Optimal cargo container loading plans under stochastic demands for air express carriers

In this research, we develop a stochastic-demand cargo container loading plan model with the objective of minimizing the total operating cost, subject to the related operating constraints. The model is formulated as a nonlinear mixed integer program that is characterized as NP-hard. We employ a problem linearization technique, coupled with a mathematical programming solver, to develop a solution method. To preliminarily evaluate the model and the solution method, we perform a case study using data from an international air express carrier. The results show that the model and the solution method could be useful for air express carriers.     

Air express network design based on express path choices – Chinese case study

Due to the shortage of cargo aircraft, Chinese express companies have to provide transportation services with a hybrid method that consists of “rented bellies and self-owned cargo aircraft”. Because the bellies are rented from air passenger companies and because the cargo aircraft are owned by the express companies, it is important for the express companies to use their cargo aircraft as effectively as possible. This paper constructs a bi-level model to optimize the flight transportation network of an express company. The upper model designs the network and allocates the transportation capacity with the objective of minimizing the total transportation cost, and the lower model calculates the link flows in user equilibrium. Data from ShunFeng (SF) Express Company (China) are used to conduct the case study. Using the model outputs, the flows on links and at nodes are analyzed to illustrate the transportation and transshipment situations.     

Modeling the joint choice of access modes and flight routes with parallel structure and random heterogeneity

This study focuses on the influence of ground access transportation on air travel. The error components logit model with parallel structure is first adopted to formulate the joint choice behavior of access, airports, and flights. The proposed model proves to be effective in exploring interdependence between choice dimensions and travelers heterogeneity. The empirical results indicate that fare discounting should be introduced at the city airport and the frequency of existing flight routes should be increased. To benefit the hub airport, authorities of the new airport mass rapid transit system should reconsider the tradeoff between time and cost for express trains.     

An airline's management strategies in a competitive air transport market

Over the last decade, the demand for domestic and international flights in Korea has increased substantially. To meet the strong flight demands, several low cost carriers have begun to offer flight services. In addition, full service carriers have been motivated to establish their own subsidiary low cost carriers to maintain their market share against rival low cost carriers. This paper studies the management strategies of three kinds of airlines - full service carrier, its subsidiary low cost carrier and rival low cost carrier - based on game theory in the competitive air transport market. Each airline is assumed to act as a player and chooses strategies regarding airfare, flight frequency, and the number of operating aircrafts for specific routes while maximizing its own profits. Demand leakages between the airlines are considered in the flight demand function according to the selected strategies of all airlines. Through various game situations reflecting realistic features, this study provides managerial insights that can be applied in the competitive air transport market.     

Algebraic connectivity maximization of an air transportation network: The flight routes’ addition/deletion problem

A common metric to measure the robustness of a network is its algebraic connectivity. This paper introduces the flight routes addition/deletion problem and compares three different methods to analyze and optimize the algebraic connectivity of the air transportation network. The Modified Greedy Perturbation algorithm (MGP) provides a local optimum in an efficient iterative manner. The Weighted Tabu Search (WTS) is developed for the flight routes addition/deletion problem to offer a better optimal solution with longer computation time. The relaxed semidefinite programming (SDP) is used to set a performance upper bound and then three rounding techniques are applied to obtain feasible solutions. The simulation results show the trade-off among the Modified Greedy Perturbation, Weighted Tabu Search and relaxed SDP, with which we can decide the appropriate algorithm to adopt for maximizing the algebraic connectivity of the air transportation networks of different sizes. Finally a real air transportation network of Virgin America is investigated.     

Managing severe airspace flow programs: The Airlines’ side of the problem

This paper presents a heuristic-based approach for minimizing airlines’ schedule disruptions and operation costs associated with severe airspace flow programs. It considers primary decisions made by flight dispatchers such as flight slot substitution and rerouting outside the boundaries of the flow-constrained area. A two-stage heuristic is developed. In the first, a linear approximation of the problem is used to screen inefficient routing and slot substitution alternatives. The second stage examines possible solution improvements through trading flight assignments for every pair of conflicting routes. A genetic algorithm is developed and used to benchmark the performance of the two-stage heuristic. In the algorithm, flight route and slot allocation schemes are modeled as chromosomes. The fitness of these chromosomes measures the magnitude of schedule disruption and overall operating cost. A set of experiments that compare the performance of the two heuristics considering airspace flow programs with different levels of severity is presented.     

Endogenous control of service rates in stochastic and dynamic queuing models of airport congestion

Airport congestion mitigation requires reliable delay estimates. This paper presents an integrated model of airport congestion that combines a tactical model of capacity utilization into a strategic queuing model. The model quantifies the relationships between flight schedules, airport capacity and flight delays, while accounting for the way arrival and departure service rates can be controlled over the day to maximize operating efficiency. We show that the model estimates the average and variability of the delays observed at New York’s airports relatively well. Results suggest that delays can be extremely sensitive to even small changes in flight schedules or airport capacity.     

