Importance Of Strategic Fleet Planning

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Essentially, a strategic fleet planning is vital for airlines to yield a higher profit margin while providing a desired service frequency to meet stochastic demand. In contrast to most studies that did not consider slot purchase which would affect the service frequency determination of airlines, this paper proposes a novel approach to solve fleet planning problem subject to various operational constraints. A two-stage fleet planning model is formulated for which the first stage selects individual operating route that requires slot purchase for network expansions while the second stage, in the form of probabilistic dynamic programming model, determines the quantity and type of aircraft (with the corresponding service frequency) to meet demand …show more content…

A strategic fleet planning is vital as it has a great impact on the economical efficiency of airlines [1]. In addition, an oversized aircraft supply implicates an increased cost while an undersized aircraft composition results in not only unsatisfied demand but also a substantial financial loss to airlines [2, 3, 4].
Travel demand and service frequency are found to be two influential factors in an optimal fleet planning [5, 6, 7]. How to estimate and monitor them in fleet planning would affect the accuracy of the optimal decision. This is because there is a close relationship between the aircraft type and quantity with the travel demand as well as the service frequency in fleet planning. Past research had shown that if travel demand is estimated stochastically to account for uncertainty, the optimal solutions are more accurate and reliable [6, 8, 9]. In addition, it has an added advantage if varying passengers‟ classes (i.e. business and economy) is considered [10, 11]. From airline‟s business principles, the airfare of different passenger‟s class is a crucial element …show more content…

Khoo and Teoh [14] considered annual service frequency of airline in their fleet planning optimization model. Although the forecasted flight frequency could meet annual stochastic demand under uncertainty, they did not capture service frequency constraint that would limit aircraft operations of airline. In other words, the annual service frequency of airline which did not capture the control of flight frequency explicitly may not be practical under circumstances, especially when the number of flights of airlines is limited at busy airports.
In view of the above limitations of service frequency modeling and estimation in the existing fleet planning model, there is a need to relook on how to model and incorporate the service frequency accurately in the model. This is crucial especially it involves airline‟s plan to expand their services to serve new destinations. Practically, the service frequency of airlines is strictly constrained by regulatory limits, especially the arrival/departure restriction slots at particular airports. For instances, the operating quota of aircraft movements at Orly International Airport, France is 36 takeoffs and
34 landings per hour during peak hours [15]. Therefore, it is apparent that

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