Estimating flight-level price elasticities using online airline data: A first step toward integrating pricing,demand, and revenue optimization

We estimate flight-level price elasticities using a database of online prices and seat map displays. In contrast to market-level and route-level elasticities reported in the literature, flight-level elasticities can forecast responses in demand due to day-to-day price fluctuations. Knowing how elasticities vary by flight and booking characteristics and in response to competitors’ pricing actions allows airlines to design better promotions. It also allows policy makers the ability to evaluate the impacts of proposed tax increases or time-of-day congestion pricing policies. Our elasticity results show how airlines can design optimal promotions by considering not only which departure dates should be targeted, but also which days of the week customers should be allowed to purchase. Additionally, we show how elasticities can be used by carriers to strategically match a subset of their competitors’ sale fares. Methodologically, we use an approach that corrects for price endogeneity; failure to do so results in biased estimates and incorrect pricing recommendations. Using an instrumental variable approach to address this problem we find a set of valid instruments that can be used in future studies of air travel demand. We conclude by describing how our approach contributes to the literature, by offering an approach to estimate flight-level demand elasticities that the research community needs as an input to more advanced optimization models that integrate demand forecasting, price optimization, and revenue optimization models.     

Forecasting bunker prices; A nonstationary,multivariate methodology

This paper suggests a methodological approach for the forecasting of marine fuel prices. The prediction of the bunker prices is of outmost importance for operators, as bunker prices affect heavily the economic planning and financial viability of ventures and determine decisions related to compliance with regulations. A multivariate nonstationary stochastic model available in the literature is being retrieved, after appropriate adjustment and testing. The model belongs to the class of periodically correlated stochastic processes with annual periodic components. The time series are appropriately transformed to become Gaussian, and then are decomposed to deterministic seasonal characteristics (mean value and standard deviation) and a residual time series. The residual part is proved to be stationary and then is modeled as a Vector AutoRegressive Mooving Average (VARMA) process. Finally, using the methodology presented, forecasts of a tetra-variate and an octa-variate time series of bunker prices are produced and are in good agreement with actual values. The obtained results encourages further research and deeper investigation of the driving characters of the multivariate time series of bunker prices.     

Energy savings in transport

A decade of increasing Federal attention to urban transportation needs has culminated in the 1970 Urban Mass Transportation Assistance Act. This Act is intended to provide 10 thousand million dollars over the next 12 years in Federal assistance money to urban public transportation systems. This paper examines the needs of selected U.S. cities as a basis for (1) understanding the vast, various and complex transportation needs of urban areas throughout the country, and (2) assessing the sufficiency of these funds. The sample cities have been placed into three broad categories based on the state of development of their transportation systems. In Category I cities, the essential need is to ensure the survival of bus systems for the use of non‐drivers, or to provide some other viable alternative to the automobile; in Category II cities, the primary needs are to relieve auto congestion and to improve public transportation components, while in Category III cities, the primary need is massive investment to improve and to extend public transportation facilities. It is concluded that the presently intended Federal funding level for transportation will not meet the financial requirements of the Category III cities.     

Conflict-free arrival and departure trajectory planning for parallel runway with advanced point-merge system

In this paper, an efficient trajectory planning system is proposed to solve the integration of arrivals and departures on parallel runways with a novel route network system. Our first effort is made in designing an advanced Point Merge (PM) route network named Multi-Level Point Merge (ML-PM) to meet the requirements of parallel runway operations. Then, more efforts are paid on finding a complete and efficient framework capable of dynamically modelling the integration of arrival and departure trajectories on parallel runways, modelling the conflict detection and resolution in presence of curved trajectory and radius-to-fix merging process. After that, a suitable mathematical optimization formulation is built up. Receding Horizon Control (RHC) and Simulated Annealing (SA) algorithms are proposed to search the near-optimal solution for the large scale trajectories in routine dense operations. Taking Beijing Capital International Airport (BCIA) as a study case, the experimental results show that our system shows good performances on the management of arrivals and departures. It can automatically solve all the potential conflicts in presence of dense traffic flows. With its unique ML-PM route network, it can realize a shorter flying time and a near-Continuous Descent Approach (CDA) descent for arrival aircraft, an economical climbing for departure aircraft, an easier runway allocation together with trajectory control solutions. It shows a good and dynamic sequencing efficiency in Terminal Manoeuvring Area (TMA). In mixed ML-PM mode, under tested conditions, our proposed system can increase throughput at BCIA around 26%, compared with baseline. The methodology defined here could be easily applied to airports worldwide.     

