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Airline Route and Fleet Planning

Coursework Assignment

Outcome 2: Demonstrate an understanding of the global economics underlying fleet planning according to the market, constraints and the airline’s need. 

Outcome 3: Compute data in order to successfully carry out fleet planning analysis.

Outcome 4: Make appropriate recommendations of a fleet type for a particular market

SCENARIO

You are working in the Fleet Planning Department of an airline. Your airline is planning to launch a new route to a destination it is not currently serving.  You have been tasked with writing a business report to senior management that will

1. identify a suitable destination and the appropriate aircraft and capacity to serve it
2. identify and calculate key economic parameters to analyse the feasibility of the route
3. make a conclusion for a go or no-go decision and recommendation on whether or not to launch, based on your analysis in (1) and (2) above and
4. write a personal learning paper on your experience and learnings from this assignment and the overall module.

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1. Airline and route selection and aircraft allocation

• Choose an airline that you are familiar with and/or has a complete set of information easily available for research e.g. annual reports, fleet configuration etc. You can choose either a network/full service carrier or an LCC but your choice of route/destination/aircraft must be compatible with the airline’s stated strategy.
• Choose a destination that is not currently served by your airline but has potential.
• Choose an aircraft: this can be a type that your airline currently operates or will start operating within the near future or it can be an entirely new type if you have nothing suitable already in your fleet plan.
• NB. Check and ensure the aircraft you choose has the performance capability and configuration to serve the destination airport based on likely demand/frequency and payload requirements and the airfield/terminal configuration. If you choose an entirely new aircraft type take into account the challenges associated with the introduction of a new type of aircraft to your operation, such as training and transition, airport compatibility, configuration, maintenance overlap, spares etc.
• Estimate passenger and cargo demand over the sector by class both ways between your hub and the new destination. Note you are a network airline so each sector load will comprise demand from multiple origins and to multiple destinations provided you integrate the new flight into your existing schedule so that connections can be made over your hub airport.
• Establish a schedule for the new route (frequency, timing) taking into account time zones, feeder traffic in both direction, minimum connect times across the hub, airport curfews etc..
• Calculate the yield, sector revenue, load factor, RASK for the new flight taking into account prevailing fares and cargo rates.
• Draw up a typical weight build up chart for the new flight to check your assumptions.

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2. Key costs

• Identify, analyse and calculate the three main direct operating costs for the route i.e. fuel, crew cost (for both cockpit crew and cabin crew, based on regulatory and/or airline service standards) and aircraft cost (cost of purchase/lease, depreciation).
• Identify and analyse two other significant direct operating costs associated with the new flight e.g. ATC/Navigation charges; ground handling charges; maintenance costs; inflight services etc. N.B. You need to ensure the costs are consistent i.e on a per flight hour, per cycle, per week, per month or per year basis and that your analysis is consistent with your demand forecast analysis above.
• Add in any other cost factors you see as being pertinent to a full analysis of direct/indirect operating costs e.g. marketing costs etc.

3. Conclusion and recommendation

• Make a go or no-go decision to launch the route based on likely success factors.
• Justify your decision with reference to the metrics we have used in the course.
• Identify any other information or analysis you would want to undertake to reinforce your analysis and decision.

4. Personal learning paper

• Write about the key learnings that you have gained from undertaking this module. From these discuss what you consider to be the three most important aspects of the Airline Route and Fleet Planning process and explain why they are important.

Marking Scheme:

Maximum Marks Available

1. Airline and Route Selection, capacity requirements and aircraft allocation 40%
2. Key Costs 35%
3. Conclusion and recommendation 10%
4. Personal learning paper 5%
5. Report format (as shown on Moodle), breadth and depth of research, referencing (Harvard style), grammar, precision, similarity etc 10%

N.B. while there is no specific word count I would expect this report to run to at least 3500 words. You are encouraged to include appropriate data tables, images and diagrams to assist in your explanation.

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