Improving Through-Flight Schedules

In the wake of airline deregulation, most carriers have been forced to reexamine both their pricing strategies and operating schedules. With reference to the latter, one of the factors that has been largely overlooked as a source of additional revenue is the convenience of a through flight over a connecting flight. The purpose of this paper is to explore this issue by developing an algorithm that can be used to effectively pair inbound and outbound routes at hub cities over the course of the day. We take the view that if demand is dependent from one period to the next then significantly higher revenues can be realized by making appropriate adjustments in the scheduling algorithm.

The methodology is based on a forward looking heuristic designed to skirt the combinatorial difficulties that arise in problems of this magnitude. The algorithm is first demonstrated on a 6 city, 3 period problem, and then applied to the Dallas/Fort Worth hub, the home base of American Airlines who supplied the data. In the full analysis, 62 cities were scheduled over 10 time periods. The results yielded benefits of up to 60% over current procedures and confirmed the value in trying to quantify the model's underlying parameters.