Developing targets is one of the major issues in the aviation industry. In the recent time, many aviation sources predict different figures, based on their own analysis, and sight for the global aviation market. The dilemma, that, there is no basic rules for the predictors, especially aircrafts manufacture companies.

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Predicting Aviation Industry
Performance (L/F) – 2019
L/F
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Predicting Aviation Industry
Performance (L/F) - 2019
By: M. S. Awadh
Introduction:
Developing targets is one of the major issues
in the aviation industry. In the recent time,
many aviation sources predict different
figures, based on their own analysis, and sight
for the global aviation market. The dilemma,
that, there is no basic rules for the predictors,
especially aircrafts manufacture companies.
As everyone comes with their own
assumptions and approaches which lead to
consequently different results. Off course
there are many indicators to testify the
forecasting figures, one of those is R square –
Coefficient of Determination, even though this
indicator is not fairly enough to implement and
get the complete picture, It is worldwide
aviation practice as a best fit indicator. In this
article, a new concept is discussed, and two
testify parameters are used. First is R –
square – Coefficient of Determinations second
is Tracking Errors, T.E. They are used as mapping tool on x-y coordinates for
Displacement and Rotational factors that governed the mathematical model to deliver
the best possible scenario to forecast.
Aviation Data:
ICAO is considered one of a main data source for
aviation industry, which are generally published in their
reports. Moreover, the main measuring performance
factors of Air Transport aviation industry are – ASKs,
RPKs, and Seat Load Factors (L/F). Since the Aviation
industry (Airlines) is a service product industry. which is
ASKs stand for Available Seat Kilometers, i.e what
airlines are offered (Supply) , RPKs, stand for Revenue
Passengers Kilometers, i.e, what airlines are gained
(Demand), the filling rate of aircraft capacity is seat load
factor (L/F) i.e L/F = RPKs/ASKs (Performance). For
single point to point – city pair route load factor (L/F) =
Passengers/Seats.
ICAO monthly reports address these parameters in
Economic Development bulletin.

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Forecasting Model:
Actually, the forecasting process
has two stages, Evaluation and
Forecasting. In the evaluation
stage we are trying to analysis the
input data, and align the practical
data with a mathematical model,
we use a state of art forecasting
program to fit data. Two control
factors have a great impact on the
seasonality model.
First displacement factor
(Displacement Issue), this factor
acts to shift the whole data from its
running path to a new one but keeping the trend and direction of the analysis. While
the Second factor is Directional factor, definitely, if we manipulate this factor and try to
use many trail values (positive and negative value), the model will position itself
accordingly as a clock around the origin.
The typical forecasting model is subjecting to many shocks, cycles, summer season,
winter season, back to school, Haj season and a Chrisms time.
Forecasting 2019:
1- RPKs Forecasting
a. Annually
b. Monthly
2- ASKs Forecasting
a. Annually
b. Monthly
3- Predicting Aviation Industry Performance

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1- RPKs Forecasting
a. Setting RPKs - Annual Target :
The best way to set up annual target and minimize the data discrepancy is to address the
data by two trend models using the concept of 12 months rolling method for RPKs and
ASKs. Here we implement two trend models by using Add a trend line in XLS sheet:
First – General Trend Model using the concept of Straight Line equation.
Second – Most Recent Data Trend Model Using a Polynomial Model – Second-degree
equation. This reflects the impact of most recent data on the path of general trend. The
mid-point is the most convenient forecast annual result at Dec 2019.
As long as the gap between two models is small, the more accurate approaching value for
setting annual target (Dec 2019) otherwise we have to select the half way distance
between two extreme targets of these models. As shown below
a. Annual Forecasting – Using 12 Months Rolling Concept.
b. Monthly Forecasting – Define Seasonality

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2- ASKs Forecasting:
Repeat the same approach for ASKs
a- Annual Forecasting – Using 12 Months Rolling Concept.
b- Monthly Forecasting – Define Seasonality

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3- Predicting Aviation Industry Performance - 2019
Load Factor can be calculated based on the
basic equation i.e RPKs/ASKs i.e Revenue
Passenger Kilometers divided by Available Seat
Kilometers. The expected annual load factor will
be 82.80 %. The highest peak value is August
(86.36 %). While the lowest season is November
(80.96 %) for 2019.
Forecasting Accuracy:
Based on the model figures for RPKs, and ASKs,
we calculates the percentage errors (with actual
data), so the maximum percentage errors for
RPKs is not exceed than + 1.91 and not less than – 2.36 %, while for ASKs is not
exceed than + 1.27 and not less than – 3.07 %.
Results:
A 2019 is forecasted
The expected RPKs for 2019 will be = 8,387 Billion RPKs at a growth: 6.87 %
The expected ASKs for 2019 will be = 10,128 Billion ASKs at a growth: 6.05 %
The expected Load Factor for 2019 = 82.80 %.

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Summary:
ICAO reports are the main data source, for aviation performance indicators as ASKs, RPKs
and Load Factor, The article address two forecasting approaches
Annually Forecast – where we apply 12 Months Rolling Concept using two different trend
models. First model the general trend model, defining the general trend. the second is the
polynomial model – second degree, defining the impact of the most recent data on the new
model, As long as the gap between two models is small, the more accurate approaching
value for setting annual target (Dec 2019). Otherwise, we have to select the half way
distance between two extreme targets of these models.
Monthly Forecast – once we define the annual target, we used that value (target) to
define the monthly forecasting pattern, for that a new concept is applied – i.e Max/Min
Tracking Errors approach – to forecast the Aviation Industry Performance in terms of RPKs
and ASKs. All the performance factors are in a Fair situation i.e ASKs, and RPKs. this
clearly supported by the Errors graph for ASKs, RPKs. Finally, a 2019 Forecast will be as
follows:
The expected RPKs, ASKs for 2019 will be = 8,387 Billion RPKs at a growth: 6.87 %,
10,128 Billion ASKs at a growth: 6.05 % respectively at Load Factor = 82.80 %. ■
Date of Issue:
21 Dec. 2018
Author:
Mohammed Salem Awadh
Chairman Adviser
YEMENIA – Yemen Airways
Email: smartdecision2002@yahoo.com