Airline Route Planning

1. Airline Route Planning Planning a journey that could optimize airline profit while bearing the costs Balancing the demands and capacities

2. Its significance Determine the feasibility and possibility to fly Determine what is required and what can be offered Determining the kind of costs and expenses Determine ways to gain profit

3. Introduction • A route is a description of the path followed by an aircraft when flying between airports. Most commercial flights will travel from one airport to another but private aircraft, commercial sightseeing tours, and military aircraft may often do a circular or out-and-back trip and land at the same airport from which they took off. • This is where airlines deal with the application of forecasting method in determining the costs of a route of one flight from one destination to another either • Domestic or • International • In terms of … • Flight personnel • Fuel consumption • Facilities and Airport cost • Passenger Movement and Air Cargo

4. Importance of Route Planning Fuel prices are driving up costs just as business is starting to return to normal after a number of events in the recent past that had a major impact on international civil aviation. One of the steps that airliners are taking are to continue to ensure that the most cost-effective route between points of departure and destination is available. Due to many conflicting demands on the use of airspace by its many different users, as well as political, environmental and security considerations, it is frequently not possible to fly the most desirable route, and this adds to the additional fuel and maintenance costs incurred by operators.

5. Route Planning Considerations Route planning must take many factors into account: Passenger demand: The ability to obtain maximum airline profit from high passenger load factor Distance/ Mileage: The particular route to be flown determines the ground distance to cover, effecting on time and marketability of the route Feasibility: Government and regulation permission for feasible airline route Weather forecasts: The air temperature affects the efficiency/fuel consumption of aircraft engines. The wind may provide a head or tail wind component which in turn will increase or decrease the fuel consumption by increasing or decreasing the air distance to be flown Passenger safety: Passenger risk assessment

6. Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. • Airway • Airway routing occurs along pre-defined pathways called Airways. Airways can be thought of as three-dimensional highways for aircraft. In most land areas of the world, aircraft are required to fly airways between the departure and destination airports. 

8. Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. • Navaid • Navaid routing occurs between Navaids (short for Navigational Aids, see VOR) which are not always connected by airways. Navaid routing is typically only allowed in the continental U.S. If a flight plan specifies Navaid routing between two Navaids which are connected via an airway, the rules for that particular airway must be followed as if the aircraft was flying Airway routing between those two Navaids. Allowable altitudes are covered in Flight Levels.

9. Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. • Navaid

11. Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. • Direct • Direct routing occurs when one or both of the route segment endpoints are at a latitude/longitude which is not located at a Navaid. Some flight planning organizations specify that checkpoints generated for a Direct route be a limited distance apart, or limited by time to fly between the checkpoints (i.e. direct checkpoints could be farther apart for a fast aircraft than for a slow one).

12. Determine the FEASIBILITY The 9 freedoms of the air in airline business: The Freedoms of the air are a set of commercial aviation rights granting a country's airline(s) the privilege to enter and land in another country's airspace

13. Freedom 1 It was also known as technical freedom. The right to overfly a country without landing. It grants the privilege to fly over the territory of a treaty country without landing. Member states of the International Air Services Transit Agreement are granting this freedom (as well as the Second Freedom) to other member states,subject to the transiting aircraft using designated air routes

14. Freedom 1

15. Freedom 2 It was also a technical freedom. The right to stop in a country for refueling or maintenance on the way to another, without transferring passengers or cargo.

16. Freedom 3 It was the First Commercial Freedom. The right to carry passengers or cargo from one's own country to another.

17. Freedom 4 The right to carry passengers or cargo from another country to one's own. Third and fourth freedom rights are almost always granted simultaneously in bilateral agreements between countries.

18. Freedom 5 It is also called a connecting flight. The right to carry passengers from one's own country to a second country, and from that country to a third country. An example of this could be Emirates Airlines flights originating in Dubai, then going on to Bangkok, and then from Bangkok to Sydney, where tickets can be sold on any or all sectors. Two sub-categories exist. Beyond Fifth Freedom allows the right to carry passengers from the second country to the third country. Intermediate Fifth Freedom allows the right to carry passengers from the third to the second country.

19. The Silk Road extending from Southern Europe through Arabia, Somalia, Egypt, Persia, Pakistan, India, Bangladesh, Java and Vietnam until it reaches China. Land routes are red, water routes blue

20. Freedom 6 The right to carry passengers or cargo from a second country to a third country by stopping in one's own country. Cathay Pacific Airways, Thai Airways, Malaysia Airlines, Singapore Airlines and other airlines in Asia use sixth-freedom rights extensively to fly passengers between Europe and Australasia. Likewise, American Airlines connects passengers from Europe and Asia to other countries in the Americas via U.S. ports, and British Airways commonly tickets passengers from America to Asia via London. Iceland air sells tickets between Europe and North America via Iceland, Finnair sells tickets from North America to Asia via Helsinki.

