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Has Airline Forecasting changed forever?

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Has Airline Forecasting changed forever?

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it is concern forecasting in Aviation,
two case studies are addressded, i.e global world, and Delta Airline, which shows the impact of Covid19, and its recovery in the future.

it is concern forecasting in Aviation,
two case studies are addressded, i.e global world, and Delta Airline, which shows the impact of Covid19, and its recovery in the future.

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Has Airline Forecasting changed forever?

  1. 1. Has Airline Forecasting changed forever ? By: Mohammed Salem Awad Corporate Planning Director Yemenia AVIATION FESTIVAL ASIA 14 - 15 June 2022
  2. 2. Outline • Introduction • Airline Industry • RecoveryPeriod • Trend • Airbus • Polling • AirlineIndustryModel • TimeSeries • Directional& Displacement • ReadingIn TheFuture • Airline Industry RPKs • Setting Targets • Trend Analysis • SeasonalityAnalysis Outline • SeasonalityAnalysis- Details • Delta Airline - Domestic • Trend Analysis • SeasonalityAnalysis Outline • SeasonalityAnalysis- Details • Delta Airline - International • Trend Analysis • SeasonalityAnalysis Outline • SeasonalityAnalysis- Details • US Carriers – Domestic • Results • Summary • References
  3. 3. Forecasting, Goals and Targets • Forecasting is valid only in a stable economic environments – but not in the cases of a force major such as a natural disaster, a sudden war, a financial collapse or a global outbreak of a deadly virus such as the Covid-19 pandemic. • So for time series, forecasting will be the mirror of the past with an uncertain growth or not to repeat the hidden cycles , seasons and shocks that may will appear in the future with a minimum acceptable margin errors . Introduction
  4. 4. Introduction Driver for Economic growth and Air Traffic Methodologies Demand vs Supply In Aviation Industry: Forecasting depends on the analyst, data sampling, and in what scope should we treat the process of forecast, as it is involves many drivers.
  5. 5. Introduction • In Aviation Industry, Every One Has its own Concept to Forecast and evaluate the Demand based on their strategies and philosophy. • Airbus philosophy is based on consolidation “Hub-to-Hub”. Leadingto manufacture A380 • Boeing philosophy is based on Fragmentation “Point-to-Point”. Leadingto manufacture B787 Dreamliner. • That’s for longterm forecasting. • But for short term forecasting, we always face the seasonality term. • General practice the Airline Industry Model can be expressed by The ARIMA seasonal model. • Yemenia – applied a new approach addressing Signal tracking, that control the displacement and rotational factors of the new model. Manufacture Concept
  6. 6. Introduction • Shocks in Aviation History
  7. 7. Introduction Previous Shocks (Period Comparison)
  8. 8. Introduction • Current Situation – CTKs, RPKs Dom., & RPKs Int.
  9. 9. Introduction • Current Situation – Domestic Markets
  10. 10. Introduction Black Swan Situation
  11. 11. Introduction Black Swan Situation Black Swan Theory: A theory that suggests that rare events are unpredictable as if they were impossible to happen. The theory took its name from the swan, as it was widely believed that all birds of this species were white, until black swans were discovered in Western Australia in the 18th century. - It is an unexpected surprise and have a significant impact, and - After it occurs the explanations that it considers predictable appear. The theory was described by The Black Swan in 2007. There are no agreed criteria by classifying an event as a "black swan", so it could be a natural disaster, a sudden war, a financial collapse or a global outbreak of a deadly virus such as the Covid-19 pandemic, but, according to Naseem Nicola, black swan events usually have three main characteristics: - It has not occurred in the recent past, and - the forecasting and forecasting tools used at the time of their occurrence cannot be monitored. - It has a profound impact on societies around the world. - They are inexplicable at the time they occur, and can only be absorbed long enough after they have occurred.
