Tourism & Aviation

Operations

Airline Planning &

Scheduling

Charles Hajdu
c.hajdu@shu.ac.uk

44-706858
Learning outcomes:

Understand the relevant strategic and tactical considerations

(financial and operational) involved in airline planning and scheduling

Understand the processes involved at all key stages

Identify the external factors which may influence planning and

scheduling
1. Overview

2. Fleet planning

3. Route Planning

4. Scheduling
 Strategic
Long Term
Fleet Planning

Route Planning

Types of decision
Time horizon
Schedule development
Frequency Planning
Timetable development
Fleet assignment
Aircraft rotations

Pricing Crew scheduling

Short Term

l
Tactica
Revenue Management Airport resources

Sales & distribution Ops control

Source: Belobaba (Barnhart) 2015

Airline planning - usually divided into three horizons:

Long-term Strategic 3 – 10 years

Mid term market planning and scheduling 6 months – 3 years

Short term operational and resource planning 1 – 6 weeks

Planning is always challenging as markets change and mature

Covid-19 added another dimension

 Strategic
Long Term
Fleet Planning

Route Planning

Types of decision
Time horizon
Schedule development
Frequency Planning
Timetable development
Fleet assignment
Aircraft rotations

Pricing Crew scheduling

Short Term

l
Tactica
Revenue Management Airport resources

Sales & distribution Ops control

Source: Belobaba (Barnhart) 2015

2. Fleet Planning:

Linked closely to Route Planning

The proposed routes and network will drive fleet planning

The fleet must maximise revenue from passengers and cargo whilst
minimising operational costs

Source: Abdelghany, 2018, Ch11

Commonality of fleet improves network economics

(Maintenance and crew scheduling is much simpler)

BUT

Different routes may require different aircraft types

Deploy the largest aircraft you can fill within that market?

Source: Bruce, Gao, King, 2018

British Airways, London Heathrow – Edinburgh

Short sector – Published as 1 hour 25 minutes flight time

(usually less)

Passenger demand may be 500 seats per day

How about one

flight operated
by an
Airbus A380?
469 seats
4 classes
We need to consider transfer passengers with connections
to other flights from London - timings

Most passengers will not want to pay for a first or business

class seat on such a short flight

The A380 burns approximately 10 tonnes of fuel per hour

Maximum takeoff weight 575 tonnes

ICAO Code 4F aircraft

The S-Curve
saturation

dominance

Passenger share

niche

0
Flight frequency
Passenger demand will define this route as 5 flights per day

Timings to fit demand and connections from London

Best-fit aircraft type: Airbus A319 123 economy class seats

Airbus A320 154 economy class seats

Airbus A321 177 economy class seats

Fuel burn: approximately 2.5 tonnes per hour

Maximum takeoff weight 64, 73 and 80 tonnes respectively

ICAO Code 4C aircraft
Airbus A319 123 economy class seats

Airbus A320 154 economy class seats

Airbus A321 177 economy class seats

Large aircraft may have better unit cost
That does not guarantee highest total profit on a route

More flights with smaller aircraft may provide better profit

Other fleet planning considerations:

Design
Performance Maintenance
Acquisition costs
Operating economics
Financial evaluation
Payload and range:

Source: Boeing Aircraft Corp 2019

Payload–range curve, influenced by:

aerodynamic design
engine technology
fuel capacity
typical
passenger/cargo
configuration

Typical shape of the curve is such that the aircraft is able to carry a
maximum payload over a certain distance
Longer distances can be flown if flight payload reduced in
exchange
for extra fuel

This trade-off continues until a maximum operational range is

reached
Airbus A320 family and Boeing 737 ETOPS

Extended-range Twin-engine Operational Performance Standards

Airbus A320 family and Boeing 737 ETOPS

Extended-range Twin-engine Operational Performance Standard

Airbus A320 NEO: 3400nm (3900 statute)

Airbus A321LR: 4000nm (4600 statute)

Boeing 737-MAX8: 3515nm (4040 statute)

Not many choices for passenger carrying aircraft:

New entrants:
Evaluate:

Approaches to production

Technical development

Technical support

Training requirements

20 years in the future:

Will this new aircraft
still be:
a) Suitable for
the business
and Source: Bruce, Gao, King, 2018
Evaluate:

