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180 The Airline Planning Process
aircraft rotations, crew schedules and maintenance plans, not to mention passenger trips.
Under conditions of disruptions and/or flight cancellations, the primary objective for the
airline is to return to “normal” operations as quickly as possible. In this effort to get the
airline “back on plan” with respect to the planned timetable, flight cancellations or aircraft
rerouting sometimes take precedence over passenger convenience.
6.4 The Future: Integrated Airline Planning
As described in this chapter, the current airline planning practice is to make decisions
concerning fleet planning, route evaluation and schedule development sequentially . The
sequential nature of the process is driven in large part by the different time horizons (prior
to departure date) involved for fleet planning (2 - 5 years), route evaluation (1 - 2 years)
and schedule development (2 - 6 months). After these airline planning decisions have been
made, more tactical decisions concerning pricing and revenue management (as described
in Chapter 4) are then made even closer to departure. In the future, the development of
integrated models will allow for a joint optimization of schedules, capacity, prices and
seat inventories.
It should be clear that a joint decision approach can have substantial benefits for the
airline. For example, better feedback from pricing and revenue management systems can
affect the optimal choice of schedule and aircraft capacity. At the same time, improved
decisions related to schedule and capacity can reduce the need for excessive discounting
and “fare wars.”
Joint optimization and planning is a big challenge, both theoretically and practically, for
the following reasons. Despite having an enormous amount of detailed booking, revenue
and operations data, few airlines have “corporate databases” that provide a single source
of consistent and detailed demand/cost data, as required for joint decisions. Furthermore,
a great deal of research is still required to identify and calibrate models that can capture
market dynamics and competitive behaviors that are necessary for joint optimization
of airline planning decisions. Finally, there are obstacles within many airlines in terms
of organizational coordination and a willingness to accept a large-scale decision tool
that claims to “solve” several airline planning problems si