  12. 12. Airline Industry Back To Norms will be May 2023 – Jan 2024 Expected Recovery Period
  13. 13. Airline Industry Back To Norms will be May 2023 – Jan 2024
  14. 14. 14 Airline Industry Total Voting = 12234+ 1671 = 13905 Votes Polling - Delphi Method
  15. 15. Airline Industry Model Airline Forecasting Industry Model Time Series
  16. 16. Airline Industry Model Directional and Displacement Factors Directional Displacement
  17. 17. 17 Reading In The Future (Previous Work) Cases : 1- Air berlin 2 - Turkish Airlines 3- Iceland air 4- IAG group 5- Air Canada 6- Ryan Air 7- Lufthansa At : https://www.slidesha re.net/forecasting/pr esentations
  18. 18. Airline Industry - RPKs Airline Industry RPKs Back To Norms
  19. 19. Airline Industry Airline industry reflects a Black Swan Situation, which characterize as unpredictable situation.
  20. 20. 20 Trend Analysis – Setting Targets
  21. 21. 21 Trend Analysis Trend Analysis (Setting Target) 12 Moving Average Two trend models
  22. 22. 22 Seasonality Analysis (RPKs Outline) Outline
  23. 23. 23 Seasonality Analysis ( RPKs Details) Details
  24. 24. Airlines Delta Airline Domestic Passengers
  25. 25. 25 Trend Analysis Trend Analysis (Setting Target) 12 Moving Average Two trend models
  26. 26. 26 Seasonality Analysis (Pax. Outline) Outline
  27. 27. 27 Seasonality Analysis ( Pax. Details) Details
  28. 28. Airlines Delta Airline International Passengers
  29. 29. 29 Trend Analysis Trend Analysis (Setting Target) 12 Moving Average Two trend models
  30. 30. 30 Seasonality Analysis (Pax. Outline) Outline
  31. 31. 31 Seasonality Analysis ( Pax. Details) Details
  32. 32. 32 US Carriers – Domestic Market American Airlines, Skywest, SpirIt, & Hawaiian
  33. 33. 33 Results (Global) Back To Norms : May 2023 – Jan 2024 Polling (LinkedIn) - Recovery On: 2024 Airbus Analysis = Recovery 2023 -2025 Passenger (RPKs) Details : Pre-set Target 2021 = 9097 b. RPKs The Actual level Dropped by 68.61 % Pre-set Target 2022 = 9559 b. RPKs The Actual level Dropped by 62.39 %
  34. 34. 34 Summary 1/2 Forecasting is an important tool for planning, so without planning, there will be a disaster that may happen, i.e what will happen in case of Force Major Industry practice, we always use a point to point analysis (Month by Month and Year by Year – YoY ) in terms of percentage which is reflected by V shape Curve ( Black Swain Situation) in the current situation. We just monitoring the situation –its beyond your plans and controls. In case of Airline industry, demand evaluation and forecasting are a must. But we have first to define the Recovery Period. Everyone has its own word. We are addressed two Global Markets – International and Domestics Markets to evaluate the recovery period, which clearly shows that the Domestic Market is in the final stage of recovery, due the control of the local authority in the country.
  35. 35. 35 Summary 2/2 For Domestic Market - most of the big countries are recovered, especially China, Russia and USA. Example Delta Airline, shows a fast recovery for Domestic Passengers, while internationally not. While for International Market, the picture is different Here the cross border rules, different authority, and restrictions by different countries play a major part in delay of International Market. All signals indicate, that the airline industry will recover by 2024. Also for international operation still the world suffering from COVID 19 – especially Europe. Due to most of countries practicing the COVID 19 travelling restriction between them. While the crises between Russia and Ukraine is another factor.
  36. 36. 36 References Air Passengers Market Analysis https://www.iata.org/en/iata- repository/publications/economic-reports/air-passenger- monthly-analysis---march-2022/ Airline Traffic Forecasting https://www.slideshare.net/forecasting/presentations Airport Traffic Forecasting https://www.slideshare.net/wings_of_wisdom/airport- forecasting-100-issues US Carries Traffic Statistics https://www.transtats.bts.gov/Data_Elements.aspx?Data=1
  37. 37. 37 Thank You Contact

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