Passenger-Driven Flight Schedules
Scheduling Parameters Set By Passenger Propensity To Travel
Passengers today have been demanding when and where to fly, and the wisest among airlines have been listening, compiling and analyzing data, and adjusting schedules accordingly.
Passengers are flying when they want. Are you?
Every day during the month of March, a United Airlines flight leaves George Bush Intercontinental Airport in Houston for Nassau, Bahamas. Daily scheduled flights involving a host of different origins and destinations, of course, are common the world over; however, Houston-Nassau presents a more complex scenario.
Trans-Atlantic Seats: Percent Of The Annual Monthly Average
Trans-Atlantic Capacity Increases During Peak Periods
Airlines have continually pushed more capacity across the Atlantic during the peak travel period (summer) while reducing off-peak periods (the rest of the year). They’ve done this in spite of greater competition, more capacity, increased fuel prices, newer aircraft and lower fares.
Monday through Friday, the flight is operated using a regional jet with 66 seats. Saturday and Sunday, the flight is operated using mainline aircraft (with twice the number of seats of a regional jet).
Furthermore, on Saturdays there are two mainline trips. From September through November, the flight doesn’t operate at all.
As one would quite logically suspect, leisure demand to the Bahamas is extremely seasonal. What is more unusual is the uniquely sculpted schedule that essentially follows the Houston-Nassau demand.
Seasonal Passenger Demand
Airlines have long analyzed and come to a certain sophisticated understanding of the seasonality of passenger demand. In response to that demand, carriers have canceled Saturday service in business markets, reduced fall flights to leisure destinations, and allowed aircraft to “follow the sun” from summers in the northern hemisphere to summers (the precise opposing seasonality) in the southern hemisphere.
What is unique today is the detailed fine-tuning that airlines have been able to execute to greater match passenger demand, seasonally as well as by day of the week. Gone are the previous tenets that seemingly used to be set in stone that an airline must fly a route daily year-round to attract the business passenger.
Today’s airlines are finding that following passenger demand is far more profitable than flying empty seats in hopes of attracting passenger demand, even in highly competitive markets.
One such competitive arena is the trans-Atlantic market of fiercely contested capacity and highly seasonal traffic patterns, with both private and state-backed carriers vying fiercely for customers. Strong business demand combines with seemingly endless leisure demand that peaks in the summer and evaporates in the winter.
Domestic U.S. Seats: Percent Of Daily Average
Increased Day-Of-Week Capacity Changes
Airlines have introduced more day-of-week changes in capacity since 2000, reducing Saturday capacity while increasing Mondays, Fridays and even Sundays slightly. Tuesdays and Wednesdays are often targeted for reductions, particularly during slower periods of the year.
Every year since 2000, airlines have become more adept at flying less capacity off-peak, either by flying smaller aircraft or outright seasonal cancelation of routes, while pushing more peak summer capacity.
In 2000, trans-Atlantic capacity in the trough (roughly February) bottomed out at 81 percent of the annual monthly average seat capacity. In 2010, that capacity had dropped to 75 percent, then to 67 percent in 2015. In the peak, which is July, capacity had jumped from 113 percent of the annual monthly average in 2000 to nearly 130 percent in 2015.
Where daily year-round trans-Atlantic flights used to be gospel, airlines are now adding peak-only flying to highly seasonal destinations such as the Mediterranean, Scotland and Ireland. Carriers as disparate as American Airlines and Air France are flying Charlotte-Paris and Paris-Minneapolis, respectively, in the summer only.
But not only are airlines aggressively managing capacity seasonally and monthly, they are increasingly fine-tuning weekly schedules.
Reducing capacity on low-demand days of the week, such as Saturday, is fairly standard practice across the schedules of most airlines. Leading carriers have taken it a step further by reducing other “soft” days such as Tuesday and Wednesday, while bulking up on Monday and Friday.
Some airlines have gone so far as to develop entirely unique bank structures on off-peak weekdays.
Carriers such as US Airways (now folded into the greater combined structure of American Airlines) have operated entirely new banks around major travel periods, such as a midnight bank at Phoenix around the Thanksgiving holiday.
For some airlines, holiday flying around holidays that are not necessarily universally recognized, such as Thanksgiving and Christmas, can mean that large quantities of otherwise-empty international capacity can be strategically redirected toward peak domestic traffic.
Cost Of Complexity
There is, of course, a cost to this complexity, but short bursts of incremental flying often come through simple greater use of aircraft and facilities that would otherwise be sitting idle. The incremental cost, then, is largely limited to crew and fuel costs.
Nonetheless, it should be duly noted that fine-tuning can quickly result in needless complication.
Recently, for example, one airline’s single daily flight turned into a mess of seven different flight numbers, operating at seven minutely but distinctly different departure times, all in the space of one week. Striking the right balance between following passenger demand and overcomplicating the schedule is critical.
