Airline Network Planning And Simulation

NetWorks® Planning
and Simulation Model
A Best-in-Class QSI Model Combining
Powerful Algorithms, Ease of Use and
Practical Applications
August 2017
Prepared For:

ICF proprietary and confidential. Do not copy, distribute, or disclose.ICF proprietary and confidential. Do not copy, distribute, or disclose.ICF proprietary and confidential. Do not copy, distribute, or disclose.
ICF introduction
10/1/2018
NetWorks® Planning and Simulation Model
2
Let’s make big things possible.
Airports | Airlines | Aerospace and Maintenance | Aircraft
Consulting for the
Global Aviation Industry
Helping you manage
assets and operations,
mitigate risk, and maximize
return on investment.

ICF introduction
10/1/2018
3
Serving the
Aviation
Community
Since 1963
Broad Perspective.
Compelling Results.
ICF offers our team of nearly 100 aviation experts dedicated to
strategic and operations consulting for the aviation industry. Our
aviation practice was founded as SH&E in 1963 and expanded with
the acquisition of AeroStrategy in 2011. Today we are one of the
world’s largest aviation consulting organizations. We provide objective,
independent commercial, financial, technical, and regulatory guidance
to aviation clients, including airlines, airports, lessors, financial
institutions, manufacturers, governments, and VIPs. From our offices
around the globe, ICF helps aviation clients manage assets and
operations, mitigate risk, and maximize return on investment.
Visit us online at icf.com/aviation.
ICF Aviation
Comprehensive Services:
 Airlines
Fleet and network planning, pricing
and revenue management, OTP and
operational efficiency
 Airports
Strategic planning, policy, route
development, concessions planning
 Aircraft
Valuations, cash flow forecasts, portfolio
due diligence, market analysis,
technical services
 Aerospace & MRO
Operations assessment, M&A support,
marketing analysis

Network simulation enables airlines to reduce financial
exposure and risk
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Who uses NetWorks®?
 Schedule and network planners
 Airline strategists
 Fleet and capacity managers
 Revenue planners
 Alliances
 Regional managers (e.g., sales teams)
Network & Schedule Analysis
systems and services
…to help them better understand their network’s strengths and
weaknesses—by itself and against its competitors

NetWorks® is a network planning and traffic flow
modelling tool that integrates all available data
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Sources: OAG
or Innovata
Sources: US DOT
DB1a, MIDT, IATA
PaxIS, TCH, host
airline and/or
estimates based on
yield curves
Sources: US DOT
DB1a, MIDT, IATA
PaxIS, TCH, other
data collected by
governments (for
example, Customs &
Immigration), and/or
estimates
Sources: Host airline,
US DOT Form 41,
AEA RB8, Boeing,
Airbus,
IATA Airport & Air
Navigation Charges,
and/or estimates
Aircraft capacity
& configuration
by type, by airline
Sources: ICF, ACAS
Sources: OAG or Innovata
Source: Host airline
O&D Market
Traffic Data
Host Airline
Passenger
Data
Host Airline &
Other Airline
Schedules
Market and/or
Host Airline
Fares
Host Airline
Unit Operating
Costs
Aircraft
Information
(Subfleet)
Minimum &
Maximum
Connecting
Times

NetWorks® is a powerful airline route network
simulation tool
 Realistic origin-destination
(O&D) orientation
 Handles thousands of O&D
city-pair and/or airport-pair markets
 State of the art algorithms:
 Service generation
 Share estimation
 Traffic allocation
 Powerful views:
 Market
 Station
 Flight
 Network
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 Network perspective:
 Traffic
 Revenue
 Cost
 Profitability
 Interactive schedule
evaluation
 “What if” scenarios

NetWorks® is based on a quality of service index (QSI)
model, an airline industry-accepted methodology
The NetWorks® Competitive Service Index (CSI) quantifies the quality of a
specific airline services in a O&D using different variables
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 Frequency
 Aircraft size
 Service type:
• Direct vs. connect vs.
change-of-gauge
• On-line vs. interline vs.
code share
 Number of connections en-route
 Number of stops en-route
 Elapsed trip time
 Service freedom
• E.g., 3rd, 4th, 5th, 6th, 7th freedom
 Time-of-day and day-of-week
 Carrier/product preferences
• Can model passenger preference
for low cost carriers, for example

The NetWorks® model underpins a complex schedule
scenario analysis process
The ability to model and test several scenarios with minimal time cost makes
NetWorks® an integral part of network planning and scheduling decisions
Scenario
Definition
Input
Creation
Output
Evaluation
Analysis
Preparation
Results,
Recommendations

