Term Paper on "Operations Scheduling and Control in the Airline Industry"

Term Paper 6 pages (1814 words) Sources: 6 Style: APA

[EXCERPT] . . . .

Flight Operations and Scheduling in the Airline Industry

Although the airline industry was rocked by the terrorist attacks of September 11, 2001, many carriers have overcome this aftermath to emerge as profitable carriers with numerous opportunities for growth on the horizon. The successful carriers that managed to weather this aftermath were characterized by high levels of employee commitment and loyalty, such as the case with Southwest Airlines, while others sought to achieve a competitive advantage by eliminating waste at every opportunity and improving their supply chain management procedures. The recent purchase of a petroleum refinery by Delta Airlines described by industry analysts as a "fixer-upper" also suggests that some of the major actors in the airline industry are facing the harsh reality that their traditional business models may not be viable in the 21st century. One of the hallmarks of the successful air carriers, though, has been efficient flight operations and scheduling that contributes to passenger satisfaction and brand awareness. To determine how some air carriers have succeeded in this area while others have failed, this paper provides a review of the relevant peer-reviewed literature dated within the last 5 years. A summary of the research and important findings are presented in the conclusion.

Review and Discussion

The importance of an efficient and modern air industry to the nation's commercial and security interests is well established, but the industry has experienced a number of significant shocks and challenges in the last decade, including most especially the terrorist attacks of September 11, 2001, that have bankrupted some carriers while forcing the survivors to become even more cost effective in their operations (Guzha, 2008). Unfortunately, despite their best efforts, many carriers are struggling to remain afloat during a period of rising energy costs and increasing competition, due in large part to their reliance on conventional business models that lack the responsiveness needed to be nimble and profitable. In this regard, Guzhva emphasizes that, "The majority of the U.S. airline industry losses in the post-September 11 period can be explained by the inability of the traditional airline business model to profitably operate in times of unfavorable economic conditions, increasing competition and decreasing yields" (2008, p. 244).

The airline industry is certainly not unique in its need to satisfy its customers, but some carriers are doing a better job at it than others when it comes to flight scheduling. It is reasonable to suggest that most air passengers expect timely, efficient and safe services from their carriers, and delays can have severe consequences for travelers. According to Bishop, Rupp and Zheng (2011) and his associates, "Airline flight delays, like any other form of waiting for service, may negatively affect customers (passengers) in many ways. A passenger may not mind a delay of 10, 20, or even 30 minutes, but anger, anxiety, uncertainty, and boredom mount at an increasing rate as a delay prolongs" (p. 544). The U.S. Department of Transportation (DOT) defines an air flight as being "delayed" in those cases where it arrives 15 minutes or more late (Bishop et al., 2011). Fifteen minutes may not seem like much, but to air passengers already faced with long security and check-in lines, that 15 minutes may mean the difference between arriving on time at their next destination or not. In some cases, even minor delays can cause passengers to miss subsequent connecting flights and the adverse public relations that is generated by these high-profile events is severe. In this regard, Bishop et al. add that, "Delays can increase passengers' anger, uncertainty, and dissatisfaction with the service provided. In addition, flight delays are costly" (emphasis added) (2011, p. 244).

Besides the inconvenience and dissatisfaction to air passengers caused by flight delays, there are some enormous costs associated with flight delays as well. During a period when jet fuel costs are skyrocketing, flight delays can eat up airline profits when aircraft are sitting on the runway waiting to take off. Indeed, a recent report from the Joint Economic Committee estimated that domestic flight delays in the United States cost the airline industry and passengers more than $40 billion in 2007 alone (Bishop et al., 2011). Unfortunately, despite increasing airline industry attention on this specific performance area, things actually appear to be getting worse instead of getting better. For instance, in December 2007, almost 33% of all domestic flights in the United States arrived at their destinations late and 2007 had an annualized late rate of almost 25%, the highest levels since the Bureau of Transportation Statistics began keeping statistics on flight delays in 1995 (Bishop et al., 2011). In response to the growing flight scheduling problems, the Federal Aviation Administration has begun imposing financial penalties of up to $25,000 per violation for flights that are chronically delayed (Bishop et al., 2011).

