Airline Scheduling. A Business Plan For An Airline - Essay Example

? of Faculty of ………………………….. Airline scheduling of Program BACKGROUND The company that has appointed me as an advisor is convinced by my report and will take my suggestions on the market that the airline will operate in and the management structure that should be put in place. Furthermore, the company has been granted the right to fly between Australia, Singapore, Japan and China. With US$500 million capital, the proposed market and the management structure determined in the last report, I provide professional advice on the following three areas of: What fleet suits best for this new business and how aircraft should be acquired? How should the fleet be scheduled?  Based on questions 1& 2, advice how air freight service might bring revenue to the airline business? INTRODUCTION A business plan for our airline is intended to be made. The areas that are expected to be served by our company’s airline are Australia, Singapore, Japan and China. The company is highly specialized in its prospective business. It attempts to plan and arrange a fleet and then acquire aircrafts. Thereafter the schedule of the flights needs to be scheduled. Moreover it needs to be estimated that what is the amount of revenue that would most probably be generated and how would this revenue effect the airline business as a whole. The emerging courage from within the skies runs through the staff of the company as well. SELECTING A FLEET FOR THE AIRLINE The construction of a good quality of flight schedules is essential for the effective and optimal performance of an airline business. This optimal performance involves the achievement of customer satisfaction and the maximizing of profits. The robust the acquiring of fleet and aircrafts is, the better it shows how good and optimal would the prospective schedule of the airline would be. Selecting a fleet for the airline is the first process that needs to be evaluated. Modeling of a fleet is usually a highly complex process. This process involves a number of skills and knowledge of the business to a considerable extent. In the words of Paul Clark, “Fleet planning is a process by which an airline acquires and manages appropriate aircraft capacity in order to serve anticipated markets over a variety of defined periods of time with a view to maximizing corporate wealth.” (Clark, 2007) While constructing the making of a fleet it should be considered that buying airplanes is a large task and should not be done keeping only the current time period in mind. Rather, several upcoming time frames should be taken into consideration. One of the factors that effect fleet planning is fleet management tactics such as aircraft trading. Moreover the following factors should be taken into consideration: Total Cost of Ownership including Purchase Price Maintenance Costs Fuel Efficiency. The $500 Million that have been assigned need to be properly bifurcated in the above mentioned parts. ACQUIRING AN AIRCRAFT Acquiring an aircraft is the biggest step among all the steps that are involved in the acquiring of an aircraft. Aircrafts can be acquired anew or they can even be reused. There are number of commercial jet organizations that lend their jets on rental basis. Moreover, they even have jets that are reused and can be purchased. One thing that should specifically be taken into account while purchasing aircrafts is their need to last long. These are the basic investments in the airline business of the company. The better investment there is in this regard, the better it would be for the future prospects of the company. According to a leading edge CEO Gary Justice, the following mentioned methods of aircraft acquisition work best for all types of people who want to go for the purchase of an aircraft may they by needing it for personal or corporate use. He is quoted to have said: “The three phases of aircraft acquisition are strategic planning, tactical implementation (execution of the strategic plan) and operations (operational startup and transitional issues). Perhaps the most important phase is strategic planning, which begins by performing a “current-state assessment” and ends with a comprehensive plan that addresses all pertinent issues related to the acquisition of an aircraft.” (Business Week, 2005) The selection of an aircraft that needs to be acquired requires the keeping in mind of the following points: What is the requirement of travel and how frequent is it intended to be, the number of passengers that is expected to be on board in each of the expected flights, Moreover, a baseline needs to be established that would model the current state of the finances in order to evaluate sensitive key issues like market values, appraisal of all assets, lease documents, the forecasting capital budgets expected to incur with respect to the miles flown. An assessment criterion that would highlight the requirements should be evaluated. The needs and wants for an aircraft need to be separated out. for this purpose the involvement of management, senior ownership, flight department management, legal and financial planning teams, teams involved in risk management and analysis, human resource and security of the processing. THE MECHANICAL STATUS OF AIRCRAFTS should very critically be assessed instead of going on the outlook of the transporters. The elements required for the performance of an aircraft during flight should be put up as the key considerations. WHILE GOING FOR REUSED AIRCRAFTS a government approved aircraft evaluating company should be hired that would perform an inspection of the aircraft prior to its purchase. SCHEDULING OF AIRCRAFTS The schedule of a flight directly affects its commercial profitability. The task of designing or creating a commercially viable schedule is of great importance to the airline business. There are multiple constraints that are to be taken into account for an effective flight schedule. The main objective of the whole task is to earn or optimize profits. This optimization can be achieved through minimization of cost or maximization of profit or both. The process of schedule planning for the airline business generally depends on the capability and capacity of the selected fleet. Optimal flight scheduling is a complex and critical decision making process. The high interdependency of flight schedules makes it more difficult by allowing sequential interdependent scheduling mostly. Generally this process starts 365 days prior the execution of schedule and lasts for almost about nine months. The determination of city pairs (origin – destination) is the very first step of the process. This is achieved under the obvious constraints of legally allowed destinations, the demand and the environmental constraints. The factors that affect the existing flight schedules mostly comprise of the above mentioned three constraints. Sometimes the expansion in allowed destinations affects the existing schedule whereas the ever changing market demands and natural or man created environmental constraints also play havoc. The route designing of flights comes next to the determination of city pairs. There are multiple algorithms that can primarily be used to accomplish this task. The problems in this phase arise due to high interdependency of operations and fleet capability/capacity constraints. The flight delays due to any reason and the processing capacity of an airport may sabotage an optimal route plan. THE AIRLINE BUSINESS MAY BE BENEFITTED BY THE AIRFREIGHT in the context that the eventual running of the planes would over a period of time overcome their initial implementation costs. this would eventually be an edge over the running costs of the planes and would thus prove to be a source of revenue and profit generation thus resulting in the prosperity of the company. Clark, P 2007, Buying the Big Jets- Fleet planning for airlines. Ashgate Publishing Limited. Manoj Lohatepanont and Cynthia Barnhart February 2004, ‘Airline Schedule Planning: Integrated Models and Algorithms for Schedule Design and Fleet Assignment’ Journal of Transportation Science Vol. 38, No. 1, pp. 19-32, viewed 2nd October 2011, retrieved from JSTOR Journals Online.  Katers, N 2011, How to start an online company. Viewed October 2 2011. < http://www.ehow.com/how_5017720_start-airline-company.html> L&L International Limited. 2011. Business Jet ownership. There has never been a better time. Viewed: October 2 2011. < http://www.l-lint.com/articles/business-jet-ownership-theres-never-been-a-better/> Lohatepanont, M & Barnhart, C 2004 Airline Schedule Planning: integrated models and algorithms for schedule design and fleet assignment, Transportation Science, High beam Business, Viewed 02 October 2011, Retrieved from < http://business.highbeam.com/423348/article-1G1-114253033/airline-schedule-planning-integrated-models-and-algorithms> Kimball R & Ross M 2002, The Data Warehouse Toolkit: The Complete Guide to Dimensional Modeling, John Wiley & Sons, viewed 02 October, 2011, Retrieved from < http://proquestcombo.safaribooksonline.com.ezproxy.umuc.edu/book/databases/data-warehouses/9780471200246> Read More