subscribe to our blog for further updates!

--------------------------------------------------------------------------------

 AUTHOR INFO

Ajith Vijayakumar is an account manager with IBS Software' Energy and Resources
Logistics line of business, based in Houston. He helps oil & gas companies adopt
lean workflows and digitally transform their upstream logistics operations by
combining people, process and technology. He brings close to two decades of
experience working with major oil & gas corporations around the world, including
Shell, Chevron, ConocoPhillips and PTTEP. He writes about cost savings
opportunities and sustainable logistics business transformation for E&P
companies through cutting edge technologies & new business models. He can be
contacted at Ajith.Vijayakumar@ibsplc.com 

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24 May 2022
Anouchka Mahadawo, Product Consultant, Digital Innovation team, IBS Software,
Mauritius
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Transforming Fly-In Fly-Out (FIFO) - Perspectives on an integrated business
model of bundling air charter services and technology
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