Capturing the seemingly endless demand and high fares of a few select peak travel periods is manageable, and is actually a great place to start.
Allegiant 2015 Seats: Percent Of Daily Average
Extreme Seasonal And Day-Of-Week Service
Allegiant Airlines has taken seasonal and day-of-week flying to the extreme, and it has been incredibly profitable for a carrier with primarily fuel-hungry MD-80s, regardless of whether fuel was expensive or not. The majority of Allegiant’s capacity is on Mondays, Thursdays, Fridays and Sundays, with decreased operations on Wednesday and Saturday. Tuesdays practically grind to a halt.
Most airlines are somewhere on the spectrum between basic winter/summer schedules and optimization down to the specific day of the week. The potential optimization each carrier can achieve is dictated by the quality and detail of the airline’s data, and the planning/scheduling teams’ command of that data.
Moreover, most airlines have monthly data by route, which allows the network team to make adjustments based on historical performance and medium-term forecasts, in concert with pricing, revenue management and operations.
Optimizing further down to a day-of-the-week level may require an optimizer and/or a larger network/scheduling team to devote the man-hours to sculpting the schedule.
It can also be the result of an iterative process in which small changes are made to peak and off-peak days, changes that eventually evolve into distinct schedules that can be repeated or modified regularly. The former US Airways holiday midnight bank at Phoenix continues to serve as a good example of a schedule that grew over time, and was fundamentally copied by other carriers including Delta Air Lines and United Airlines.
Monitoring the changes and tracking their performance is an essential piece of the process.
Network teams can also forecast and review changes to the bank structure that may be practical for peak and off-peak days, and put them into regular schedule rotation.
A Schedule Emerges
The result is a schedule that follows passenger demand more closely.
Fewer empty seats are available when the traffic simply does not exist at any fare. Revenue management is better able to manage soft demand in off-peak periods while maximizing revenue in peak periods.
Maintenance and operations have greater opportunity to prepare the fleet in the midst of the more-frequent troughs, in anticipation of the rarer but lucrative peaks.
Southwest Airlines Seats At SNA: Percent Of Daily Average
Southwest In Compliance With SNA’s Strict Seat Requirements
Even the famously restrictive Orange County Airport (SNA) in Southern California affords some flexibility. One of the largest carriers at the airport, Southwest Airlines, has managed to reduce its Saturday flying while distributing the capacity among the other weekdays, thus staying within the strict minimum and maximum seat requirements at the airport.
Interestingly, one carrier that has taken this practice to the (incredibly profitable) extreme is Allegiant Airlines, which operates primarily on Monday, Thursday, Friday and Sunday, nearly shutting down on Tuesdays, and with reduced operations on Wednesdays and Saturdays.
While Allegiant’s traffic is virtually 100 percent leisure, its approach demonstrates the effectiveness of flying when the airline’s customers are willing to pay to travel.
More traditional airline models involve a more even mix of leisure and business travel, as well as generally larger fleets of newer, expensive aircraft that cannot simply be parked on off-peak days, like Allegiant essentially does with its fleet of relatively inexpensive, used MD-80s.
Such wild schedule swings as Allegiant’s are less practical for larger network carriers, although the premise and logic remain the same.
By reducing capacity on off-peak days during which there is little if any spill traffic and increasing capacity on peak days during which spill traffic is finding alternative routings or carriers, an airline is essentially following a low-risk path to effectively capturing more demand.
Slotted airports may reduce airlines’ schedule flexibility, but they do not in general eliminate it.
John Wayne Airport, famously restrictive in Southern California’s Orange County, still permits some flexibility, and carriers at the airport have reduced their Saturday seats and spread them throughout the rest of the week over the years, all while maintaining their mandated minimum/maximum seat requirements.
International slotted airports with curfews also permit flexibility to target capacity where it is most useful.
Qantas at Sydney, Australia, has been able to sculpt its departing seats by day of the week, minimizing Saturday capacity while at least slightly boosting Monday and Friday departing seats.
Qantas Seats At SYD: Percent Of Daily Average
Qantas Grows Capacity Share At SYD
Sydney, Australia, is another challenging airport in terms of curfew, competition and slots. In spite of the complexity of the airport, Qantas has grown the share of capacity on Mondays and Fridays while reducing Saturdays.
A Developing Trend
The opportunity is there, and the premise is simple: Fly less when passengers don’t want to fly, and fly more when they do (right down to the specific day of the week).
Devising a roadmap to a more dynamic schedule is more complex, as dictated by any individual airline’s data quality, operational-group competence and participation, and facility limitations.
Risk is minimal, as airlines’ weak periods in similar markets are probably very much like those of their competitors. But the payoff can be somewhat astounding, as passengers find more capacity when they want to fly, and airlines manage inventory better when they do not.