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Published by: Shraddha Dekhane on Feb 09, 2011
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02/09/2011

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Forecasting in Civil Aviation

Team..
‡ Shraddha Dhekane ‡ Tushar Shelke ‡ Amol Khedkar ‡ Vikram Lawand P-32 P-37 P-04 C-54

Introduction
‡ Fastest growing aviation market in the world ‡ first domestic air route between Karachi and Delhi in 1912 ‡ In the early fifties, all airlines operating in the country were merged into either Indian Airlines or Air India. ‡ The Directorate General of Civil Aviation(DGCA) controlled every aspect of aviation ‡ AAI

‡ The aviation industry comprises of three types of players: ‡ Full cost carriers ‡ Low cost carriers (LCC) ‡ Other start-up airlines . the private carriers accounted for around 75% share of the domestic aviation market.Contd« ‡ The Air Corporations Act was abolished to end the monopoly of the public sector and private airlines were reintroduced in 90s ‡ In 2006.

Scheduled air transport service. ‡ 3. . Air cargo service. Non-scheduled air transport service. which includes air transportation of cargo and mail. which includes domestic and international airlines. which includes charter operators and air taxi operators.Classification Of Indian Aviation Sector ‡ 1. ‡ 2.

the players in aviation industry can be categorized in three groups: ‡ Public players ‡ Private players ‡ Start up players .‡ Apart from this.

Challenges ‡ ‡ ‡ ‡ ‡ ‡ Employee shortage Regional connectivity Rising fuel prices Declining yields Gaps in infrastructure High input cost .

‡ The method(s) of forecasting will depend on the available data.Forecasting ‡ The process of forecasting is usually one of coordinating a number of inputs (including historical traffic data. . on the time and resources available to carry out the forecast. and on the purpose for which the forecast is being developed . historical and anticipated influencing factors) and carrying out analyses to measure their relative impact on future air traffic flows.

..Before Forecasting.

‡ It is important to clean the historical data ‡ Collect data from all the possible sources ‡ Look for outliers ‡ Consider seasonality .Data Collection & Analysis ‡ It is usually best to use all relevant historical data.

Market Factors Consideration ‡ ‡ ‡ ‡ ‡ ‡ Low-cost carriers or other new entrants Regional jets Changes in service from competitors Industry consolidation Taxes and fees Advances in aircraft technology .

What is neglected? ‡ Uncertainty ‡ Accuracy .

Basic Use of forecasts ‡ To reflect the demand for aviation services ‡ To help planners procure the appropriate supply .

parking. airport access. .Long-Term Planning and Capacity Needs ‡   ‡  Airside facilities expansion runways and taxiways air cargo facilities. Landside facilities expansion terminals. concourses.

‡ Tower staffing requirements.Short-Term Operational Planning ‡ Airport personnel requirements. or hourly peaking effects. ‡ Identification of aircraft and passenger travel time and delays. ‡ Identification of seasonal. daily. .

Thus it is more flexible & can be easily altered.METHODS Do not use statistical database for forecasting. QUALITATIVE ‡ Market survey ‡ Market experiment ‡ Barometric forecasting ‡ Judgemental forecasting ‡ Simulation model QUANTITATIVE ‡ ‡ ‡ ‡ ‡ ‡ Seasonal variation Cyclical variation Exponential smoothing Market share analysis Econometric modeling Time series modeling .

Qualitative methods ‡ Market Survey ± Simple method ± Accuracy depends on sample size ‡ Market Experiment ± More expensive.In 2009 Spice Airlines used to forecast for new meal system . Involves testing in real life market ± More risky method ± Eg.

± Very time consuming and expensive .CONTD««« ‡ Barometric forecasting ± Indicators ‡ Leading indicator ‡ Lagging indicator ‡ In aviation sector GDP is Leading Indicator ‡ Judgemental Forecasting ± Delphi method/Expert Opinion: forecast is developed by a panel of experts who answer a series of questions.

CONTD«.. ‡ Simulation Model ± Forecast Traffic flow in Network ± Routing of aircrafts & passengers ± Infrastructure layout .

Quantitative methods .

± Alternate mode of transportation. ‡ Uncontrollable variation in particular time period. ± Competitors effect. ‡ Occurs due to ± Fuel Price. .Seasonal variation.

04 1.16 1.125 1.083 Avg.26 1. Seasonal 1.85 Q3 .74 .25 1.75 .30 Factor .84 .Year 1(2007) 2(2008) 3(2009) Q1 120 134 Q2 80 80 Q3 70 70 Q4 110 100 Total 380 381 Avg 95 96 100 70 60 90 320 Seasonal variation in passengers80 Year 1 2 3 Q1 1.74 Q4 1.4 Q2 .83 .73 .875 .

85(100) = 85 ‡ Q3: . ‡ Average forecast per quarter is 400/4 = 100 units. ‡ Q1: 1. forecast × seasonal factor. ‡ Quarterly Forecast = avg.‡ Annual Forecast for year 4 is predicted to be 400 units.303(100) = 130 ‡ Q2: .74(100) = 74 ‡ Q4: 1.083(100) = 108 .

past change pattern will continue Cyclical variations Seasonal variations Irregular phenomena . sophisticated statistical method Used when time and data are avialable Assumes.Time series or trend analysis ‡ ‡ ‡ ‡ ‡ ‡ Oldest.

‡ Local forecasts are a market share (percentage) of regional forecasts. ‡ Assumes a top-down relationship between national. ‡ Historical market shares are calculated and used as a basis for projecting future market shares. and local forecasts.Market Share forecasting. regional. . which are a market share (percentage) of national forecasts.

.Econometric Model forecasting. ‡ Regression analysis should be restricted to relatively simple models with independent variables for which reliable forecasts are available. such as enplanements. to economic measures (independent variables). such as population and income. ‡ A statistical technique that ties aviation demand (dependent variables).

‡ Can be effective in short term forecasting. ‡ Gives greater weight to the latest trend.Exponential Smoothing ‡ A statistical technique applied to historical data. .

Ft= where At-1 + (1 .Smoothing constant between zero and one. . ± Ft-1 Forecast made for the prior period.)Ft-1 ± Ft ± Forecast for the period t. ± At-1 Actual value of the time-series in the prior period. ± .

.Beyond Forecasting ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ An airport master plan: Preplanning Establishment of a public involvement program Environmental considerations Analysis of existing conditions Aviation forecasts Assessment of facility requirements Development and evaluation of alternatives Airport layout plans Facilities implementation plan Financial feasibility analysis.

Thank You .

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