The Importance Of Airline Route Planning

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Airline route development or route planning serves as a significant role to airline industries which has been analysed and evaluated ideally and carefully to calculate cost and determine the benefit to double ensure that it will increases the profitability of airline schedules. Significant factors must been taken into consideration when an airline is planning to add new routes or cities to its existing network in order to find an appropriate new route successfully and ensure maximum effective profitability. Such factors may including current route competition and market demand, examine the capabilities of airports, forecast of market stimulation, economic trend of airline expected catchment area, market share cannibalism and airline strategy…show more content…
Peoples (2014) acknowledges that the economics of air transportation is becoming increasingly important to the world’s economy. Although it does not directly contributes to either the logistics services or the air passenger transport production, but well-known as provides indispensable inputs to trade and tourism as well. By taking the economic considerations into planning new flight route, origin-destination (OD) market demand is one of the factors and definitely the primary source of revenues and demand for a given route. The OD market demand may just the beginning of the calculation if the new route services as a HUB. This is because a HUB will at least connect the origin to over 50 or more destinations. Hence, this will result in an unprofitable OD market to cover up its losses with the added revenue that produced from the subsequent connecting air passenger fares. All main airline HUBs can be improved and strengthened by connecting flights to an alliance airlines or their own main HUB which potentially increase the possibility of market share that can be captured from a single route. This is so-called the HUB strengthening which enable airlines to work as a team with their alliances to increase revenue for themselves and their partners and simultaneously open up more routes to their passengers. In addition, the fundamental economic criterion for a planned route…show more content…
Airlines may implement the strategy plan of capture a niche market which only available for certain amount of time for example the FIFA World Cup, this may lead one of the airlines to open routes to the host country from its home country in an attempt to obtain the market for that magnificent event. Forecasts for these events are normally for the intended length of the event and can be an easier process as many known variables to change in the long term will be assumed to be fixed, this includes slot fees, fuel and aircraft maintenance costs. However, longer forecasts can be presented but more unknowns will enter the equation which resulting in more possible errors. Moreover, just a slight miscalculation will allows the forecasting system prone to numerous errors as any of the input data can lead to any figures that improperly represent the expected financial performance routes. Thus, the millions one small error made by the airline can lead to a huge cost. Market share cannibalism in route planning is regarded as an issue that is hard to account for in such profit forecasts. It normally occurs when an airline decides to create a new route to the same region as an already existing route, and passengers that usually travelled through the old route convert their travelling part via the airlines new route. This is generally the case if the

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