Airliners’ Network Expansion
Airline network is a very common network for people all over the world. If you have to travel from one place to another by plane, you should go through the edges, which are flights, to go to your destination. The passage talks about US airliners’ network development, especially the reasons why they are trying to develop the international market. The passage succeeded in making the point that American airliners are fallen behind on expanding international flight networks, but I think it is also important to explain why these airline routes should be added and how the airliners decide that the new routes they choose will bring them a maximized benefit. Those reasons that lay under are closely connected with what we learned in class.
Firstly, we have to answer why more international routes are needed. Let’s use the simplest model: all flights considered are from A to B, and each of them takes the same time, can carry the same amount of passengers, and are sold at the same price. So the graph may look very simple. Let us suppose that X airliner used to fly one of the 5 daily flights from A to B. If X add a second daily flight from A to B, it will share one third of the total capacity.
Suppose that the same number of passengers would travel from A to B, X will carry an additional 13% of the total passengers. A Chinese airline official once told me that a flight would approximately make a profit when the seat occupancy rate is higher than 60%. So, if the previous seat occupancy rate is higher than 92% (which is pretty low in popular routes), the airliner would get more money than before. If the previous seat occupancy is higher than 72%, there would not be a lost. Actually, the airliners would also benefit from receiving subsidies, shipping cargo, and so on.
Secondly, how the origin is selected. We have to bring the case into a more actual one, where passengers start their journey from a lot of places and may have to transfer to get to their destination. In order to minimize transfers, a model would best suits when there is one ‘ego’ airport in this area, often known as hub, that can fly to almost every airport nearby, and host most of the international (especially transcontinental) flights.
The figure uses Delta Airline’s Detroit Hub as an example. It gathers people from mostly the northeastern part of the country and fly abroad. For most of the time, a large airliner would have more than one hub, each have flights to small airports in that region and large airports over the country. Besides Detroit, Delta also use New York, Atlanta, Seattle and so on as its major hubs. If it opens a new route that starts from one of its hubs, most airports can go to that destination within 2 transfers.
Thirdly, how the destination is selected. This includes not only the seat occupancy, but also extra fees at that airport. This extra fee includes time slot, maintenance, fuel, etc. It may also be waived or cut down if the destination is a partner’s hub. We can simulate the situation. Suppose a airliner would add three routes, one each from A, B, C, that may go to X, Y, Z. the estimated seat occupancy is T. Airport X needs a time slot fee i, Airport Z is a partners hub and they can save j out of it.
If we have all the statistics in the graph, we can figure out how the routes should be added between city pairs. The airliners can find a perfect matching to broaden its airline network, and make the largest profit at the same time.