Escolar Documentos
Profissional Documentos
Cultura Documentos
Weakness:
Airlines have a high "spoilage" rate compared to most other industries. Once a
flight leaves the gate, an empty seat is lost and non-revenue producing.
Aircraft is expensive and requires huge capital outlays. The return on investment
can
be
different
than
planned.
Large workforces spread over large geographic areas, including international
points, require continual communication and monitoring. This can be exacerbated
during operational irregularities,
e.g.
bad
weather.
While the business climate can change quickly, airlines have difficulty making
quick schedule and aircraft changes due to leases, staffing commitments and other
factors.
Opportunities:
Airline market growth offers continual expansion opportunities for both leisure and
business destinations. This is particularly true for international destinations.
Technology advances can result in cost savings, from more fuel efficient aircraft to
more automated processes on the ground. Technology can also result in increased
revenue due to customer-friendly service enhancements like in-flight Internet
access and other value-added products for which a customer will pay extra.
Link-ups with other carriers can greatly increase passenger volumes. By
coordinating schedules, airlines can offer service to destinations via a code share
agreement with a partner carrier.
Threats:
OCCUPANCY FACTOR
Example 1: The air distance between the two cities, A and B, is 1200 kilometers
and the type of the aircraft used is Boeing 747 which has 285 seats and the number
of passengers in this flight is 203.
A
B 1200 kilometers
CREW SCHEDULING
An airline must cover each flight leg with a full complement of cabin crew in a
manner consistent with safety regulations and award requirements. Methods are
investigated for solving the set partitioning and covering problem. A test example
illustrates the problem and the use of heuristics.
The Study Group achieved an
understanding of the problem and a plan for further work.
1. Introduction
This problem was presented to the 1992 MISG at Macquarie University by The
Preston Group Pty Ltd. The Preston Group is a systems development company
providing
cost effective workstation-based interactive scheduling and simulation products. Its
products for the international airline industry include
Total Airspace and Airport Modeller (TAAM)
Terminal Management Systems (TMS)
Air Crew Scheduler (ACS)
The Air Crew Scheduler is an interactive computer software system for air crew
scheduling. The system is used by planners to develop and modify crew pairings
for flight crews and cabin crews.
Currently the Air Crew Scheduler facilitates the production of legal crew
schedules.
The input tasks are a set of flight legs. A flight (sector, segment) leg corresponds
to a flight between two cities, departing one city at a specified time and arriving at
the
other city at a specified time. A duty period is made up of a set of flight legs.
Safety requirements limit the number of flight legs in a duty period and the
duration of the period. A pairing (pattern) is a sequence of required duty periods
that a crew must complete that starts and ends at the same domicile. A regulation
specifies the maximum duration of a pairing and the minimum rest period between
duty periods.
In long haul operation, the duration of a pairing may be as long as 21 days and a
minimum rest period may be 46 hours.
A rest period between duties is called a slip. A bid line (roster line) is
a set of pairings that represent the work schedule for the crew over the planning
horizon.
The various airlines have developed different methods of operation which are
described
as hub and spoke, short haul and long haul. Long haul operations are characterised
by factors such as
days away from base
multi-base operations
language requirements of crew
paxing (passengering crew between operating flights)
complex duty and rest rules
crew splitting due to different size aircraft.
Many airlines plan their
crewing via a three stage process:
development of pairings or crewing patterns which specify a crew schedule from
base until return to base
development of bid lines which link pairings and specify a crew schedule over
the planning horizon
development of a roster from the preferences expressed by the crew for the bid
lines.
The costs of flight crew and cabin crew form a major component of the direct
operating
costs of an airline. Air crew planners continually strive for more effective use
of available crews to reduce the total number of crews needed and to minimise
costs
of crew stopovers and allowances. However, the planners' tasks usually involve
much
time-consuming and laborious manual work. This reduces the time available to
research
various crewing options which may produce much more effective crewing
pairings.