In reality, though, air carriers are not solely to blame for their sometimes-abysmal performance in flight scheduling in recent years, notwithstanding the high costs that are involved to the contrary. For instance, Cohen, Coughlin and Ott (2009) report that, "Many factors, such as weather and mechanical problems [as well as] the delays and congestion associated with the scheduling of flight arrivals and departures determine an airport's on-time performance" (p. 569). One of the major problems that has contributed to excessive congestion at many of the nation's airports has been the practice by major carriers to schedule their flights without taking into account the impact their scheduling has on other domestic and international carriers. In this regard, Cohen (2009) and his associates note that, "Generally speaking, an airline schedules its flights without regard to the costs it imposes on other airlines and their passengers. When airlines schedule more flights to and from an airport than that airport can accommodate, flights are delayed. These delays impose large costs on the airlines themselves and, ultimately, on passengers" (p. 569).

In fact, the Federal Aviation Administration (FAA) has long recognized the need to develop improved approaches to organizing American air space to facilitate flight scheduling and to allow more planes to fly during the same period of time (Kahn, 2009). To this end, the FAA divides the constellation of flight-delay problems into four discrete areas: (a) arrivals and departures, (b) en route congestion, (c) en route severe weather, and (d) airport weather (Kahn, 2009). Clearly, unexpected events in any one of these categories could cause flight delays, and unexpected events in a combination of these categories could add up to significant delays making the need for the most efficient information technology solutions available paramount (Kahn, 2009).

In response to this emerging need, Kahn (2009) reports that the FAA developed an Operational Evolution Plan (OEP) in 2000 that would serve as the framework in which the four discrete sources of flight delays could be addressed. Prior to the implementation of the Operational Evolution Plan (OEP), Kahn points out that, "Airports were already crowded when unusual and frequent patterns of bad weather hit aviation especially hard. Delays and canceled flights became almost daily events" (2009, p. 20). Following the terrorist attacks of September 11, 2001, the usefulness of the OEP framework was clearly demonstrated. In this regard, Kahn notes that, "The most important characteristic of the OEP structure was its adaptability. As needed, it changed to meet new demands and technologies, adapting to new security procedures and unexpected economic constraints and gradually including promising research and emerging technologies" (p. 20).

In fact, researchers are actively pursuing software solutions that can integrate the four discrete sources of flight delays to formulate alternatives based on weather and congestion conditions at other airports (Hasan & Hammad, 2010). According to Hasan and Hammad, "The fleet assignment problem for airline industries addresses the question of how to best assign aircraft fleet types to an airline's schedule of flight legs. . . . The scale and complexity of fleet assignment problems and their large cost implications have motivated the development of optimization-based methods to solve them" (2010, p. 373). Likewise, Niemann, Mochol and Tolksdorf (2008) report the results of recent research into developing more intuitive software applications that can draw on a wide range of information sources to provide airlines and travelers with improved flight scheduling capabilities. In this regard, Niemann et al. report that, "The Semantic Web-based approach has been prototypically tested within a hotel booking system. Its application may be extended into travel planning by incorporating more semantic relations such as conceptual descriptions of additional parts of a trip like booking flights, trains or buses" (p. 83).

Beyond the four discrete sources of flight delays cited by the FAA, the cloud-based solution developed by Niemann and his colleagues (2008) also considers a number of other travel-related variables that can help provide travelers with the best possible real-time solution in real-world settings. In this regard, these researchers report that: "The detailed preferences of a customer must be taken into account and knowledge about specific constraints (e.g. connection flights to the U.S. might require a longer check-in time) can be automatically used to infer the 'best' route.… READ MORE

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