Flight delay impact on airfare and flight frequency: A comprehensive assessment

This paper presents a comprehensive empirical analysis of flight delay impact on airfare and flight frequency in the US air transportation system. We model airfare and flight frequency as functions of cost and demand characteristics, competition effects, and flight delays at origin, destination, and intermediate hub airports. Estimation results confirm that airlines tend to pass delay cost onto passengers through higher fare, whereas delay has an upward effect on flight frequency. We find that proportionate airport delay reduction across the system can result in annual fare reduction in the order of billion dollars.     

Advance purchase behaviors of air passengers: A continuous logit model

Modeling the advance purchase behaviors of air passengers is essential when airlines develop revenue management strategies. Therefore, this study empirically investigates advance purchase behaviors based on the air ticket transaction data by using a continuous logit model. The estimation results show that advance purchase behaviors are significantly affected by price, price uncertainty, time of day (morning, afternoon and evening flight), days of week (flight on Friday), months of year (peak or off-peak seasons), and consecutive holiday. Accordingly, different pricing strategies should be used for different flights to maximize revenue.     

Air freight hubs in the FedEx system: Analysis of fuel use

This paper provides a data based analysis of FedEx air freighter activities from selected hub locations. The basic idea is that air freighters have a set of range and payload parameters and their corresponding fuel burn depends on weight and distance. Data from 2011 to 12 (FlightAware) are used for 180,000 + flights on origin, destination and aircraft type. The particular aircraft vary widely in payload, but additional parameters may be derived from industry web sites and BTS. The research uses flight activity at hubs such as Memphis and Indianapolis (among others) and computes the aggregate distance flown on specific aircraft. The linkage between the hub and aggregate fuel use (assuming that the out bound flights are allocated to the hub) will give some quantifiable measures of the costs allocated to the hub. The paper examines particular aspects of the air freight system that are especially vulnerable to a spike in the costs of aviation fuel. These observations suggest that traffic to regional air express and air freight hubs is likely to respond in complex ways to fuel costs.     

Towards a taxonomy-based preferred-customer model for suppliers in air cargo express service markets

Drawing on social exchange and push–pull–mooring theories, this paper develops a taxonomy-based preferred-customer model for B2B air express markets. Our model extends the conventional bilateral customer-supplier relationship perspective of customer portfolio management to include competition effects for more comprehensive (trilateral) strategic decision making. Based on this unified framework, our a survey of 180 customers of air cargo express carriers identifies three distinctive groups of preferred customers. In addition to the effect of competitors on air express carriers’ prioritization of customers, which is further complicated by a satisfaction paradox and spurious loyalty, we further establish classification indicators for differentiating preferred from non-preferred customers. Notably, although commonly used in practice, we find sales volumes to be ineffective for that purpose.     

An Examination of the Determinants of In‐Flight Duty‐Free Shopping: Hedonic and Utilitarian Motivations

This research note presents the findings of a study that empirically examined air passengers' in‐flight duty‐free shopping behaviors in the perspectives of utilitarian and hedonic motivations. On the basis of the primary data collected from 212 air passengers in Taiwan, empirical findings revealed that both utilitarian and hedonic motivations affect air passengers' intentions to browse in‐flight duty‐free shopping catalogues. Findings also showed that hedonic motivation does not directly influence air passengers' in‐flight purchase intentions. Instead, a higher utilitarian motivation can directly enhance passengers' in‐flight purchase intentions. Copyright © 2012 John Wiley & Sons, Ltd.     

Modeling the flight departure delay using survival analysis in South Korea

The air transportation industry in South Korea has been growing since the 2000s. Although the number of air passengers has continuously increased, the flight delay rate has fluctuated from year to year. In this study, a survival analysis was conducted to compare each flight delay in terms of airport/time slot and to evaluate the actual impacts of major variables on flight delays. We performed multiple analyses using survival analysis methodologies, including the Kaplan–Meier estimator, log-rank test, and Cox proportional hazards model. In particular, we applied a turnaround buffer as a key variable in Cox proportional hazards model analysis. The survival curve showed that more international flights departed earlier than scheduled or with minimal delay than domestic flights. However, international flights tended to have more long-term delays. The log-rank test indicated that international flights had a wider distribution of delay times than domestic flights. In the Cox proportional hazards analysis, under the condition in which the actual flight turnaround time was less than 120 min, the results indicated that the longer the actual turnaround buffer was, the less frequently the delays occurred. By using these analyses, we could numerically verify the actual delay trends in South Korea. The results can be used as fundamental resources for political and economic decision-making processes in the aviation industry.     

A passenger demand model for air transportation in a hub-and-spoke network

This paper develops an air passenger model that deals with city-pair demand generation and demand assignment in a single framework. Using publicly available and regularly collected panel data, the model captures both time series and cross-sectional variation of air travel demand. The empirical analysis finds that pattern of correlations among alternatives can be described by a three-level nested logit model. Fare, frequency, flight time, direct routing, on-time performance, income, and market distance have significantly effects on air demand. Correcting for the problem of endogenous air fares using instrumental variables yields more plausible estimates of price sensitivity and value of time.     

