CAPACITY PLANNING OF DOMESTIC AIRLINE PASSENGER SERVICES

Abstract

Air transport, primarily caters passenger- traffic, but Its share of the total passenger traffic when compared to other modes in the country is very less. Since it has distinct advantage over surface transport due to its superiority in speed and substantial saving in time on long distances, It handles significant volume of traffic on long haul sectors connecting metropolitan cities. Though there are domestic air services by a three level system, comprised of Air India, Indian Airlines and Vayudoot, most of the traffics carried by Indian Airlines and Vayudoot only. Air India caters for domestic passengers by filling the gaps of international passengers. Indian Airlines has a route network covering 71 stations, 9 of which are international connecting neighbouring countries (Nepal, Afghanistan, Pakistan, Maldives, Bangladesh and Srilanka). In addition to this, Vayudoot serves 87 Stations, 47 of which are common with Indian Airlines. Thus, domestic air serices operate through 102 airports in the country providing air travel facility for about 275 city pairs. After standardisation and modernisation Indian Airlines has changed substantially in terms of adding high capacity jet aircrafts. This has caused reduction in fleet size, while the capacity generated and traffic carried have increased manifold. Over the years the air transport network has grown significantly and virtually all large cities in the country are now interconnected by air services. However, small cities and remote areas also need air services and significant growth is possible in the feeder services network. Air travel demand has been growing continuously at a rate of 10-15 per cent each year and as a result of this Indian Airlines after nationalisation in 1053 registered a spectacular growth over the last three and half decades. The primary object of Vayudoot when formed In 1981 w;vs to connect inaccessible areas in North-Eastern region. Later, however, it was felt that Vayudoot could play a major role in the development of tourism, industrialisation and in enhancement of socio-economic environment in general. To cater passenger demand Indian Airlines has in their fleet AB 300, Boeing 737, HS 748 and F 27 with carrying capacities of 272, 126, 48 and 44 passengers, respectively. Vayudoot with the objective of providing feeder services has Dornier 228, HS 748 and F 27 aircrafts with carrying capacities of 19, 48 and 44, respectively. At present both Indian Airlines and Vayudoot are operating flights from the main cities - Delhi (Northern region), Bombay (Western region), Calcutta (Eastern region) and Madras (Southern region). The existing network for domestic air travel needs systematic analysis of demand and supply. With the influence of increasing population and other related economic growth of the country the air travel is going to be used more frequently creating higher demands. Since all operational and infrastructure building decisions involve large capitals, significantly more than other modes, scientific assessment Is absolutely necessary. In this context, characterisation of the network in relation to demand and systematic planning for fleet In view of available technology Is expected to derive more benefits. While scientific planning will guide in terms of fleet composition, their deployment in the network for alternative operational strategies, it will satisfy (ii) the social and economic objectives of national and regional integration. Though Indian Airlines has long experience of domestic operation, It appears that policies are not pursued after adequate testing with the help of scientific tools. The travel and operational characteristics of Indian Airlines and Vayudoot were analysed. Indian Airlines and Vayudoot serve a key role in certain sectors where it covers some routes in which air distance is substantially lower than surface distance. Number of city pairsd served by Indian Airlines and the number of passengers travelled on different distance ranges were examined with their trend over the years. It was evident from the analysis that though the network expansion is taking place over the years, the percentage of passengers travelled on different distance ranges remained unchanged. The number of city pairs served by Indian Airlines for a shorter distance (<300 Kms. ) are more, but the percentage of passengers travelled on these links are very low. In the base year (1987-88) only 25 out of 206 city pair links had traffic more than one lakh (0.1 million) passengers and these constituted almost 60 per cent of the total traffic in the network. The tertiary services of Vayudoot acts as a feeder system with most links less than 500 Kms. Technology innovation Is of paramount Importance in air transportation. Changing technology has led to improvements in passenger comfort and in other aspects of airlines product, such as punctuality. However, its most important effect had been on the operating costs. The change over from piston to turbo-prop and jet propulsions has led to a reduction in fuel consumption. (Hi) The fuel price assumes a greater significance In aviation industry. Modern technology of turbine powered aircrafts are having lower unit maintenance costs. The evaluation of operating costs for Indian Airlines In the past decade was characterised by fluctuating trend. The sharp rises in operating costs at various stages can be attributed mostly to increased fuel prices. It was also seen that though the number of wide bodied aircrafts increased after 1977 the operating cost of the airlines has not come down. This is not the case with most other airlines in rest of the world. An operating cost model was estimated for identifying casual relationship and to make necessary forecast. The operating costs of Indian Airlines and Vayudoot can be broadly classified in three ways, viz. (i) direct operating cost, (ii) Indirect operating cost, and (lii) non-operating cost. These costs were calculated for each stage length in rupees per available seat kilometers. The unit operating costs are high at lower stage lengths and vice versa. Indirect operating cost per passenger was considered constant in short haul operations since passenger services costs are relatively small and can be considered independent of stage length. The non-operating costs were considered per block hour. The components of direct operating costs are such that total direct operating cost appears to be linearly related to stage length. A separate linear relationship was developed for each aircraft type. It is interesting to note that the larger aircrafts like AB-300 and B-737 were found to have lower average costs than F-27 and HS-748. In the process of capacity planning assessment of demand and its accurate forecast seems to be of prime significance. The (iv) complex network and nature of travel demand at various regions of the domestic network in India proves its legitimacy. The trends of passenger traffic over the past three decades were analysed and forecasts were made. Many developing countries in the world do not have the advanced data management systems required to keep the track of development of aviation and related socio-economic activities. On the same account domestic air travel In India also need to be modelled with care. The growth of traffic is normally influenced by the cost of travel and socio-economic activities of the population forming the travel