Project Title:

Managing Air
Transport Demand And
Capacity, From Both
Strategic And
Technical Perspectives
Group Members:

Hamza Javed (Bamm-f18-141)

Asad Mehmood (Bamm-f18-225)

Tayyab Anwar (Bamm-f18-005)

Zaid Ahmad (Bamm-S19-070)

Ashfaq Sana (Bamm-S19-099)

 Research Trends and Opportunities in the area of
managing air transportation demand and capacity:
Capacity constraints 

resulting congestion  Currently impose large costs on

airlines and their passengers.
 low schedule reliability 

Significant capacity increases that would solve these problems are not expected in the near- or medium term.
 Outlines

Number of directions Strategic initiatives Tactical measures Economic Impact of Efficient recovery from
for effective Covid-19 irregular operations
improvement 
 Research Trends and Opportunities in the area of managing air
transportation demand and capacity:

• A reliable, efficient air transportation system provides substantial benefits to society by connecting distant
communities in broader national and international economies.

• The fundamental problem that underlies the often poor reliability and substantial attendant costs of contemporary air
transportation systems is the existing relationship between capacity and demand at the busiest commercial
airports around the world and, to a lesser extent, in some parts of the en route airspace. At the most congested airports
(e.g., New York’s JFK and LaGuardia, Newark, London’s Heathrow and Gatwick, Frankfurt, and Hong Kong),
scheduled demand, even in good weather, is close to and, during some hours of the day, may exceed airport runway
capacity.

• At many other airports, this tight relationship between capacity and demand prevails on days when weather conditions
are less than optimal. As is well known from queuing theory, delays at a service facility can be quite lengthy not only
when demand exceeds capacity, but also when demand is less than, but close to, capacity for a significant period.
Air traffic congession:

Direct cost to
United states in Cost to passengers
airline
2007 ($31.2billion) ($16.7 billion)
($8.3billion)

Cost of lost Other indirect cost

demand ($2.2 to the economy ($4
billion) billion)
Nearly half due to late flight
arrivals

Delays
One third to flight Experienced
cancellation
by Passengers
due to:
One-sixth to missed
connections on multiple leg
flight intinenaries
 Obvious solutions:

These costs indicate that unless the demand-to-capacity relationship in the air transportation system
is managed carefully, air traffic demand that exceeds by any meaningful amount the levels reached in
2007 (the worst year of traffic delays in aviation history) will occasion further deterioration in the level of
service (LOS) in air travel.

Solutions:
Construction of new runways at existing airports or of entirely new airports near major air transportation
hubs . is rendered highly unlikely for strongly interrelated reasons associated with cost, environmental
impact, land availability, lengthy approval processes, and political feasibility
Strategic Planning:

Increasing
Transportation Efficiently
Increasing operations at
System distributing
capacity per slot under-scheduled
coordination demand
airports
Strategic Planning

1. Analyzing and modeling the trade-offs and implications of over- and underscheduling at the world’s busiest airports.

2. Developing creative mechanisms for allocating capacity to the airlines that

value it most and will best use it to transport passengers.

3. Integrated modeling of airline planning activities including demand forecasting,

pricing, and flight schedule optimization.

4. Understanding the economic value of airport capacity and modeling airline

responses to capacity adjustments

Tactical Adjustment:

1. Incorporating additional considerations (e.g., passengers, robustness, etc.) and

airline priorities into ATFM allocation decisions.

2. Integrated modeling of airline operations recovery that incorporates real-time

information regarding passengers, crew, and flight considerations.

3. Enabling a dynamic exchange of recovery capacity across airlines, airports, and

time periods.
 The COVID-19 impact on world scheduled
passenger traffic for year 2020 (estimated
actual results), compared to 2019 levels:

Economic • – Overall reduction of 50% of seats offered by airlines 

• – Overall reduction of 2,699 million passengers (-60%)
• – Approx. USD 371 billion loss of gross passenger
operating revenues of airlines

Impact of
Covid-19 on 2021

Civil Aviation 2020

Global and
State level:
The COVID-19 impact on world scheduled
passenger traffic for year 2021 (preliminary 
estimates), compared to 2019 levels:
• – Overall reduction of 40% of seats offered by airlines 
• – Overall reduction of 2,206 to 2,237 million passengers
(-49% to -50%) 
• – Approx. USD 323 to 327 billion loss of gross
passenger operating revenues of airlines
 International passenger traffic (2020, vs. 2019)

– Overall reduction of 66% of seats offered by airlines 

– Overall reduction of 1,376 million passengers (-74%)

Impact of – Approx. USD 250 billion loss of gross operating revenues of

airlines

Covid-19... International passenger traffic (2021, vs. 2019)

