NEXT GENERATION OF ROUTE FORECASTING AND OPTIMIZATION

Airline network planning departments face several market problems such as lacking quality industry data and technology, proactively and accurately informing network planners about which markets to serve, and determining the right markets for which to codeshare. In the near future, new innovations will solve these and many other problems in network planning, bringing significant benefits to an airline’s bottom line.

The commercial airline industry is continuing to grow at a healthy rate. IATA predicts global passenger traffic to grow by more than 2.5 percent per year for the next several years, with some regions such as Southeast Asia growing in excess of more than 3.5 percent annually.While some of these aircraft are for fleet replacement, many present significant network opportunities, as well as high risks and financial challenges for an airline’s balance sheet. The new-growth aircraft can provide an airline with opportunities to fly new routes, linking new cities into connecting hubs and/or up-gauging existing markets being served, as well as expanding codeshare markets with alliance partners.

The risks and financial challenges include higher fixed operating costs (stemming from the lease of aircraft) without possibly the passenger revenue to offset, along with misidentification of network strategies driven by inaccurate industry data and antiquated forecasting/optimization technology.

There are several important market problems in network planning departments today. Read the full story in Ascend.