People regularly reach out to me to know more about Network Planning and ways to become a network planner. With a little more time at hand, thanks to the time saved in commuting, I decided to pen down what network planning is. This won’t look like a regular post but I hope this is a helpful one and throws more light about this trait.
The last five years have seen citizen movements for air connectivity. Some have self funded the data required for analysis and taken them to airlines to start flights and petition government to increase or amend bilateral rights.
With the advent of social media, it is very easy to find out the network changes by an airline. At times it leads to a huge hue and cry – why did the airline cancel this flight and redeploy it there? We always saw good loads! The timings should have been in the morning with a second flight in the evening! Unending as it may seem, the airlines have reasons for the changes – strategic, seasonality, financial, use, crew and more but the underlying focus always remains profitable operations at all times.
Is it really a game of darts?
The web is filled with interviews of heads of Network Planning across airlines were asked if Network Planning is a game of darts. No matter how it sounds or looks at times – it never is! Airline network planning is a serious business involving deep understanding of the market, costs of the airline, information of aircraft in fleet and airports evaluated coupled with data science.
A good route can swing fortunes of an airline and at the same time a bad one can swing it the other way round. Sometimes, it’s the competition which can hit you hard. In the end, for a company which is in the business of transporting people – one needs routes where people move – in numbers which are significant to command fares which are more than the cost and has enough room for expansion. Combine this with brand image, fares, timings, service and distribution to have a perfect combo.
But how is it done?
Larger airlines have access to data. Though costly, it comes in handy to help understand the traffic. Typical data sources are PaxIS from IATA. Over the years, multiple other sources have come up which include things like just the airline schedule or data related to flown passengers. What does this data tell you?
- It tells you total passengers between a city pair (Say Mumbai and London)
- Passengers who fly direct
- Passengers who fly one-stop or multiple-stop
- Which airline has how much share of the market
This and more helps one understand the profile of the passenger, the demand and supply patterns of a route and the dominant carrier. This also helps one understand if the route is feeding into another carrier for journey onwards or if you are likely to get any feed from the traffic.
Once a couple of routes are shortlisted, teams run a simulation to understand the costs and see what the feasibility is and when the route can break even. This gets coupled with additional parameters like bilateral rights, cost of overflying, and landing at alternate airports in emergency amongst others before a route can be proposed and approved by the management.
This is a continuous process. Routes which weren’t approved are constantly studied and so are many other routes. Typically, planning involves short term – which is the current season, medium term – about a year down the long and long term – about four to six years down the line.
Routes we can’t serve and difficult to predict routes
While buying/leasing an aircraft is a strategic decision, a lot of inputs for this decision are driven by Network Planning. Take this example, No wonder then that as airlines started growing, both Spicejet and IndiGo opted to have another aircraft type in its fleet – the Q400 and ATR72-600 respectively to connect to the hinterlands in the country, where the traffic is expected to boom in years to come.
While it may look very attractive to fly to Shimla from New Delhi, just by looking at the fares, does it make sense for an airline to have just one or two ATR42s in the fleet which can operate to Shimla? Probably not and hence nobody has invested in such an aircraft.
But if there are sizable routes where a new aircraft type could make sense, airlines do roll this up to the top and explore if it is wise to add an aircraft type. Is it a risk or de-risk?
The most difficult ones – where the art is equal to science are routes which are virgin. How do you justify starting a virgin route without having past data? That’s where demographics, economy, geography and a plethora of other factors come into picture and a good network planner would always be on top of things other than data. Empirical evidence, traffic flows, other modes of transport become valuable when planning such routes.
Assigning the right plane to right route
If a carrier has more than one type of aircraft in its fleet, like say Air India – quick templates help understand the assignment of aircraft to a route which can change often. Let’s take an example we all understand. Deploying a higher capacity A321 from Mumbai to Goa on Saturday morning makes more sense while on other days, the A319 could do the mission. Likewise, the traffic is relatively lower between Mumbai and Delhi on Sunday morning, so the A319 can do the mission instead of A321.
IndiGo – with its A320, A321 and ATR shifted a lot of flights between the Airbus and ATRs, especially in the south to find the right balance.
Network Planning in current times
What must the network planners be doing currently? Well while airlines are grounded, plans are still afoot to start services in phases and the pick and choose from the network means, trying to fit in the most optimum schedule in the minimum number of aircraft to keep the costs low.
In addition to that, various parameters get played out – What if the recovery is at “X” %, what if it is lower or higher and how would things play out? These inputs directly help the engineering teams plan maintenance and long term parking of the planes and in-turn helps the cash position of the airline in such critical times.