Incorporating Network Flow Effects into the Airline Fleet Assignment Process

This paper presents a new methodology for incorporating origin and destination (O&D) network effects into the fleet assignment process. The methodology uses a decomposition strategy to combine a modified version of a leg-based fleet assignment model (Leg-FAM) with the network flow aspects of probabilistic O&D yield management. By decomposing the problem, the nonlinear aspects of the O&D market effects and passenger flow are isolated in O&D yield management and incorporated in FAM using linear approximations to the total network revenue function. To illustrate this methodology and its economic benefits, an example consisting of 10 cities, 48 flight legs, and 534 O&D market classes is presented and compared to the results found using two commonly used Leg-FAM formulations. To benchmark the benefits of using an O&D approach to fleet assignment, we present two case studies comparing the Leg-FAM and O&D FAM approaches using actual airline schedules with more than 4,000 daily operations. For these benchmarks, we present the results of a general fleet assignment process in which all the scheduled flights must be assigned an aircraft type and a schedule reduction run in which nonprofitable flights can be cancelled. The methodology presented in this paper is ideally suited for demand-driven dispatch (D 3 ) scenarios, where near-term fleeting changes are made to better match O&D passenger demand to available aircraft capacity. To illustrate the use of the O&D FAM methodology to facilitate near-term refleeting process, we present results from implementing a D 3 process using O&D FAM at AMR's American Eagle Airlines.