Generate and model scenarios, before evaluating results
Key simulation stages:
Algorithm can process
thousands of markets
efficiently
Service Generation:
• Determines all feasible service offerings in each relevant O&D
city/airport-pair market, for your airline and your competitors
• Nonstop, direct & connect
• On-line, interline, and code share
• Takes into account connecting time & circuity limitations
Share Estimation:
• NetWorks® estimates an “entitlement share” of each O&D
market for each airline
• Based on a comparison of service offerings in each market
Traffic Allocation:
• Traffic is allocated to individual flights based on the
“entitlement share”, adjusting for spill
• NetWorks® contains a realistic spill model which iteratively
spills traffic to alternative flights as capacity limits are
approached
Results
• Typically, several scenarios are generated, with comparisons
made to both the baseline and against each other
• Recommendations are based on a combination of model
outputs and practical considerations

Model relationships with multiple carriers:
Codeshares, alliances, and joint ventures
NetWorks® has a variety of code share
tools to help create or break code shares
 Create a code share at any point
 All destinations
 Single leg destinations
 User-selected destinations
 Delete codeshares with a carrier
Source : BA.com MAD-LAX
JFK LHR
Add/remove codes
Route Specific
Carrier Specific
Add/remove airline relationships

Capture alliance and JV memberships and run “what if”
scenarios
Specify an alliance or joint venture
for any airline
 Connections are deemed to be ‘on-line’
 Reporting can be done for the combined carriers
1. Specify base
carrier and
markets 2. Specify
partners
3. Code shares
createdNetWorks® Planning and Simulation Model

Perform further evaluations and provide market insights
 Terminal re-locations
 Evaluate potential revenue uplift of re-location,
or moving flights between terminals
 Impact of MCT changes
 Which incremental revenues/flows would
benefit and which would be impacted
negatively
 Revenue planning
 Provide insight on which points of sale have
significant flows to destinations, e.g., for new
route planning/forecasting
 Market performance
 NetWorks® models O&Ds and will provide
information on competitor performance
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50%
25%
10%
15%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pax
Onboard
O&Ds
Other
Asia
Europe
P2P

Proven adaptability and innovation
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 ICF’s NetWorks® has proven capability
to address all major areas an airline
could seek to model and analyze
 Each area of interest—market data,
speed and flexibility, cabin modeling,
etc.—has been demonstrated in the
slides and scenarios
 Airlines such as Copa, British Airways
and Virgin Atlantic have successfully
used NetWorks®
 Our own extensive use of NetWorks®,
and a strong ICF aviation team of
expertise, are core to our offering
Code Shares
Joint
Ventures
Alliance
Entry/Exit
Schedule
Changes
Mergers
Fleet
Changes
Market Size
Changes

The cost module in NetWorks® can be customized to the
individual needs of your airline
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The cost
allocation will
reflect the cost
drivers and
allocation of
each individual
carrier based on
their route
profitability
reports
 Sector aircraft costs
 Catering, navigation, ancillary revenue
 Station costs
 Fuel, taxes
 Station aircraft costs
 Landing, meteorology, handling, others
 Aircraft costs
 Cockpit and cabin crew, maintenance, depreciation,
spare parts, engines, leases
 Commissions
 Passengers, cargo, duty free

ICF NetWorks® network planning advantages
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 Best-in-class tools that enable current
production, as well as evaluation of
future strategies
 Sophisticated, capable and flexible
 Transparent approach, algorithms and use
 Easily integrated with other systems
(plays nicely with others)
 Reliable and technically robust
 Stand-alone model (no need of a server)
 Interacts very easily with Microsoft Excel®
 Pragmatic and practical implementation
 By and with airline professionals
 Hands-on implementation and regularly
scheduled, continuing support from
practitioners who use the tool themselves

Station activity report
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Helps to identify bank structure
(behavior inbound and
outbound to identify flows)
This report shows not only the
target carrier flights operational
and market and also
competition
This report also shows
multistep flights with up to 3
segments
SAMPLE

The NetWorks® model covers different sources of
information to help in the process of developing a
schedule
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Minimum Connecting Times
Time Zones/Daylight Saving
SAMPLE

Market summary report
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Helps to identify top 5 competitors in each O&D market, the demand in the market and the CSI share
for each carrier in the O&D market including all connections and direct services
SAMPLE

Flight summary report
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Provides major KPIs by flight and also
provides the network revenue
contribution, main factor for a hub
carrier when deciding the value of a
route
SAMPLE

Service detail report
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SAMPLE
Lists all services
generated for a specific
O&D with various metrics

Flight detail report
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SAMPLE
Identify all connecting markets
for the flight, number of local
and connecting passengers and
prorated revenue by flight

Traffic detail report
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Details passengers by day of
week for local and connecting
traffic, specifying the
connecting flights and potential
interline partners
SAMPLE

Customized reports in NetWorks®
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NetWorks® has the capability
to create customized reports
for the needs of the client
that includes filters to access
the data required for each
analysis, ranging from the
highest detail or aggregated
either by O&D or flight leg
SAMPLE

For more information, contact:
Jared Harckham
Vice President, Airlines
jared.harckham@icf.com
+1 (212) 656-9235 mobile
Mark Drusch
Vice President, Airline Advisory
mark.drusch@icf.com
+1 (214) 693-9740 mobile

Airline Network Planning And Simulation

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