The planner starts with a schedule or plan of aircraft movements for a period of
time. The planner then constructs pairings of air crew movements from any crew
home base, along a number of sectors, with suitable rest or slip periods, and return
to home base, usually some days later. In developing these pairings, the planner
must ensure that numerous government regulations, union/management
agreements and safety rules are met.
The rules which specify duty and rest periods are determined by government and
management. Some rules are hard (must) while others are soft (should). Examples
of a duty rule and a rest rule follow.
Given that Duty is Paxing and Duty is Operating and Last Sector in Duty is not
Operating and Duty is not To Home then:
Operating time in Duty must be less than l2 hours
Given that Previous Duty is valid and Slip Time in Previous Duty <46 hours then:
Slip Time in Duty should be > 46 hours
Planners have traditionally used spider graphs to assist in the manual process of
crew scheduling. The planner creates pairings by selecting a flight from the home
base
and then adding legal flight legs until the planner selects a flight leg to home base.
Skill is required to select cost effective pairing which cover all flight legs over the
planning
horizon, say 8 weeks.
The Preston Group has developed a computer assisted system which incorporates
the rule base for determining legal trips and graphics to display spider graphs. The
system
selects trips from the mainframe
partitions the trips in different geographical areas
re-uses previous pairings
produces multiple solutions
compares the ratio of flight time to total time (premium)
returns the pairings to the mainframe
The sets of resulting pairings for a planning period are the basis for assigning
actual
crew names and are made available to a preferential bidding system, assembled
into pairing strings in a bid line system, or assigned to specific crew members in an
assignment system.
The Study Group was asked to address the particular issues of
long haul operations where crews may be away from home base for as long as 21
days
crew splitting in which a crew of 17 may finish a flight leg and then start new
flight legs as crews of 8 and 9 on smaller planes.
The airline crew scheduling problem is to find a minimum cost set of pairings
which
cover all flight legs.
The problem can be formulated as a set partitioning problem (SPP). The input data
is an A matrix whose rows are the flight legs and columns are the pairings. Let the
input
data be represented by
Airline crew scheduling
m = number of flight legs
n = number of pairings
Cj = cost of pairing j
a.. = {I flight leg i contained in pairingj
I) 0 otherwise
The decision variables are
1 if pairing j is flown
o otherwise
The set partitioning problem (SPP) is
minimise L:CjXj
j
(1)
subject to
L:aijXj = 1 fori= 1,2, ... .m
j
(2)
Xj = {O,l} forj=1,2, ... .n (3)
The integer programming problem (1-3), can be solved by first solving the relaxed
linear programming problem where (3) is replaced by
Xj ~O forj= 1,2, ....n (4)
and then using branch and bound to remove fractional solutions. Experience shows
that
constraint branching is more efficient than variable branching for these problems,
and it
is usually the extent of the branch and bound process that limits the size of the
problems that can be solved this way. We take a closer look at branch and bound
approaches in
Section 5 of this report.
COMPLEXITY OR CONSTRAINTS
In Air Travel for instance, there are numerous rules or "constraints" that are
introduced. These mainly deal with legalities relating to work shifts and time, and a
crew members qualifications for working on a particular aircraft. Add numerous
locations to the equation and Collective Bargaining and Federal labor laws and
these become new consideration for the problem solving method. Fuel is also a
major consideration as aircraft and other vehicles require a lot of costly fuel to
operate. Finding the most efficient route and staffing it with properly qualified
personnel is a critical financial consideration.
The problem is computationally difficult and there are competing mathematical
methods of solving the problem. Although not easy to describe in one sentence, the
goal is the essentially same for any method of attacking the problem:
Within a set of constraints and rules, move a set roster of people with certain
qualifications, from place to place with the least amount of personnel and
aircraft
or
vehicles
in
the
least
amount
of
time.
Lowest cost has traditionally been the major driver for any crew scheduling
solution.
Although not a "rule", We can describe at least 4 parts of the equation that are
ingested by the computational process:
People and their qualifications and abilities.
Aircraft or vehicles and their "People" qualification requirements and their cost to
operate over distance.