Financing and acquisition models

Cash payment

Overdrafts

Bank loans

Equity finance

Manufacturer Support

Leasing
Leasing:
 Operating lease: hiring an aircraft for a defined period of time. Paying the
aircraft's owner (the lessor) a fixed sum to operate the aircraft for the
duration of the contract
 Dry lease: aircraft only
 Damp lease: aircraft plus the flight crew and maintenance, cabin crew
provided by the lessee
 Wet lease: the lessor provides the aircraft, crew (pilots & cabin crew),
maintenance and insurance (ACMI)
 Finance lease: offers the lessee the option of purchasing the aircraft at the
end of the lease
 Sale and leaseback agreements
Leasing
Potential Potential Disadvantages
Advantages
Reduced capital investment More expensive than ownership
Possible earlier aircraft delivery Exposure to interest rate fluctuations (if variable rates are chosen)
Improved balance sheets Aircraft may be repossessed
Flexible payment terms
Airline cannot access aircraft equity (operating leases only)
Possible tax advantages
Reputational damage to the brand
Provide short-term or interim capacity
On-going maintenance/service charges
Flexible entry and exit terms
Return conditions can be strict
Risk of resale value transferred to
lessor Early return or exit fees my apply
Option to purchase aircraft at the end of the lease (finance leases only) Restrictions may be placed on where
and how the asset can be used
Services of an aircraft management company

(Source: Jackson, 2017)

 Strategic
Long Term
Fleet Planning

Route Planning

Types of decision
Time horizon
Schedule development
Frequency Planning
Timetable development
Fleet assignment
Aircraft rotations

Pricing Crew scheduling

Short Term

l
Tactica
Revenue Management Airport resources

Sales & distribution Ops control

Source: Belobaba (Barnhart) 2015

3. Route Planning:

An airline network is made up of the combination of routes and

resources required to operate

Continual data-driven scan of the market, identify new routes

with potential

Identify routes that the airline is authorised to fly and could obtain
capacity slots at the origin and destination airports
3. Route Planning:

Strategic – market presence is it important for our image?

Economic – increase profitability short term

Practical – airline’s internal factors

Source: Bruce, Gao, King, 2018

Factors to consider:

Capacity-underserved during one or more season

Potential to stimulate demand growth or new demand

Potential to draw traffic away from other airports in the

region

Cargo revenue?

Cost effective with premium yield

Fits into the network structure and business model

Source: Abdelghany, 2018, Ch3

Key measurements

The most common approach to measuring and comparing network

performance is to count the passengers paying for their tickets on
certain routes, and multiply that by the distance they were flown on
that route

The result is called ‘Revenue Passenger Kilometre’ (RPK)

This is the total revenue potential raised on a single route, or

aggregated across all routes in a network

Source: Bruce, Gao, King 2018

Seats available on a certain route are multiplied by the flown
kilometres, the result aggregated across all routes represents the
total capacity supply produced in a network.

This indicator is called ‘Available Seat Kilometre’ (ASK)

Source: Bruce, Gao, King 2018

Demand indicator (RPK) is divided by the supply
indicator (ASK), the result can be interpreted as the
average utilization of flown capacity across a given
network - ‘Seat Load Factor’ (SLF)

RPK / ASK = SLF

Source: Bruce, Gao, King 2018

The second performance indicator is yield, which is the revenue per
seat, per passenger, per flight

High yields (per seat) are expected to add up to economically

successful flights, and ultimately a profitable network

Profitability is often measured in relative terms, i.e. as the

difference between yield and unit cost

Source: Bruce, Gao, King 2018

Similar to the measurement of demand and supply volume in a
network, the yield is often defined as ‘Revenue per Available Seat
Kilometre’ (RASK)

Unit cost is calculated as ‘Cost per Available Seat Kilometre’ (CASK)

The margin between the respective RASK and CASK figures will
determine the profit of a certain flight, series of flights or the entire
network

Source: Bruce, Gao, King 2018

The third performance indicator takes into account that even if a
flight is fully booked (seat load factor 100%), this is not yet sufficient
to ensure that the capital invested and ‘locked in’ to the aircraft pays
off

If an aircraft has a limited daily operations time (Block hours) and is

on the ground for extended periods of time, this unproductive time
on the ground endangers the profit. Many of the costs associated
with merely owning an aircraft continue to occur even when it is not
flying

Passengers only pay for travel time in the air

Source: Bruce, Gao, King 2018

There is a partial link between the three key performance indicators
(KPIs) we have examined

High seat load factor and a high yield per seat is very difficult to
achieve unless the respective market is underserved and short of
supply

In practice, it becomes increasingly difficult to fill an aircraft beyond

an SLF of 90%+
In most cases the last few seats will only sell at discounted rates

This results in the paradox effect that an aircraft with a 95% load
factor may contribute less total revenue than the same aircraft on
the same route on the same day with only 92% load factor
Source: Bruce, Gao, King 2018
Point-to–point airline:

The demand is only generated between the two city pairs

Hub and spoke airline:

Demand to and from the hub (local demand)

Demand to onward destinations from the hub (connecting

demand)

Source: Abdelghany, 2018, Ch2

All characteristics of demand should be identified

• Purpose of travel:

Leisure
Business

Religious
VFR

• Income
• Age
 Passenger
segmentation

Leisure/
Business VFR
Religious

Large Small Not so

Emergency Leisure Wealthy
company company wealthy
Understanding the competition

On the same route

On competing routes

Quality Share Index (QSI) models will estimate the market share
of the route

Source: Abdelghany, 2018,Ch8

Taking into account the demand and revenue estimates and
fleet type availability -

