Restarting aviation: Traffic volatility is increasing pressure on airport operations as historical data has little value

Written by Rasmus Kaster, Director Consultancy, Copenhagen Optimization and Emilie Knutz, Consultant, Copenhagen Optimization

In this final of three posts, we will examine how the restart of aviation will impact the airport operations planning and the importance of agile traffic forecasting.

COVID-19 has challenged airport forecasting and planning on an unprecedented level. With a solid methodology, the ability to produce new forecasts with a high frequency and to quickly translate these forecasts into operational plans, airports can overcome the challenge and ensure a successful recovery.

The ability to forecast traffic and size the operation accordingly will be the determining factor in a successful and financially sustainable ramp-up. An accurate forecast provides little value if it cannot be turned into operational efficiencies through optimized planning and execution. The forecast provides a foundational piece of the puzzle. However, to realize its full potential, it needs to be considered as a part of a holistic approach, closely linked with airport planning and operations. 

Scenario 3 of 3: Volatility in seasonal schedules and right sizing the operation

Volatility in seasonal schedules shares similar challenges with the Double Forecast in determining if flights operate and how that will change passenger numbers.

The return of peaks will be driven by the demand from airlines. A likely scenario is that network carriers and low-cost airlines will start to operate the most profitable and coveted routes first – oftentimes resulting in a sharp increase in demand during traditional peak times.

The same situation can be expected from charter companies—assuming a summer return of traffic. As leisure passengers have a different arrival curve for check-in and security compared to business passengers, this could provide the most challenging peaks for airports with a significant amount of both leisure and business travellers at once. Demand from both airlines and charter companies could result in short and sharp peaks, with large distance in between. Such a demand profile challenges the efficient use of staff and resources throughout the airport.

To find a solution for fluctuating peaks, it is important to understand when and how you can be flexible and when you need to act in your planning process.  A good seasonal forecast offers airports the ability to size the operation correctly. The continuum for planning shown below means that the further away from day of operation you are, the less precise your input parameters will be and vice versa. However, the airport has more flexibility to resource differently, change allocation, and open or close infrastructure with the longer planning horizon. The key is to strike a balance between a seasonal forecast you can trust and being able to utilize the remaining maneuverability closer to the day of operations.

Another obstacle to overcome related to volatility in the seasonal schedule is the misalignment between long- and short-term forecasting, capacity planning, tactical planning, and plan execution – often seen at airports. Normally the disjoint arises from a lack of common platforms to forecast, plan, and operate – and results in organizational silos with teams working based on differing input parameters and not fully utilizing the work of the other functions and teams.

The challenge with the seasonal forecast and sizing the operation lies in minimizing uncertainty and ensuring the capability to quickly turn the forecast into capacity planning and tactical plans for the airport.

Potential solutions

To ensure resources are used efficiently, good information about passenger numbers and their effects on the operation is essential—and trust is key. Building trust in your data and forecast takes time as well as a solid and well-argued analytical approach, and a common platform that centralizes information with consolidated dashboards.

A common platform will provide a high degree of transparency which will help engage stakeholders throughout the airport. If you understand the needs of your stakeholders, you can provide them with insights to improve their performance and ensure an overall improvement to airport performance and passenger satisfaction. Furthermore, by centralizing the information with consolidated dashboards all users can see updates and get information about the wider implications of changes in real-time.

To land a well-functioning planning set-up that ensures accurate forecasts and timely updates, we suggest a setup where automated data feeds continuously update the tactical plans on a rolling basis. This allows planners to make informed decisions on resource allocation based on the newest available information. The tactical planning phase with a time horizon of 4-6 weeks is an important milestone. Data validity is high and staffing schedules for the operational areas must be locked in. Here, the opportunity to change resource allocation arises at a critical time, since you are close enough to the time of operation to have sufficient certainty of the outcome, but there is still room to make changes.

Also, a common forecasting and planning platform for forecasters and planners can help remove siloes in the organization. Sharing forecasts and plans will help achieve synergies across your organization, and airports need to create a direct link between the different forecast and planning horizons to ensure they use the input provided by their colleagues.  This way your ability to quickly respond to volatility in traffic improves and your operation becomes more robust.

Recommendations:

• Build trust in your seasonal planning by introducing automation in data feeds and centralizing information
• Utilize a probability methodology to understand if flights operate
• Ensure you have a common platform to share forecasts and plans
• Break down silos and achieve the intended synergies in the organization

Restarting aviation by relying on the cornerstones of forecasting

This series of blog posts has examined how the restart of aviation can be expected to impact airport operations planning, and the importance of agile traffic forecasting. It has provided insights into three cornerstones of forecasting and planning, which can be expected to lead any airport towards recovery.

First off, to overcome the current volatility, airports need to utilize and upgrade their current forecasting capabilities. It is recommended to introduce an automated forecasting process, with integrations to ensure real-time updates of the flight schedule. This approach ensures that changes close to day-of-operation are quickly reflected in all plans. Furthermore, it is necessary to work with different probability-based scenarios – Double Forecasts – not just for the number of passengers, but also for whether flights will actually take-off and arrive.

The approach for addressing volatility is mirrored in how to deal with changing passenger arrival patterns linked to a reality with government restrictions and vaccination passports. Since the requirements can change from day to day, frequent updates of your calibration are necessary to ensure that your forecast matches the operational realities. This requires a close link between your forecast solution and planning solution and enables your airport to update and optimize operational plans in minutes rather than hours or days once new data becomes available.

Finally, to fully benefit from optimized forecasts and plans, the information needs to be communicated to all stakeholders—internal and external. The best solution is a common operating platform where information can be shared, and plans executed. A shared platform will provide transparency for all stakeholders, building the necessary trust to operate efficiently. The operational efficiency will be further improved by integration to data feeds that support real-time updates, so everyone can see the wider implications of changes as soon as information is available and act accordingly.

It is an unprecedented time for airports worldwide, challenging the whole industry to rethink and innovate the approach to airport operations. As this article series has shown, there are ways to manage the volatility and ensure a solid recovery. While this is unlikely to happen without rethinking processes and investing in technology, an investment will benefit much more than just the short-term recovery. Done right, it will build the foundation for a data-driven airport that can adjust to changing circumstances without delay, make the most of its resources, and provide a safe and world-class passenger experience.

Rasmus Kaster holds an MA in International Studies from Durham University. Before joining Copenhagen Optimization, he has worked as a military linguist (Persian) for the Danish Armed Forces and with strategy and controlling for the police. He is a firm believer that data, and the optimal visualization thereof, is the foundation for good governance and decision making on all levels of an organization.

Emilie Knutz holds an M.Sc. in Mathematical Modelling and Computation from the Technical University of Denmark, with a specialization in Operations Research and Data Analysis. She enjoys combining and modifying data analytical tools to identify areas of improvement.

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