Designing aviation networks under Public Service Obligations (PSO): A case study in Greece

The present paper explores a Greek case study on optimizing the design of aviation networks under Public Service Obligations (PSO). Based on previous research on airline PSO networks applied to the case studies of the Azores and Norway, optimization models are adapted to minimize not only the cost to the airline, but also the total social costs. Different predictive models to estimate demand are developed and included in the optimization models. It is found that after applying the developed demand and optimization models, the total network costs can be reduced significantly, compared to the actual network's operation ranging from 4% to 20%.