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How Do Airlines Gauge Potential Demand  
User currently offlineCoopdogyo From United States of America, joined Jan 2010, 189 posts, RR: 0
Posted (4 years 7 months 3 weeks 1 day 6 hours ago) and read 2372 times:

I have always wondered how airlines gauge potential demand on a route? Do they have some sort of database? If so how is this collected? Basically how do they figure out how many pax there are a day on a route?

7 replies: All unread, jump to last
 
User currently offlineKaitak From Ireland, joined Aug 1999, 12436 posts, RR: 37
Reply 1, posted (4 years 7 months 3 weeks 1 day 6 hours ago) and read 2353 times:

There are various ways of doing this. Some would include:

1. Airport statistics.
2. Regulator statistics (Britain's CAA, for example, produces very interesting and complex statistics, broken down by route).
3. Comparing frequency and average LF. If you know, for example, that an airline flies two 777s a day on a route and its LF is 90%, you can fairly quickly work out its traffic.
4. Interline figures; if you have a large number of pax interlining on a certain route, then you can guage - to some extent - demand on that route.


User currently offlineCoopdogyo From United States of America, joined Jan 2010, 189 posts, RR: 0
Reply 2, posted (4 years 7 months 3 weeks 1 day 6 hours ago) and read 2326 times:



Quoting Kaitak (Reply 1):
1. Airport statistics.
2. Regulator statistics (Britain's CAA, for example, produces very interesting and complex statistics, broken down by route).
3. Comparing frequency and average LF. If you know, for example, that an airline flies two 777s a day on a route and its LF is 90%, you can fairly quickly work out its traffic.
4. Interline figures; if you have a large number of pax interlining on a certain route, then you can guage - to some extent - demand on that route.

How about on routes where no one else is flying. Also I can understand how a Regulator Statistics can be helpful. But how would they gather that data. Would they somehow pull all the tickets that start in place A and connect through somewhere and that end in place B?


User currently offlineAmmunition From United Kingdom, joined Feb 2002, 1065 posts, RR: 4
Reply 3, posted (4 years 7 months 3 weeks 1 day 4 hours ago) and read 2242 times:

Modelling can be used to estimate potential demand on an unserved route, the gravity model for example used population size and distance part to calculate the potential demand for transport, some adjustments must be made (constants e.t.c), but by looking at known cities and routes, you can get a good estimate for unserved cities.


Saint Augustine- 'The world is a book and those who do not travel, read only 1 page'
User currently offlineSimairlinenet From United States of America, joined Oct 2005, 914 posts, RR: 2
Reply 4, posted (4 years 7 months 3 weeks 23 hours ago) and read 2095 times:

Airlines buy access to proprietary data that includes information on O&D traffic flows. Aviation Daily for instance nearly every day has a "top markets served from XYZ" by passengers daily each way.

Learn more about one such example at http://www.aerlines.nl/issue_32/32_Witlox_et_al_MIDT.pdf


User currently offlineRFields5421 From United States of America, joined Jul 2007, 7607 posts, RR: 32
Reply 5, posted (4 years 7 months 3 weeks 22 hours ago) and read 2054 times:

The exact methods each airline uses are highly protected company secrets. Beyond a doubt there is a lot of modeling and database mining.

But even the best can make a mistake and start a route which does not work out.


User currently offlineNclmedic From United Kingdom, joined Oct 2009, 343 posts, RR: 0
Reply 6, posted (4 years 7 months 3 weeks 21 hours ago) and read 1946 times:

Most airlines employ analysts to do all this digging and data collection!

User currently offlineLuke From United Kingdom, joined Apr 2005, 181 posts, RR: 0
Reply 7, posted (4 years 7 months 3 weeks 20 hours ago) and read 1900 times:

As well as data modelling based on existing traffic flows (where applicable), airline network planners will also look for city pairs that have potential due to factors such as immigration flows, the tourist potential of a destination (for emerging tourist destinations, an airline will often work with local tourist boards to develop a joint marketing and promotional strategy) and also the businesses that are based in certain cities - especially where there is a large organisation with offices in various cities that generate business traffic flows between them.

These factors will often provide the initial clues for potential on a route and then be followed up with closer data analysis.


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