Locations and the time and distance between each location.
Work rules for the personnel, including Shift hours and seniority.
In crew scheduling the rules and constraints are typically a combination of:
government regulations concerning flight time, duty time and required rest,
designed to promote aviation safety and limit crew fatigue,
crew bid requests, vacations,
labor agreements
aircraft maintenance schedules
crew member qualification and licensing
other constraints related to training
pairing experienced crew members with more junior crew members
returning crew to their base at the end of their trip (called deadheading)
The first phase in crew planning is building the crew pairings (also known as trips,
rotations, among other popular descriptions). This process pairs a generic crew
member with a flight so that at the end of this process all aircraft flights are
covered and all trips (combination of flights starting at a crew base and returning to
that crew base or co-terminal are crew legal. The next step is the allocation of those
trips to the individual crewmember. For the US, Canada and Australia, seniority
generally rules. The two processes (which are completely different) are referred to
as bid lines and preferential bidding. In seniority order, pilots bid for either a line
of time (bidline) or trips and days off (preferential bidding. these are awarded
based on seniority and modified only when their selections have already been
taken by a more senior crew member (bidlines) or their trip and day off selections
(preferential bidding) do not make up a complete line (hours, days off, etc.
parameters agreed to by the company and the union). The senior folks have more
time off, better choice of time off and fly better trips than the junior crew members,
generally speaking. In the US, this is considered fair. I personally would not want
to be around US pilots suggesting a move to the fair roster system common in the
rest of the world. For European airlines and other airlines in the rest of the world,
the allocation process is completely different. The company builds the pilot
schedules directly to meet their needs, not the pilot's needs. Before assigning a
single trip, the schedulers put all planned absences (vacation, training, etc.) onto
the crew members' schedule. Only then are trips assigned to the individual crew
members. As such, fairness means that the most senior captain and the most junior
captain have the same amount of duty time, block hours, night time, time away
from base, layovers, expense pay, etc. in a given schedule period. Seniority is out
and all work is completely homogenized. For them, anything else is unfair,
undemocratic. That's not to say that a good bottle of liquor to crew scheduling
won't get a pilot that specific trip or day off they want. Slowly over the last thirty
years, foreign airlines using the "no seniority" rostering system have allowed some
measure of seniority to creep into the allocation process from pilots who may now
ask for a specific day off or trip once a quarter or make multiple requests within a
schedule period. Although this may sound very much like preferential bidding, it is
not. The disparity between junior and senior crew members is still very limited and
thus achievement of your choices is limited. Candler Brooks, crew scheduling guy
for thirty years
Additional unplanned disruptions in schedules due to weather and air traffic
control delays can disrupt schedules, so crew scheduling software remains an area
for ongoing research.
Column generation
For realistically sized problems, it is not possible to include all possible
columns
that represent legal pairings. The problem is to generate a "good" set of
pairings. A file
containing flight information was obtained from The Preston Group. Part of
this file,
with flights numbered for reference, is shown below.
1 QFA0009 744 SYD(31/03/91 13:15)->MEL(31/03/91
2 QFAOOOl 744 MEL(31/03/91 13:45)->SYD(31/03/91
3 QFA0009 744 MEL(31/03/91 16:00)->SIN(31/03/91
4 QFAOOOl 744 SYD(31/03/91 16:30)->BKK(31/03/91
5 QFA0009 744 SIN(31/03/91 23:05)->LHR( 1/04/91
19 QFAOOOl 744 BKK( 2/04/91 00:30)->tHR( 2/04/91
98 QFAOOI0 744 MEL( 9/04/91 06:45)->3YD( 9/04/91
99 QFAOOI0 744 LHR( 8/04/91 22:30)->SIN( 9/04/91
100 QFA0002 744 BKK( 9/04/91 08:20)->SYD( 9/04/91
A program has been written to generate pairings from the information in this
datafile.
The program generates the pairings by constructing a tree in which a given
flight destination
is linked to all subsequent legal flights whose source is the same as this
location.
