How airlines are powering up their network planning for new demand

May 18, 2021

Last updated: May 18, 2021

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Renzo Vaccari

Senior Vice President, Sky suite, Amadeus

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Each day, I see news stories about air travel starting to pick up in the U.S. We are seeing some major US carriers introduce new routes and ramp up fleets as demand for domestic travel increases. The vaccine rollout and decline of coronavirus cases in many areas are contributing to increased traveler confidence, which is a positive sign for the U.S. airline industry.

Each day, I see news stories about air travel starting to pick up in the U.S. We are seeing some major US carriers introducenew routes and ramp up fleets as demand for domestic travel increases. The vaccine rollout and decline of coronavirus cases in many areas are contributing to increased traveler confidence, which is a positive sign for the U.S. airline industry.

As airlines ramp up to meet this demand, they still need to deal with operating in an uncertain market where demand may still fluctuate dramatically from place-to-place depending on the state of COVID cases. Additionally, some airlines are responding to workplace trends.

For example, given the number of companies that havemoved their headquarters to the Austin, TX, area , airlines like Southwest have created more non-stop routes to accommodate what will be an increase in traveler needs. In addition, Southwest has expanded routes in Nashville, Florida’s Gulf Coast and throughout California and Hawaii.However, navigating when and where to fly determines the profitability and success of any airline. Yet network planning and scheduling, regardless of the airline’s size or type, is a very complex task. Airlines with the right technology and tools can make decisions and make changes in order to increase profitability and operational success and work toward rebuilding the industry.

Scheduling in the age of COVID-19

Pre-COVID, airlines would use a previous schedule to prepare for the next period. But now given the volume of changes and uncertainty, it can become an even more time-consuming process, which can lead to inaccurate planning and scheduling. Due to the complexity involved in developing flight schedules, however, airline planners often must focus on individual flights, which can create missed optimization opportunities across the entire network.

Amadeus customer Southwest Airlines is leveraging Amadeus Sky suite, a suite of software tools, to adjust to the new demand and redeploy its fleets in the most profitable way. Even though the airline was already using the advanced capabilities and technology before COVID-19, Sky suite modules Amadeus SkyCAST and Amadeus SkyMAX have helped Southwest simulate passenger choice behavior, impacted by COVID-19, to calculate passenger traffic and revenue. With this technology, airlines can test and evaluate changes before implementing them.

Given today’s volatile nature, airlines need to reset how they optimize their operations and manage revenue. This includes pairing the right fleet capacity and best times to fly with current demand. In the case of Southwest, Amadeus SkyMAX gave the airline complete flexibility to develop the most optimal schedule without being limited to historical data such as timing, routing, market frequency and capacity allocation. With SkyCAST, the airline can evaluate the route and network changes and ensure the changes are positive with respect to return of investments. Thanks to artificial intelligence, the solution balances network profitability and operational constraints to find the best times and allocate the right aircraft to each flight in the schedule, unlocking more revenue opportunities.

Amadeus customer Latam Airlinesuses Amadeus SkySYM and also has the potential to reap profits. The Sky suite module serves as a “digital twin” of an airline’s operations to simulate schedule reliability. It allows the airline to evaluate and maximize operational performance at the planning stage, before releasing schedules to the operating groups. The result is a schedule that is both profitable and reliable. Airlines that prepare the right schedules and demand management strategies are in thebest position to minimize revenue dilution and improve cash-flow.

Future of airline network planning and revenue management

Now more than ever, network planners need to be agile and operate efficiently in a turbulent market. It’s necessary to partner with the right people to handle the complexity of the current environment. As a result of the impact of COVID-19 on its airline customers, Amadeus has further developed its solutions to adapt accordingly. With Amadeus SkyCAST, special calibration was put in place leading to a significant improvement in accuracy and better schedule forecasting. Airlines can evaluate a new market’s revenue potential and enter new markets where existing airlines had cut the service.

As we see flight demand steadily increase, we can still expect a fair share of schedule changes. As the airline industry recovers, closer integrationbetween revenue management and network planning will be critical. With smart technology, airlines will be able to simulate, forecast, and test complex networks and schedules to ensure airlines fly in the most efficient and profitable way. And technology like Amadeus Sky suite will be key in enabling airlines to rebuild travel.

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