EVALUATION OF AIR NETWORK FOR SHORT HAUL TRAVEL: \ud A CASE STUDY BASED ON A HEURISTIC APPROACH

This paper deals with the estimation of total air transportation cost consisting of airline operating cost and passenger travel cost, in an attempt to evaluate airline network under proposed flight frequencies for short haul travel. Considering the changed regulatory regime and the importance attached to short haul/ regional travel in developing countries, the airlines must also pay attention to passenger’s level of service while protecting its economic interests in determining flight frequencies. This is particularly important because of the competition among airlines and also due to the vulnerability of short haul air travel to alternative/convenient surface transport modes. In this paper an attempt has been made to review the relationship between the flight frequency, average load factor and average time difference between flights. The reliability evaluation model proposed by Hsu and Wen (2002) for airline network design has been taken as the basis for the study. The same has been reviewed and implemented in the evaluation of short haul air network. The air network in India linking eight cities is taken as a case study. A useful figure of merit (viz. cost per seat-km) was arrived by comparing with respect to total air transportation cost obtained from the analysis with that of DOC (using the method proposed by Association of European Airlines in 1989) alone. The results reiterate the fact that the load factor would play a critical role in yield management. A sensitivity analysis for various monetary levels of time value has also been carried out. In view of the sensitivity of costs and demand fluctuation, an argument has been generated for the use of heuristic approach to evaluate a short haul air network. Due to a high variability in the monetary value of time associated with line haul travel cost and schedule delay cost, there is a wide disparity in the ratio of airline operating cost (AOC) and passenger traveling cost (PTC). The authors believe that this study will help to establish a typical ratio of AOC to PTC and to what extent a compromise can be made between the airlines economic criteria and the passenger’s level of service criteria, for serving short-haul markets in developing countries