Once a tree is constructed for a given starting flight, the pairings are extracted
by
traversing the paths from the initial node to each of the final nodes and
extracting the
flight numbers at each node.
The program is at present linked to a rule base consisting of a subset of the
full
Preston Group rule base and has been used to generate relatively small sets of
pairings
using only 100 flights in a 10 day interval. These pairings provide reasonably
sized
data matrices for testing set partitioning and set covering algorithms to find
the optimal
schedules.
A legal pairing generated by the program is shown below. The slip and duty
times
are in hours and the cost is calculated as the ratio of total time to duty time.
4 SYD-BKK slip 0.00 duty 9.42 cost 1.00
19 BKK-LHR slip 25.58 duty 12.42 cost 2.18
44 LHR-MAN slip 48.00 duty 1.00 cost 4.22
50 MAN-LHR slip 10.50 duty 0.92 cost 4.54
74 LHR-SIN slip 51.17 duty 13.17 cost 4.66
92 SIN-MEL slip 25.58 duty 7.00 cost 4.66
98 MEL-SYD slip 1.50 duty 1.33 cost 4.59
This pairing gives a columnj with
Cj =459
a..-{ 1 fori=4,19,44,50,74,92,98
IJ - 0 for all other i = 1, ... , 100
.
Further work
The Study Group achieved
an understanding of the airline crew scheduling problem
a set of test problems for evaluation of solution methods
hands on experience in the generation of pairings
a literature search of exact and heuristic solution methods for set partitioning
The requirements for further work on this problem are
data sets of flight leg information and award rules
costing information
working pairings used by airlines
documentation on the bidding process
The plan is to decouple the award rule base from the airline crew scheduler and
use the rules to generate aircrew pairings. The next stage will incorporate heuristic
algorithms to provide improvement capability.
RETURN ON INVESTMENT
Return on investment (ROI) measures the gain or loss generated on an investment relative to
the amount of money invested. ROI is usually expressed as a percentage and is typically used
for personal financial decisions, to compare a company's profitability or to compare the
efficiency of different investments.
Consumers benefit from lower oil prices with lower fares, more
routes, and spend 1% of world GDP on air transport.
Economic development big winner from the doubling of city
pairs and halving of air transport costs in past 20 years.
Governments gain substantially from $116bn of taxation this
year and from more than 58 million supply chain jobs.
Equity owners see a far better 2015 with a 7.5% average airline
ROIC, above the cost of capital for the first time.
Fuel use per ATK to fall a further 1.5% y-o-y, saving 11 million
tonnes of CO2 emissions and $3 billion of fuel costs.
Load factors forecast to stabilize as capacity rises; new aircraft
deliveries represent a $180 billion investment.
Jobs in the industry should reach 2.5 million, productivity will be
up 3.2% and GVA/employee almost $97,000.
Infrastructure use costs are rising, plus inefficiencies in Europe
alone add 2.9bn to airline costs this year.
N American region performs best with a 7.5% net post-tax profit
margin in 2015. Africa weakest at just 0.8%.
value chain in order to attract the $4-5 trillion that will be needed
over the next 20 years to meet the growing demand for aviationenabled connectivity.
The call came in an IATA study supported by analysis from
McKinsey & Company, Profitability and the Air Transport Value
Chain, which shows that returns on capital invested in airlines
have improved in recent years, but are still far below what
investors would normally expect to earn.
The airline industry has created tremendous value for its
customers and the wider economies we serve. Aviation supports
some 57 million jobs globally and we make possible $2.2 trillion
worth of economic activity. By value, over 35% of the goods
traded internationally are transported by air, said Tony Tyler,
IATAs Director General and CEO. But in the 2004-2011 period,
investors would have earned $17 billion more annually by taking
their capital and investing it in bonds and equities of similar risk.
Unless we find ways to improve returns for our investors it may
prove difficult to attract the $4-5 trillion (1) of capital we need to
serve the expansion in connectivity over the next two decades,
the vast majority of which will support the growth of developing
economies.
