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Research Team
Influence of Capacity Constraints
on Airline Fleet Mix
Mark Hansen
National Center of Excellence for Aviation Operations Research
University of California at Berkeley
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Q Mark Hansen
Q Geoffrey Gosling
Q Graduate Student Researchers
• Jean-David Margulici - Airline Response to
Capacity Constraints
• Ilknur Tekin - Regional Airline Markets
• Wen-Bin Wei - Airline Economics
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Outline
Q Motivation and Scope
Q Fleet Composition Trends at LAX
Q Airline Response to Capacity Constraints
Q Aircraft Scale Economies
Q Policy Interventions
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Research Activities
Q Explore Effects of Capacity Constraints and
Traffic Growth on Airline Equipment Decisions
Q Analyze Regional Airline Markets from LAX
and Potential for Use of Larger Aircraft
Q Analyze Trends in Transpacific Markets and
Potential Use of Very Large Aircraft
Q Define and Assess Policy Alternatives to
Encourage the Use of Larger Aircraft
Motivation and Scope
Q Funded by Los Angeles World Airports
• Master plan controversy
• Fleet mix identified as:
• critical uncertainty
• opportunity for reducing required airside capacity
Q Objectives
• Analyze fleet mix impacts of capacity
constraints and other factors
• Identify and assess interventions
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Fleet Composition Trends at LAX
Q Average Aircraft Size
• Passengers per operation
• Market segment trends
Q Market Share of Regional Airlines
• Passengers
• Operations
Q International Traffic
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Trend in Average Passengers per Operation
Trend in Average Passengers per Operation
140
280
120
240
Air Carrier
Hawaii
200
100
Total
80
60
120
40
80
Domestic
40
Commuter
20
International
160
0
0
70
75
80
85
Air Carrier
90
Commuter
70
95
75
80
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Regional Airline Market Share
30
50
25
40
3
30
Operations
2
20
1
10
Percent Total Traffic
Passengers
4
0
85
90
Passengers
20
15
10
Operations
5
0
0
80
Passengers
95
70
75
80
Operations
85
Passengers
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90
95
Operations
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Average Pax per Flight for LAX
Domestic Flight Segments
Average Aircraft Size for LAX
Flight Segments
Q Log-linear model explains
250
300 Miles
600 Miles
1200 Miles
Q Stage length elasticity 0.42
2400 Miles
100
Q Traffic elasticity 0.19
50
over 70% of variation
250
Seats per Flight
150
Q Log-linear model explains
300
over 70% of variation
200
Pax per Flight
95
International
International Traffic Share
60
Percent (Operations)
Percent (Passengers)
5
75
90
Hawaii
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6
70
85
Domestic
Total
200
300 Miles
600 Miles
1200 Miles
150
Q Stage length elasticity 0.33
2400 Miles
Q Traffic elasticity 0.17
100
50
Q No significant change from
0
0
500
1000
1500
2000
Pax per Day
2500
3000
3500
1986 to 1998
Q 12% reduction from 1986
0
0
500
1000
1500
2000
Pax per Day
2500
3000
3500
to 1998
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Regional Service Trends
Enplaned Passengers
Over 500,000
200,000 - 500,000
100,000 - 200,000
50,000 - 100,000
5,000 - 50,000
500 - 5,000
Total
Regional Airline
Markets
1988
1998
1
1
4
1
4
4
4
12
4
6
24
17
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San Diego
Palm Springs
Santa Barbara
Fresno
Monterey
San Luis Obispo
San Jose
Bakersfield
Regional Airline
Market Share (%)
1988
1998
17
62
91
79
71
74
18
65
16
90
100
73
0
10
74
88
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Weekly Frequency SAN-LAX
American Eagle
Delta Connection
United Express
USAirways Express
Alaska
Delta
Pan Am
United
US Air
Other
Total
Changes in Service Pattern
July 88
130
90
94
35
48
35
13
64
49
558
July 98
111
63
141
110
14
439
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Weekly Frequency FAT-LAX
July 88
July 98
American Eagle
Delta Connection
United Express
USAirways Express
39
11
32
48
42
76
54
Delta
US Air
21
40
Total
143
220
Seats
6,700
6,246
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Weekly Frequency MRY-LAX
July 88
July 98
American Eagle
Delta Connection
United Express
20
18
21
35
70
United
US Air
21
20
Total
79
126
Seats
4,803
3,885
Weekly Frequency BFL-LAX
July 88
July 98
American Eagle
Delta Connection
United Express
19
38
33
27
49
56
Total
90
132
Seats
1,787
4,095
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Airline Response to
Airport Capacity Constraints
Q Analyze Variation in Average
Aircraft Size and Pax per Flight
400
350
300
250
200
150
100
50
