Airline planning benchmark problems - Part II: Passenger groups, utility and demand allocation

This paper is the second of two papers entitled “Airline Planning Benchmark Problems”, aimed at developing benchmark data that can be used to stimulate innovation in airline planning, in particular, in flight schedule design and fleet assignment. The former has, to date, been under-represented in the optimization literature, due in part to the difficulty of obtaining data that adequately reflects passenger choice, and hence schedule revenue. Revenue models in airline planning optimization only roughly approximate the passenger decision process. However there is a growing body of literature giving empirical insights into airline passenger choice. Here we propose a new paradigm for passenger modelling, that enriches our representation of passenger revenue, in a form designed to be useful for optimization. We divide the market demand into market segments, or passenger groups, according to characteristics that differentiate behaviour in terms of airline product selection. Each passenger group has an origin, destination, size (number of passengers), departure time window, and departure time utility curve, indicating willingness to pay for departure in time sub-windows. Taking as input market demand for each origin-destination pair, we describe a process by which we construct realistic passenger group data, based on analysis of empirical airline data collected by our industry partner. We give the results of that analysis, and describe 33 benchmark instances produced.