During the 2004-2011 period, returns on capital invested in the
airline industry worldwide averaged 4.1%(2) . This is an
improvement on the average of 3.8% generated in the previous
business cycle over 1996-2004(3) . However, this is nowhere near
the average cost of capital of 7.5% which represents the return on
capital that investors would expect to earn by investing in assets
of similar risk outside the airline industry. While some airlines
have consistently created value for equity investors, these are
few in number. On average industry returns were just sufficient for
the industry to service its debt, with nothing left to reward equity
investors for risking their capital.
The study showed that over the past 40 years virtually all
industries have generated higher returns on invested capital
(ROIC) than the airline industry. Moreover, airlines are the least
profitable segment of the air transport value chain while other
segments consistently generate good returns for their investors.
The biggest cost for airlines today is fuel and companies in this
sector benefited from an estimated $16-48 billion of their annual
net profits generated by air transport. The most profitable part of
the rest of the value chain is in distribution, with the computer
reservation systems businesses of the three global distribution
system companies generating an average ROIC of 20%, followed
by freight forwarders with an ROIC of 15%.
However, high profits and inefficient costs in the value chain are
only part of the explanation for persistently poor airline
profitability. In fact over the past 40 years the airline industry has
more than halved the cost of air transport in real terms, owing to
better fuel efficiency, asset utilization and input productivity. Yet
these efficiency gains have ended up in lower air transport yields
rather than improved investor returns. That has created
tremendous value for customers and the wider economy, but has
left equity investors in the airline industry unrewarded. The study
shows this aspect of the airlines performance lies more in the
industrys highly fragmented and unconsolidated structure and
the nature of competition, rather than in the supply chain,
although distribution is a key part of the puzzle
Airline CFOs and heads of cargo reported in April that they expect
growth in passenger services over the next 12 months to be as
strong as in 2010 and early 2011. Cargo is also expected to see
its strongest growth since 2010. The upturn in economic activity
driving these expectations is fragile, as weakness in Europe and
Asia has shown. However, an easing in fiscal austerity policies,
continued expansionary monetary policy and progress in
deleveraging the private sector, are all coming together to boost
growth, particularly in economies like the US.
Consumers
Consumers will see a substantial increase in the value they derive
from air transport this year. New destinations are up 1.7% this
year already, and frequencies have risen by even more. We
expect 1% of world GDP to be spent on air transport in 2015,
totaling over $760 billion. Air travel is accelerating, with growth of
6.7% expected this year, the best since 2010, well above the
5.5% trend of the past 20 years. This is being driven mainly by
the upturn of the economic cycle. But price is also attracting
consumers. The average return fare (before surcharges and tax)
of $429 in 2015 is forecast to be more than 64% lower than 20
years earlier, after adjusting for inflation. Air freight had been in
the doldrums since 2010 but now a cyclical upturn is evident.
Government
Governments have also gained substantially from the good
performance of the airline industry. Airlines and their customers
are forecast to generate $116 billion in tax revenues this year.
Thats the equivalent of almost 48% of the industrys GVA (Gross
Value Added, which is the firm-level equivalent to GDP), paid to
governments in payroll, social security, corporate and product
taxes (Note that charges for services are excluded). In addition
the industry continues to create high value added jobs.
But in many countries the value of aviation for governments, and
the wider economy, is not well understood. The commercial
activities of the industry remain highly constrained by bilateral
and other regulations. Moreover, regulation is far from smart
with unnecessarily high costs in many situations. Passenger
rights/consumer
protection
laws
are
one
example
of
wellintentioned but badly designed regulation that can lead to
disproportionate, inconsistent and badly targeted costs. There are
now 59 regimes currently in force, based on information currently
available.
Capital providers
Debt providers to the airline industry are well rewarded for their
capital, usually invested with the security of a very mobile aircraft
asset to back it. On average during the business cycle the airline
industry has been able to generate enough revenue to pay its
suppliers bills and service its debt. But typically net post-tax profit
margins have been small, leaving little to pay equity investors.
