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Route development
This document discusses route development strategies for airlines. It outlines analyzing supply (available seats) and demand (passengers) trends on routes to forecast performance. Three outcomes are possible: converge, where passenger growth exceeds seat growth; leveling, where growth is equal; and diverge, where passenger growth lags. Monthly seasonality patterns identify peak periods. The goal is adjusting flight frequencies, aircraft size, or other factors to achieve the annual load factor target based on supply-demand analyses. Examples of route analyses between various city pairs are also presented.
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Route development
- 1. Route Development By: Mohammed Salem Awad CorporatePlanning Director Annual Sales Conference 6-7 Oct. 2019
- 2. 2 Outline Introduction Basic Notes New Routes ExistingRoute Supply Vs Demand Route Forecasting Annually Data Discrepancy Trend Analysis Monthly Seasonality Pattern Route Development Converge Case. Levelling and constant gap. Diverge Case. Examples Summary
- 3. 3 Introduction 1/2 Route Developments Allconcern about Route Development, and today Airline Industry suffering by the competition from the new concept of LCC, resulting more Airline declare their bankruptcies, the reason of that, they are not able to adjust their cost to meet their expenditure, at a very tight profit margin in Aviation Industry. So the passengers experience, study the basic behavior mode and practice by passengers and this lead us to Study Route Development in terms supply (seats) and demand (passengers)
- 4. 4 Introduction 2/2 Route Developments AirlinesVs Airports Route Development, it is a mission of airline that done by Airports, in spite of Airports, don’t have aircrafts, but they are more concerned about route development. Supply (Seats) and Demand (Passengers) Performance of Route = Pax/Seat (Pax Load Factor) Converge Vs Diverge Situations
- 5. 5 Basic Notes Route Developments AirlinesVs Airports Basically we study the both trends of supply and demand. The basic concept of forecasting is implemented by two main factors: Displacement Factor Rotational Factor
- 6. 6 New Routes Opening NewRoute Thumb analysis Gravity Model https://www.slideshare.net/wings_of_wi sdom/yemenia-focus-no-2-gravity- model-for-aden-airport
- 7. 7 Existing Routes Routes Development Itis address the relation between Demand (Pax) and Supply (Seat) It can be easily evaluate by 12 month moving to damp the fluctuation Using Two trend Models, Straight Line and Polynomial – Second Degree Straight Line : Measure the General trend of the Data Polynomial – Second Degree The impact of the latest data on the model The Gap between the two models will measure the Data Discrepancy
- 8. 8 Supply Vs Demand InAirline Industry: Our Product is ASK - Seats (Supply) while what we are achieved is RPK – travelled Passengers (Demand) The concept is to study the relations between these two factors the out Comes are – Diverge , Leveling , and Converge.
- 9. 9 Route Forecasting Routes Forecasting(basic Notes) Annual Forecasting - Trend analysis Using Two trend Models 1- Straight Line 2- Polynomial – Second Degree Straight Line : Measure the General trend of the Data Polynomial – Second Degree The impact of the latest data on the model The out comes, it can be positive, negative trends or high discrepancy data. And the best scenario is to select the mid way between these two trends.
- 10. 10 Existing Routes Routes Forecasting MonthlyForecasting – Seasonality Patterned. The out comes of Passengers/Seat = = Passenger Load Factor (Performance) The final annual preset Load Factor by Annually analysis will be the Annual Load factor resulting by monthly Analysis. In terms of LOAD FACTOR, the seasonality pattern is developed on monthly bases for the predicted year (2019) , defining the peak periods that need more concern in the future. This give a clear picture either to add frequencies or delate the extra flight or change the type of the aircraft to meet the expected Growth.
- 11. 11 Route Development -Outcome Three Possible Outcomes Converge: It is happen when the Growth of passengers is greater than the Growth of Seats. This needs to add more frequency to absorb the increase of passengers demand. Results higher expected load factor. Leveling and Constant Gap It is happen when the Growth of passengers and Seats have a zero slop or same growth rate – it is create a constant Gap between these two lines. Diverge It is happen when the Growth of passengers is less than the Growth of Seats. This means there are extra capacity on this route, should be reduced. Results lower expected load factor.
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- 18. 18 Summary The final wordfor route development is LOAD FACTOR, which is the out come of PAX/SEAT. In terms of LOAD FACTOR, the seasonality pattern is developed on monthly bases for the predicted year (2019) , defining the peak periods that need more concern in the future. This give a clear picture either to add frequencies or delate the extra flight or change the type of the aircraft to meet the expected Demand.
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