21. The Kangaroo Route traditionally refers to air routes flown by Qantas between the countries of Australia and the United Kingdom, via the Eastern Hemisphere.

22. Freedom 7 The right to carry passengers or cargo between two foreign countries without continuing service to one's own country. The seventh freedom is rare because it is usually not in the commercial interest of airlines, except in Europe where an EU open sky has seen many carriers, particularly low cost carriers, operate flights between two points, with neither of them being in their home country.

23. Freedom 8 The right to carry passengers or cargo between two or more points in one foreign country. The eighth freedom is also known as cabotage, and is extremely rare outside of Europe. The main real life example of eighth-freedom rights is the European Union, which has granted such rights between all of its member states.

24. Freedom 9 The right to carry passengers or cargo within a foreign country without continuing service to or from one's own country. Sometimes also known as stand alone cabotage. It differs from the aviation definition of true cabotage, in that it does not directly relate to one's own country. The EU agreements mentioned above also fall under this category.

25. Freedoms of the air

26. Determine the DEMANDS • Passenger Demand: • How many? • How many seats available? • The kind of aircraft to be used? • The kind of facilities needed? (i.e., catering, baggage handling, airport facilities) • Fuel: • How much is the consumption? • How far is the journey?

27. Determine YOUR CAPACITY Cabin Crews Facilities-Airport services Ground Handling-MRO

28. Determine the COSTS • Remember the categories of costs in airline business? • Two major costs • Direct, indirect and non-operating costs • Major and unpredictable costs

29. DIRECT COSTS • Expenses associated with and dependent on the type of aircraft being operated, including all flying expenses such as • Flying operations costs • Flight crew expenses • Fuel and oil • Airport and en route charges • Aircraft insurance costs • Other flight-operations expenses • MRO costs

30. INDIRECT COSTS • Those costs that will remain unaffected by a change of aircraft type because they are not directly dependent on aircraft operations such as • Station and ground expenses • Reservations, sales and promotional costs • General and administrative costs

31. Non-operating costs • Those expenses and revenues not directly related to the operation of an airlines’ own air transportation services like • Gains or losses raising from the retirement of property or equipment • Interest paid on loans, banks or deposits • Gains or losses raising from an airline’s affiliated companies • Direct gov. subsidies and payments

32. Costs for Cargo Airline Commodities Containers (if any) MRO (Overnight) Fuel Crew Expenses (Pilot and Co-Pilot)- Lesser than passenger airline

33. PROFITS GAIN • Service charge • Ticket Pricing • Destination • Fuel • Seat • Catering • Insurance • Airport Tax

34. Example of Calculations

35. Question 1 • Route planning plays an important role in any aviation enterprise that provides a strategic decision-making in accurate airline route management. • Briefly explain in your own words the concept of airline route planning and it’s implication to airliners.(5 marks) • b) Discuss the three types of route available for airline routing management(6 marks) • c) From your opinion, which is the most difficult freedom of air feasibility permission to be obtained by airliners? State your reasons. (4 marks)

36. Question 2 • Airline Route Planning deals with the application of forecasting method in determining the feasibility of a route of one flight from one destination to another. • Discuss in your own words the significance in Freedoms of the air in air route feasibility (8 marks) • b) Provide a route example for each freedom of air. (4 marks) • c) From your opinion, why it is so importance for airline route planning management and state your reasons. (3 marks)

37. Question 3 • Airline Route Planning provides airliners with the global overview and practical detail necessary to improve their traffic systems and fleets, and thus to enhance the operating and economic efficiency of airlines. • Describe your understanding on the implication of airline route planning to airliners. (5 marks) • b) Discuss in your own words the similarities and differences of the fifth and sixth freedom of air. (6 marks) • c) From your opinion, why does weather forecast is an important factor in airline route planning? State your reasons (4 marks)

38. Question 4 • Airlines determine their own fate on how profitable a particular route is by how well they manage the revenue management process. Revenue Management is the process by which an airline manages its inventory on routes. • What is the three most importance factors need to be considered before planning your airline routing. (8 marks) • b) Which freedom of air is known as “stand alone cabotage”? Briefly explain it. (4 marks) • c) From your opinion, what are your creative strategies to improve the airline routing that could attract more passengers. (3 marks)

39. Question 5 • Often the research to determine whether any particular route is profitable or not is a vital question to consider. Airlines believe to study the latest trends and critical factors to look for during route feasibility analysis. • Explain in your own words the common factors need to be considered during route feasibility analysis (9 marks) • b) If MAS is planning to carry passengers from Kuala Lumpur and Singapore to Melbourne, Australia, which freedom of air should MAS comply? State your reasons. (3 marks) • c) From your opinion, which routing type would you opt to use for your airline company. State your reasons (3 marks)