– Overall reduction of 62% of seats offered by airlines 

– Overall reduction of 1,338 to 1,350 million passengers (-72%

to -73%)
– Approx. USD 250 to 252 billion loss of gross operating
revenues of airlines
 2020

Domestic passenger traffic (2020,

vs. 2019)
• – Overall reduction of 38% of seats offered by 
• airlines 
• – Overall reduction of 1,323 million 
• passengers (-50%) 
• – Approx. USD 120 billion loss of gross 
• operating revenues of airlines

Impact of
Covid-19...
Domestic passenger traffic (2021, vs.
2019)
• – Overall reduction of 24% of seats offered by 
• airlines 
• – Overall reduction of 868 to 887 million 
• passengers (-33% to -34%) 
• – Approx. USD 73 to 74 billion loss of gross 
• operating revenues of airlines

2021
 Air passenger traffic:  An overall
reduction of air passengers (both
international and
domestic) ranging from 60% in
2020 compared to 2019 (by
ICAO)
• Airports:  An estimated loss of
approximately 64.6% of
passenger traffic and 66.3% or
over  USD 125 billion airport
revenues in 2020 compared to
business as usual (by ACI)

Global impact • Airlines: A 65.9% decline of

revenue passenger kilometres
(RPKs, both international and 
• Tourism:  A decline in
international tourism receipts of
USD 1.3 trillion in 2020,

of covid-19 domestic) in 2020 compared to

2019 (by IATA) 
compared to the  USD 1.5 trillion
generated in 2019 (by UNWTO)

• Global economy:  An estimated

• Trade:  A fall of global
-3.2% to -3.5% contraction in
merchandise trade volume by
world GDP in 2020, far worse 
5.3% in 2020 compared to 2019
than during the 2008–09 financial
(by WTO)
crisis (by IMF and World Bank)
Efficient recovery from "Irregular" Operations":
Irregular Operations:

• Irregular operations, or IROPs, are flights canceled for non-weather related reasons.

Causes of IROPs:

Carrier factors

1.  Mechanical

2. Crew

 Weather factors

ATC and security factors 

Upstream factors
 1. Isolated events (i.e. 15-30
There are two kinds of minutes late) to a specific
schedule deviation from an flight where few passenger
airline operations misconnects occur, but
perspective. follow-on flight segments are
not impacted.
IRROPs
Scheduled
2. Systemic events
(cancellations, long delays,
diversions) where multiple
Deviation:
aircraft and their follow-on
flight segments are impacted.
 Your planned
flight operation
Reschedule Delay Cancel is impacted by
Defined
Delay: Reschedule
Indefinite/Rolling
Delay: Delay without
Cancel the flight, re-
protect passengers
factors that
with a new departure
time; 
posting a new
departure time, to
determine if
and reallocate/re-
position the aircraft
and crew. 
make an on-time
conditions improve;
departure
unlikely
or impossible.
What are your
options? 
How does an airline balance the decision to
cancel a flight versus delay it?
•  There are two types of decisions:

1. The easy ones

2.  The hard ones.

Easy cancellation decisions:

 Absolute safety factors (e.g. maintenance, ice pellets)

Absolute resource factors (crew sick & no reserves, etc.)

 Critical vendor issues (fueling not available, etc.)

Curfew, slot and noise restrictions

Security-related issues with no resolution time given

 Delays likely to impact the current flight and one or more follow-on operations using the assigne.d resources
Easy delay decision:

Easy Delay Decisions: 

• Minor catering or vendor delays
• Late arriving crew
• Ramp congestion and/or minor ATC holds
• Security checkpoint or CBP delays
• Known short-term weather events (minor thunderstorms)
• Maintenance issues where deferral acceptable 

The delay decision has minor or no impact on follow-on flight operations

using the resources allocated to the flight
 What makes the decision
difficult?
Hard Delay
• When the probability is
vs. significant that delay decisions
Cancellation will materially impact follow-on
flights, either due to revenue loss
Decisions (missed connections) or
operational factors (resources
out of position)
Decisions at Base or Outstation

Cancelling a flight at a base is not the same decision process as cancelling at a spoke city

Alternate uses for the aircraft and crew

If crews away from base, need hotels and rest time

Passengers in transit need accommodation

Passengers at either origin or destination may require accommodation if cause is controllable

Summary: Delay vs. Cancel

So as an operator you
have two fundamental
choices:

1. Continue the flight 2. Cancel the flight

operation and risk operation, take the pain
significant impact to now, notify & reroute
follow-on flight passengers, and focus on
operations, clean re-start