• Congested vs. uncongested airports
• Slot limitations
• Other factors
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0
less
than
100
120
to
140
140
to
160
160
to
200
More
than
200
Seat Capacity
Seats per Flight vs Stage Length
Sample Flight Segments, 1997
300.00
R=0.57
Q High simple correlation
190.00
(0.7) between delay and
average size
JFK
180.00
170.00
160.00
<600 Miles
150.00
600-800 Miles
800-1000 Miles
140.00
>1000 Miles
DCA
LGA
ORD
Q Average stage length is
250.00
Seats per Flight
200.00
130.00
100
to
120
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Delay vs Average Aircraft Size at
Major US Airports
confounding factor
120.00
200.00
150.00
100.00
110.00
100.00
0
5
10
15
20
50.00
Q Impact of slot control not
25
Average Arrival Delay (min)
0.00
obvious
0
500
1000
1500
2000
2500
3000
Stage Length
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Seats per Flight vs Pax per Day
Sample Flight Segments, 1997
Seats per Flight vs Average Endpoint Delay
Sample Flight Segments, 1997
300.00
300.00
R=0.39
R=0.41
250.00
Seats per Flight
250.00
Seats per Flight
Seats per Flight
450
Number of Markets
Q Based on 45 Major US Airports
• Domestic ops by certificated carriers
• Airport and segment level analysis
Distribution of the Average Seat Capacity over
the Sample Markets
200.00
150.00
100.00
200.00
150.00
100.00
50.00
50.00
0.00
0.00
0
500
1000
1500
2000
2500
Pax Per Day
3000
3500
4000
4500
0.00
5.00
10.00
15.00
Average ASQP Arrival Delay
20.00
25.00
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Multivariate Models of
Average Aircraft Size
Estimation Results
Q Similar for linear and log-linear forms
Q Dependent variables
• Seats per Flight
• Pax per Flight
Q Log-linear results:
Intercept
ln(Pax)
ln(Pax)*ln(Pax)
ln(Stage Length)
ln(Concentration)
ln(Local Share)
Slot
JFK
Q Independent Variables
• Pax per Day (+)
• Stage Length (+)
• Average Endpoint Delay (+)
• Route Concentration (+)
• Slot Control Dummy (+)
• Traffic Composition at Endpoints
• JFK Dummy
ln(Seats per Flight) ln(Pax per Flight)
-2.712
-23.107
0.609
3.411
-0.018
-0.125
0.093
0.196
0.178
0.293
0.034
-0.024
-0.020
-0.006
0.237
0.334
ln(Delay)
0.234
2
R
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0.311
0.55
0.70
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Impact of Delay on Average Aircraft
Size for Typical 1000 Mile Segment
Model Limitations
200
180
Q Based on cross-sectional data
Seats per Flight
160
140
Q Does not capture dynamics of response to
120
5 minutes
15 minutes
100
changes in delay, market size, etc
80
Q Does not capture shifts in airline strategies
60
40
over time
20
0
0
1000
2000
3000
4000
5000
Pax per Day
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Trends in Average Aircraft Size at some
Congested Airports
Trends in Aircraft Size at HDT Airports
(Part 121 Carriers)
210
210
200
190
BOS
180
EWR
LAX
LAX
170
EWR
ATL
160
SFO
150
DFW
SFO
DFW
BOS
140
Overall
ATL
Overall
Average Aircraft Size
Average Aircraft Size
200
190
JFK
LGA
160
120
91
94
97
Overall
Overall
140
130
Year
ORD
150
120
88
JFK
170
130
85
DCA
180
LGA
ORD
DCA
85
88
91
Year
94
97
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Aircraft Scale Economies
Q Choice of aircraft size is tradeoff between:
• Frequency and flexibility
• Economies of scale
Q Empirical evidence of scale economies is
limited
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Aircraft Operation Cost
Function Estimation
Q Relate operation cost to:
• Aircraft size (seats)
• Average distance flown
• Crew and fuel cost
Q Data Sources
• Form 41 Database
• Aggregate quarter data
• Aircraft type specific direct operation cost
• Aggregate airline-level indirect operation cost
• Time period: from 2nd quarter, 1987 to 4th quarter, 1998
• 10 Largest Airlines
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Airport Policy Interventions
QPricing
QRule-making
QPlanning and Design
QConstraints
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Aircraft Operation Cost
Q Direct Aircraft Operation Cost (DOC)
• Pilot and other flight personnel salaries
• Fuel and oil cost
• Cost of renting/leasing aircraft
• Flight equipment maintenance and depreciation
Q Indirect Aircraft Operation Cost
• Line service expense
• Control expense
• Landing fees
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DOC Function Estimation
Results
Cost = A( Size) 0.77 ( ALS ) 0.83 ( Fuel ) 0.31 ( Pilot ) 0.49
Where:
Cost=aircraft direct operation cost per flight
A=airline specific multiplier
Size=number of seats available per flight
ASL=average stage length (flight distance)
Fuel=fuel price per gallon
Pilot=pilot cost per block hour
Results demonstrate scale economies in aircraft size.
May be mitigated by pilot pay scales.