This chapter presents a description of the profitability forecasting model (PFM) used by major airlines to evaluate schedule competitiveness and profitability. The objective of PFMs is to estimate the market share for each airline at the network, market, and flight levels. The chapter illustrates the overall framework of PFM presented. The model is composed of the input module, itinerary builder, itinerary valuation (scoring) and choice models, and the demand assignment module. PFM calculates several measures of performance including load factor for each flight, market share, and metrics related to service concentration. The load factor represents the percentage of revenue‐generating seats of each flight. The market share is calculated for every city‐pair. The market concentration metrics measure the level of competition between airlines in a given city‐pair. The Herfindahl‐Hirschman Index (HHI) is one of the common measures that is used for this purpose.
Profitability Forecasting Models
Airline Network Planning and Scheduling ; 139-147
2018-11-16
9 pages
Article/Chapter (Book)
Electronic Resource
English
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