16.75J | Spring 2006 | Graduate

Airline Management

Lecture Notes

With the exception of three lectures marked below, the copyright on all the lecture notes is held by Dr. Peter Belobaba. All materials are used with permission.

1 Course Introduction

- Review of Syllabus and Subject Requirements
- Introduction to Airline Planning Processes and Systems

Introduction to the Airline Planning Process (PDF)
2 Airline Economics Review

- Demand and Market Share Models
- Differential Pricing and Revenues

Airline Economics Review (PDF)
3 Operating Costs and Productivity

- Components of Airline Operating Costs
- Measures of Aircraft and Labor Productivity

Operating Costs and Productivity (PDF)
4 Load and Spill Analysis

- Demand Stochasticity and Flight Leg “Spill Models”
- Estimation of Unconstrained Demand

Load Factor Analysis (PDF) (Courtesy of Boeing. Used with permission.)

Airline Demand Analysis and Spill Modeling (PDF)

5 Airline Schedule Development

- Network Supply Definitions and Concepts
- Timetable Development Issues and Constraints

Airline Schedule Development (PDF)
6 Passenger Choice Models

- Decision Window Market Share Model
- Consumer Choice of Path/Fare Options

Introduction to PODS Passenger Choice Models (PDF)

Decision Window Model (PDF) (Courtesy of Boeing. Used with permission.)

7 Introduction to ePODS Airline Management Game

- Baseline Networks and Schedules
- Overview of Inputs and Outputs

ePODS Airline Management Educational Game (PDF)
8 ePODS Work Session

- Present and Discuss Baseline ePODS Results
- Software Installation and Instructions

9 Fleet Assignment Optimization (Prof. Barnhart)

- Incorporation of Spill and Recapture Rates
- Leg Independent vs. Itinerary-based Approaches

Airline Fleet Assignment (PDF) (Courtesy of Cynthia Barnhart. Used with permission.)
10 ePODS Work Session

- Presentation of Round 1 Input Strategies
- Results: Initial Fleet Assignment

11 Route Planning and Network Strategies

- Route Evaluation in Hub Networks
- Route Profitability Estimation Issues

Route Planning and Evaluation (PDF)
12 ePODS Work Session

- Presentation of Round 2 Input Strategies
- Results: Hub Schedule Shifts and Fleet Assignment

13 Scheduling and Operational Constraints

- Aircraft Rotations and Irregular Operations
- Demand Driven Dispatch - Flexible Fleet Assignment

Demand Driven Dispatch (PDF)
14 ePODS Work Session

- Presentation of Round 3 Input Strategies
- Results: Route Selection and Evaluation

15 Mid-Term Exam (In Class)  
16 Airline Fleet Planning Issues

- Commercial Aircraft Categories and Characteristics
- Technical and Performance Characteristics
- Implications for Fleet Changes in ePODS

Airline Fleet Planning Models (PDF)
17 AMG Work Session

- Presentation of Round 4 Input Strategies
- Results: Impacts of Fleet Changes

18 Revenue Management Concept and Models

- Introduction to Seat Inventory Control Process
- EMSR Flight Leg Optimization

Introduction to Revenue Management: Flight Leg Revenue Optimization (PDF)
19 Overbooking Methods

- Overview of Theory and Current Practice
- Evolution of Probabilistic/Cost-Based Models

Flight Overbooking: Models and Practice (PDF)
20 O-D/Network Seat Inventory Control

- Network Optimization Models
- O-D Control Development in Practice

Network Revenue Management: Origin-Destination Control (PDF)
21 ePODS Work Session

- Presentation of Round 5 Input Strategies
- Results: Full-up Scheduling and Route Selection


Open Session

- Guest Lecture on Pricing/RM

23 Airline Pricing Structures and Strategies

- Differential Pricing and Fare Restrictions
- Implications for Price Changes in ePODS

Pricing Challenges: ePODS and Reality (PDF)
24 Airline Revenue Management Systems

- Evolution of Capabilities and Current Status
- Relationships to CRS and Distribution

Origin-Destination Control: What Have We Learned? (PDF)
25 ePODS Work Session

- Presentation of Round 6 Input Strategies
- Results: Limited Fare Modifications

26 Summary: Airline Management Challenges

- Discussion of ePODS Lessons
- Relationship to Current Airline Industry Issues

Willingness to Pay and Competitive Revenue Management (PDF)

Course Info