Willingness to pay for safety improvements in passenger air travel

The risk of being involved in an airplane accident is largely ignored in air passengers’ choice models. The reason presumably is that it is hard to operationalize, because objective safety indicators often involve extremely low probabilities that are hard to grasp and interpret by passengers. In this paper, we propose an operationalization that is based on the perception of safety, which is easy to understand and resonates that perceptions often influence decisions stronger than objective variables. We conceptualize that passengers form a safety perception score of a particular flight based on their perception of airline and route attributes and that this score in turn is traded-off against other flight attributes, such as ticket costs, to arrive at a flight choice. In line with this conceptualization, two stated preference experiments are conducted. In a first experiment, combinations of airline and route attributes are evaluated in terms of safety that is captured on a rating scale. In a second experiment, safety perception is treated as an attribute and traded-off against other flight attributes to arrive at a flight choice. The paper presents the results of a regression and a Panel Mixed Logit model estimated from responses obtained from a convenience sample of 161 air passengers recruited in the Netherlands. The results of both models are then combined to calculate the willingness to pay values for improvements made to a range of airline and route attributes, taking into account socio-demographic variables and psychological traits. As expected, the results indicate that the willingness to pay for improving safety decreases with higher initial safety levels.     

Optimising flight connection times in airline bank structure through Simulated Annealing and Tabu Search algorithms

In hub and spoke airline networks, flight arrivals and departures generally have a bank structure to increase connections among spoke cities through a hub airport in order to provide cheaper service for higher volumes of air traffic. In this study, we introduce the airline bank optimisation problem with a novel mathematical model for improving flight connection times. The mathematical model aims to minimise the total connection times for transfer passengers and generates flight schedules regarding slot capacities in the hub airports. Since the problem is a combinatorial optimisation problem NP-hard and computational complexity increases rapidly for real-world problems, we employ the simulated annealing and the tabu search algorithms to achieve better solutions in a reasonable time. We generate sub-problems using real-world data and investigate the effectiveness of the algorithms. Finally, we present the results of a real case study of a Turkish airline company which has a hub airport connecting the flights between Middle Eastern and European cities.     

Willingness to pay for airlines’ premium economy class: The perspective of passengers

This study investigates how much extra air travellers are willing to pay to upgrade to premium economy class by using a suitable econometric model. Since a large portion of travellers' willingness to pay for premium economy class is zero, the spike model is applied to overcome the issues that may occur when traditional statistical models are used. Three flight distances, short, medium, and long hauls were separately estimated to investigate the effects of flight distance on willingness to pay. Travellers’ willingness to pay to upgrade from economy class to premium economy class round-trip was US$138 ,¹ US$309, and US$545 for short-, medium-, and long-haul, respectively. The research results should be a helpful reference for the civil aviation industry in strategic pricing planning.     

Airport location in multiple airport regions (MARs): The role of land and airside accessibility

This paper approaches the airport location problem as a function of accessibility considerations. First, a structural equation model is established to find the relationship between the size of an airport catchment area and its flight network scale. Landside and airside accessibilities are measured by the qualities and costs of surface transportation and flight networks. The two accessibilities are combined to form a regional air transportation accessibility profile, which can be used as a criterion to evaluate airport locations at a macro-planning level. Finally, the scenarios of airport locations in terms of small and large areas are analyzed using two regional case studies in China.     

Evolution trends of the network structure of Spring Airlines in China: A temporal and spatial analysis

Both the sustainable development of China's economy and the deregulation of the China air transport market have acted as a spur for the halting development of low-cost carriers (LCCs) in China. To analyze the development trends of LCCs' network in China, this paper took Spring Airlines, the only LCC in China as an example. First, the winter flight plans of Spring Airlines from 2005 to 2013 were collected. Secondly, the development trends of air transport network of Spring Airlines were explored with methods of mathematical statistics and social network analysis. Additionally, the development trends were analyzed from the levels of navigable cities, air routes and air transport networks. The results show that although Spring Airlines actively launched air routes between tourist cities with non-class I airports, its network has been transformed from a star structure into a complex one with multi-hubs. The development process of the Spring Airlines network can be separated into three stages. In addition, the problems and evolution trends of its network are discussed further.     

Characterizing the Brazilian airspace structure and air traffic performance via trajectory data analytics

This paper presents a data-driven approach for multi-scale characterization of the Brazilian airspace structure and air traffic operational performance from aircraft tracking data recorded by surveillance systems. Unsupervised learning is performed with a flight trajectory clustering analysis to automatically identify spatial traffic patterns in both the terminal and the en route airspace for major origin-destination pairs of the Brazilian air transportation system. Based on the as-flown route structure learned, quantitative metrics are developed to describe the structural efficiency of the airspace and the operational efficiency of the traffic flows. For this, actual flight trajectories are projected onto reference nominal trajectories in space and time. The results allowed for cross-route comparisons of air traffic flow efficiency across multiple flight phases as well as for the identification of causal factors for trajectory deviations from nominal routes. An interactive data analytics tool is also created to output performance statistics and air traffic visualizations. With the provision of a systematic data-driven approach for characterizing actual air traffic operations, the analytics framework is envisioned to assist airspace design and performance monitoring processes and to provide the basis for developing predictive capabilities in support of traffic flow management.