easyJet has selected the advanced network simulation solution Amadeus SkySYM by Optym to optimize flight schedules and improve its on-time performance.
SkySYM is one of the five solutions offered as part of the Amadeus SKY Suite by Optym, created through the partnership between Amadeus and Optym formed in 2016 to deliver Optym’s network planning and scheduling suite.
Flight scheduling of airline route networks is not only complex but it is also of strategic importance. The timing of flights can work around stresses in the airspace to ensure timely departure and arrival. Identifying direct flight paths can improve fuel efficiency and cost-effectiveness.
Scheduling can also be framed as part of an airline’s merchandising strategy. Low-cost carriers in particular have looked at scheduling as a way to improve fare performance while reducing airport costs.
Research by the UBC Sauder School of Business
in Canada and published in the Journal of Urban Economics explores these dynamics in-depth and reveals the impact “departure time competition” has on consumers.
The authors of "When Hotelling meets Vickrey: Service timing and spatial asymmetry in the airline industry" assert that “hotelling’s principle of minimum differentiation applies in commercial aviation.”
In layperson's terms, they identify three key factors that affect how consumer choose an airline ticket: price, time of flight and location. They looked at how airlines can actively influence consumer behaviour by considering these three ideas in the context of scheduling.
Key findings include:
- Carriers based at smaller, less central airports are at a disadvantage location-wise, so they compete through ticket price and by offering flights at specific times.
- Airports charge different fees based on the time of departure. Rather than going head-to-head with the major airlines, which often schedule similar departure times to coincide with the largest consumer demand, low-cost carriers stagger their departure times and can offer lower prices at less popular times.
- This, combined with lower operational costs at more far-flung airports, helps smaller airlines compete and crucially, it keeps fares low for consumers.
Study co-author Laingo Randrianarisoa, a post-doctoral research fellow at the UBC Sauder School of Business said:
“Prior to this study, it wasn’t fully understood how airlines competed through departure time in multi-airport regions, even though multi-airport systems will play a major role in the future development of air traffic worldwide. Low-cost carriers can exploit their lower operating costs and use departure time variation to compete more strategically with full-service carriers at large airports, which will help counter their location disadvantage.”
To optimize their operations and gain competitive advantage, airline network planners have to consider a wide range of factors that can potentially impact schedules which makes the process laborious and sensitive. The principles explored in the UBC Sauder School of Business study also involve complex calculations. Flight schedule errors can result in real damage to the airline bottom line in the form of lost bookings, or flight-delay compensation as well as in the costs of inefficient operations.
Dr. Ravindra K. Ahuja, Optym’s president and CEO, is a mathematician by training who dedicated himself to finding the formulas that would make flight schedule planning more targeted, adaptable and flexible.
As Amadeus explains:
SkySYM can simulate airline schedules in the planning stage to improve schedule reliability and ensure smooth operations on the actual day of the flight. It works by simulating planned schedules under real-world conditions by modeling factors such as aircraft and passenger flows, maintenance activities, air traffic control events, weather patterns, and crew and baggage delays.
Renzo Vaccari, vice president of Airline Solutions for Optym said of easyJet’s decision to bring SkySYM onboard:
“Every airline wants to build optimal flight schedules that will both maximize profits and be more reliable. Our results show that the system predicts on-time performance (OTP) indicators with greater than 95% accuracy and improves OTP by up to 4%."
Manuel Midon, head of airlines for Northern & Western Europe at Amadeus added:
“It’s fantastic to deepen our relationship with easyJet through the Amadeus SkySYM by Optym solution. We will work closely together with the airline during the implementation of the solution, which can contribute to providing an even better customer experience and increasing incremental revenue at the same time."