The flight frequency and seat capacity can be determined

Cost estimations can also be made

Airport fees
Third party charges (ground
handling, engineering support)

Source: Abdelghany, 2018, Ch3

Airport slots

Airport coordination - managing airport capacity through the

application of a set of rules

Worldwide Slot Guidelines (WSG)

- involves the allocation of constrained airport capacity to airlines

and other aircraft operators

Ensures a viable airport and air transport operation

Maximises the efficient use of airport

infrastructure
The Worldwide Slot Guidelines (WSG)

- a set of standards and best

practices developed by IATA
member airlines and the airport
coordinator community

Guidelines and a comprehensive

set
of procedures for allocation and management
of airport capacity

Principal users - airlines and airport

coordinators
Three levels of coordination worldwide:

Level 1: Where the capacity of the infrastructure is generally adequate to meet

the demands of airport users at all times

Level 2: Potential for congestion during some periods, either day, week or
season (Can be resolved by voluntary cooperation between airlines)

Level 3: Capacity providers have not developed sufficient infrastructure or

government has imposed conditions that make it impossible to meet demand
 Strategic
Long Term
Fleet Planning

Route Planning

Types of decision
Time horizon
Schedule development
Frequency Planning
Timetable development
Fleet assignment
Aircraft rotations

Pricing Crew scheduling

Short Term

l
Tactica
Revenue Management Airport resources

Sales & distribution Ops control

Source: Belobaba (Barnhart) 2015

4. Scheduling

The scheduling department is a specialist division within the

airline and works closely with many connected departments

Scheduling is a response to demand but will also have an impact

on demand

The timetable is a production schedule and specification of core

services
The aircraft schedule (rotation) specifies the sequence of:

flights to be flown by each aircraft

This is usually planned over a time

horizon of 2 – 7 days

It will also consider a wide range of

operational issues
Many operational issues to consider:

• Peak operating times and effects

• Turnround times

• Separation between flights - connections

• Maintenance time between flights

• Issues at specific airports

Source: Bruce, Gao, King, 2018

Flight schedule objectives Revenue

Efficiency /
Constraints Schedule Utilisation

Reliability

Source: Cook & Billig 2017

 Revenue

Passengers often rate schedule convenience as an important criterion - for

business passengers, it is often primary

For hub carriers, maximising the connections through the hub is critical

Consider aircraft type carefully

Source: Cook & Billig 2017

 Efficiency /
Utilisation

CASK will be lowered through high utilisation of aircraft and crew

LCCs gain a significant advantage – P2P/linear route structures not constrained

By hub and spoke timings

LCCs will operate services earlier and later in the day than network carriers

Source: Cook & Billig 2017

 Reliability

Schedules – constructed sensibly to absorb delays whenever possible and

provide competitive On Time Performance (OTP)

Schedule design should allow for aircraft swaps and higher flight
frequency

Source: Cook & Billig 2017

 Constraints

More flights than aircraft!

Aircraft types unsuitable for the route – performance

Airport capacity

Airport curfews

Source: Cook & Billig 2017

Once an initial draft is created, the schedule must be optimised

The schedule will be circulated to all relevant departments for consideration

Additional constraints may be identified at this stage

The final schedule will be a compromise

The schedule will be reviewed:

Market Size

Market Share

Fleet Assignment

Passenger Spill

Transfers

Dependability
Prediction
An airline’s most critical choices are the destinations it serves and the
route structure connecting these cities

Planning and developing an airline’s route network and schedule is

an extremely complex task subject to many business forces and
operational constraints

Trade offs must be made between revenue and cost in an attempt to

maximise profit

Once in daily operation, the flight schedule is subject to real-time

disruption
Learning outcomes:

Understand the relevant strategic and tactical considerations

(financial and operational) involved in airline planning and scheduling

Understand the processes involved at all key stages

Identify the external factors which may influence planning and

scheduling
References:

Abdelghany, A., (2020). The practice of airport and airline route development: International Airport
Review, 6, retrieved from https://www.internationalairportreview.com/article/111407/route-
development-risks-limitations-flaws-results/

Abdelghany, A., (2018). Airline Network Planning And Scheduling. London: John Wiley & Sons.

Belobaba, P., Odoni, A., Barnhart, C., (2016). The Global Airline Industry. London: John Wiley & Sons.

Bruce, P.J., Gao, Y., (2018). Airline Operations: A Practical Guide. London: Routledge.

Cook, G., Billig, B., (2017). Airline Operations Management. London: Routledge.

Jackson, J. (2017) Airline Finance. In Budd, L. & Ison, S. (Eds.), Air Transport Management: An
International Perspective (pp.169-190). Abingdon: Routledge