market. In addition, variables such as level of business/Industrial activity, foreign tourists arrivals, population and fleet size (available capacity) are also relevant. A model was developed to estimate the demand in terms of Revenue Passenger Kilometers for the total network. It was difficult to make a reasonable model for Vayudoot as data available were insufficient. While it is useful .to model the traffic demand in the network, for opratlonal use the distributed demand or traffic demand between city pair nodes is important. The general structure of most city pair models are of gravity type. The demand model for traffic between the city pairs for Indian Airlines was developed in the multi-term gravity or abstract model form. As population of the city will be misleading as the airport serves a much larger area of influence, and it is the urban population which usually generate air travel demand, the population variable accounted there appropriately. Moreover, simple population size probably will be erroneous as tourist places and other special locations may not get deserving emphasis. Thus, a composite index of population and developmental aspects (v) was devised which served as a combined landuse variable. Service variables were devised in ratio form in comparison to best available alternative mode. As traffic in the links of all distance ranges were not related to bhe variables suggested above with equal significance, the predictability of the network level model was not very good. Three separate models for links of classified distance ranges were calibrated which proved to be better through their degree of fit. Though there were choices of routes only in case of 17 city pairs there were only between or direct or a hopping flight. There were no attrlbutal difference in the services for making choice except that people were compelled to travel by hopping flight when the other was full. Route choice occurs when the air network is not highly connected and direct links may not be available between all city pairs. A choice may be made if one route offers a higher frequency and other shorter travel time. A binary choice model was estimated using the patronage of direct and hopping routes, considering service frequency and travel time for the choice function. In the network considered a realistic choice did not occur due to the operating characteristics and the model did not prove to be very accurate. Planning capacity must be utilised most effectively for profit or minimum loss depending on the criteria. Load factor is a measure of utilisation of service. At break-even the total cost of operations must be equal to total revenue, A functional relationship between break-even load factor and stage length was determined by introducing a fare function relating to stage length. Break-even load factors calculated for each of the (vi) aircraft type In use by Indian Airlines and Vayudoot can be accepted only for stage lengths more than 500 kilometers. At shorter stage lengths the break-even load factors are unusually high suggesting uneconomical operation. Like any other industry an airline can also be evaluated for its productivity. The productivity, therefore, will be defined as total output per unit cost measured in available seat kilometers per rupee of total operating cost. With the infinite demand productivity was examined and under varying demand conditions fleet utilisation was derived. The economy of operations for a particular type of aircraft was found very much dependent on the network characteristics, particulary on the distance range of operations. On the other hand, the frequency controlled by demand has also important bearing on the degree of utilisation. The- passenger demand and the aircraft operational characteristics (including size or seating capacity) together determines the development (frequency) under specific desired load factor. For a given demand and type of aircraft in the fleet frequency can be determined by setting the load factor according to the following two rules. Firstly, the load factor can be maximised regardless of the break-even load factor. The second rule is to maximise service frequency subject to the requirement that load factor does not fall below break-even limits. The first rule represents a strategy of maximising productivity, while the second rule follows from a strategy of maximising level of service by reducing schedule delay. The relation between aircraft technology and the structure of air service network in short haul systems was investigated. The (vii) analysis was based on an optimal frequency assignment model integrated with passenger allocation along the alternative routes. The model allows the optimisation of aircraft utilisation and demand pattern and aircraft technology. To demonstrate the utility of possible intermediate size aircrafts, two sizes were assumed as 100 and 200 seat capacity. These are selected to cover non-available sizes in the present fleet. To examine the suitability of each such aircrafts in terms of profitability in the network operation, the operating cost data will be required. As these assumed sizes are considered to be the modern aircrafts, their operating costs and characteristics are assumed to be similar -to those of AB-300 and B-737. With the assumed data of two new aircrafts, link profitability in the network and corresponding coverage provided for the base year travel demand were explored. The entire planning for air travel network and services was based on anticipated growth of air traffic as well as type of aircraft proposed to be inducted by airline operators. The major consideration in respect of future planning will be the air travel demand and supply orientation of the industry for adoption of aircraft technology. The existing fleet and Infrastructure available will not be sufficient to handle the future demand. Based on the optimal capacity planning for the network with respect to estimated demand, an investment strategy in terms of introduction of efficient aircrafts and facilities at airports for landing and handling of the traffic were suggested. Indian Airlines, in absence of competetion, pursued monopolistic Governmental policies without much concern for (viii) productivity. The economic destiny of the airline Industry i depends not only on the action taken by the industry itself but also on national economic policy. As a nationalised Industry the domestic air services In India has been promising in last three and half decades. Although there is sign of maturity In the network, the passenger and services will grow significantly in future years. Even there is thinking in the direction of partial privatisation. Alongwith these a requisite scientific estimation of capacity required in terms of fleet and other terminal facilities cannot be overlooked. This research study which is the first of its visual in this country outside the airline industry could provide a critical assessment of the policy that is being pursued. It clearly bornes out that the network structure suggests that fuel efficient small aircraft will be required. In absence of such aircrafts, summing the presently used types B-737 could serve the network most satisfactorily. Though a large proportion- of the modern aircrafts fleet of Indian Airlines Is reasonably aged, assuming their availability in 2001 A. D. the investments required in the industry to cope with the demand has been found to be 6260 million rupees. Ox)