Analysis of air traffic control operational impact on aircraft vertical profiles supported by machine learning

The Air Traffic Management system is under a paradigm shift led by NextGen and SESAR. The new trajectory-based Concept of Operations is supported by performance-based trajectory predictors as major enablers. Currently, the performance of ground-based trajectory predictors is affected by diverse factors such as weather, lack of integration of operational information or aircraft performance uncertainty.Trajectory predictors could be enhanced by learning from historical data. Nowadays, data from the Air Traffic Management system may be exploited to understand to what extent Air Traffic Control actions impact on the vertical profile of flight trajectories.This paper analyses the impact of diverse operational factors on the vertical profile of flight trajectories. Firstly, Multilevel Linear Models are adopted to conduct a prior identification of these factors. Then, the information is exploited by trajectory predictors, where two types are used: point-mass trajectory predictors enhanced by learning the thrust law depending on those factors; and trajectory predictors based on Artificial Neural Networks.Air Traffic Control vertical operational procedures do not constitute a main factor impacting on the vertical profile of flight trajectories, once the top of descent is established. Additionally, airspace flows and the flight level at the trajectory top of descent are relevant features to be considered when learning from historical data, enhancing the overall performance of the trajectory predictors for the descent phase.     

Empirical estimation of price and income elasticities of air cargo demand: The case of Hong Kong

This paper estimates the price and income elasticities of air cargo demand and examines how they may change after the 2008 financial crisis. Using a set of time series data, we simultaneously estimate the aggregated demand and supply functions of air cargo at Hong Kong International Airport (HKIA). We find that during the entire sampling period of 2001–2013, the price elasticity for air cargo transport demand at HKIA ranges from −0.74 to −0.29, suggesting that air cargo demand in Hong Kong reacts negatively to price (as expected) but does not appear to be very sensitive to price. The income elasticity ranges from 0.29 to 1.47 and appears sensitive to seasonality adjustment approaches. However, in terms of the speed of changes, air cargo demand changes much faster than overall economy, indicating the presence of a pro-cyclical pattern of air cargo traffic with respect to the overall economy. Our analysis shows that air cargo demand becomes more sensitive to changes in both price and income after 2008.     

Simulating the air quality impacts of traffic calming schemes in a dense urban neighborhood

In this study, the effects of isolated traffic calming measures and area-wide calming schemes on air quality in a dense neighborhood were estimated using a combination of microscopic traffic simulation, emission, and dispersion modeling. Results indicated that traffic calming measures did not have as large an effect on nitrogen dioxide (NO₂) concentrations as the effect observed on nitrogen oxide (NO_x) emissions. Changes in emissions resulted in highly disproportional changes in pollutant levels due to daily meteorological conditions, road geometry and orientation with respect to the wind. Average NO₂ levels increased between 0.1% and 10% with respect to the base-case while changes in NO_x emissions varied between 5% and 160%. Moreover, higher wind speeds decreased NO₂ concentrations on both sides of the roadway. Among the traffic calming measures, speed bumps produced the highest increases in NO₂ levels.     

Economic factors affecting the registration of lower CO2 emitting aircraft in Europe

We examine the various forces influencing the development and uptake of environmentally beneficial technical changes, focusing on airline technology. Within this context, we consider not only the nature of competition within the final market in which aircraft, an intermediate product, are sold, but also that of the product market itself, the commercial airline industry. The reasons for the gradual reduction in CO₂ per seat per aircraft movement in aircraft design are examined in terms of the real costs of aviation fuel, changes in the nature of the supply industry, the movement towards carbon cap-trade policies, and endogenous technical progress in the technology of the industry. The latter being taken as an empirical proxy for the role market forms play in influencing the fuel efficiency of the types of aircraft used. The results support the existence of these latter forces on the demand for aircraft types, allowing for other influences that affect aircraft technology.     

Impact of transition between signal timing plans in social cost based in delay,fuel consumption and air emissions

Significant effects of traffic congestion include the cost associated with extra travel time, fuel consumption, and gas emissions. This paper develops a mathematical function to quantify the monetary impact of transition designs between signal timing plans on users and the environment. This function offers an approach to reduce problems such as excessive travel time, pollution emissions and fuel consumption. The proposed social cost function is evaluated for various transition plans to assess the impact of the number of steps required to adjust signal timing. The relationships between delay, fuel consumption and gas emissions and the number of steps needed to achieve the transition are also analysed.     

Airport capacity increase via the use of braking profiles

Many airports are encountering the problem of insufficient capacity, which is particularly severe in periods of increased traffic. A large number of elements influence airport capacity, but one of the most important is runway occupancy time. This time depends on many factors, including how the landing roll procedure is performed. The procedure usually does not include the objective to minimize the runway occupancy time. This paper presents an analysis which shows that the way of braking during landing roll has an essential impact on runway throughput and thus on airport capacity. For this purpose, the landing roll simulator (named ACPENSIM) was created. It uses Petri nets and is a convenient tool for dynamic analysis of aircraft movement on the runway with given input parameters and a predetermined runway exit. Simulation experiments allowed to create a set of nominal braking profiles that have different objective functions: minimizing the runway occupancy time, minimizing noise, minimizing tire wear, maximizing passenger comfort and maximizing airport capacity as a whole. The experiments show that there is great potential to increase airport capacity by optimizing the braking procedure. It has been shown that by using the proposed braking profiles it is possible to reduce the runway occupancy time even by 50%.