Equity owners have not been rewarded adequately for risking
their capital in most years, except at a handful of airlines.
Investors should expect to earn at least the normal return
generated by assets of a similar risk profile, the weighted average
cost of capital (WACC). Such is the intensity of competition, and
the challenges to doing business, that average returns are rarely
as high as the industrys cost of capital. Equity investors have
typically seen their capital shrink. But this year we expect the
industry to generate a return on invested capital (ROIC) of 7.5%,
which does, for the first time, adequately reward equity owners.
On invested capital of almost $700 billion, the industry is forecast
to generate $4.9 billion of value for investors this year. But it
should be clear that $29.3 billion net profit, while exceptional for
the airline industry, is really only just sufficient to pay investors a
normal return for risking their capital. Moreover, high returns are
not widely spread in the industry outside N America. The trend
improvement in returns is being driven by changes in structure
and behavior. Breakeven load factors are usually on a painful
upward trend as yields fall faster than cost reductions. They are
falling this year because of lower fuel prices and the impact of
increasing ancillary revenues. On top of that, consolidation and
more rational behavior have boosted load factors achieved.
Worldwide airline industry 2013 2014 2015 ROIC, % invested
capital 4.9% 5.7% 7.5% ROIC-WACC, % invested capital -1.9%
-1.2% 0.7% Investor value, $ billion -13.0 -8.3 4.9 EBIT margin, %
revenue 3.5% 4.6% 6.9% Net post-tax profits, $billion 10.6 16.4
29.3 % revenues 1.5% 2.2% 4.0% $ per passenger 3.37 4.94 8.27
Note: ROIC = Return on Invested Capital, WACC = Weighted
Average Cost of Capital, EBIT = Earnings Before Interest and Tax.
Current year or forwardlooking industry financial assessments
airline industry next year will generate $16 billion of profit for the
upstream part of the jet fuel supply chain
We forecast that fuel efficiency, in terms of capacity use i.e. per
ATK, will improve by 1.5% in 2015. Higher load factors are
forecast to improve fuel use per RTK by 1.7% this year. Continued
fuel efficiency gains have partially decoupled CO2 emissions from
expanding air transport services. In the absence of the expected
fuel efficiency gain this year, fuel burn and CO2 emissions would
be 1.5% higher in 2015. That represents a saving of over 11
million tonnes of CO2, as well as saving on fuel that would have
cost the industry and its consumers an additional $3 billion. Fuel
is such a large cost that it focuses intense effort in the industry to
improve fuel efficiency, through replacing fleet with new aircraft,
better operations and efforts to try to persuade governments to
remove the airspace and airport inefficiencies that waste around
5% of fuel burn each year.
Regions
The strongest financial performance is being delivered by airlines
in North America. Net post-tax profits are the highest at $15.7
billion this year. That represents a net profit of $18.12 per
passenger, which is a marked improvement from just 3 years
earlier. Net margins forecast at 7.5% exceed the peak of the late
1990s. This improvement has been driven by consolidation,
helping to raise load factors (passenger + cargo) over 64%, and
ancillaries, which together with lower fuel costs push breakeven
load factors down to 56.4% this year. Breakeven load factors are
highest in Europe, caused by a combination of low yields due to
the highly competitive open aviation area, and high regulatory
costs. But the region has achieved the second highest load factors
and is generating solid growth. Net profits are forecast to rise to
$5.8 billion this year represent $6.30 per passenger and a margin
2013
2014
2015
752
769
763
1.8%
2.2%
-0.7%
% global GDP
0.9%
0.9%
1.0%
493
473
469
Compared to 1994
-59%
-61%
-64%
2.33
2.22
2.02
Compared to 1994
-60%
-62%
-66%
3143
3327
3542
5.1%
5.8%
6.5%
RPKs, billion
5839
6190
6603
5.7%
6.0%
6.7%
2.5%
2.6%
2.9%
Return fare
$/pax. (2015$)