Wayne State researcher develops IISE award-winning airline scheduling optimization tool
Based on forecasted demand, airlines typically plan more than a year in advance in regard to fleet and equipment designation, budgets, crew scheduling, gate assignments and other tactical areas. But when near-term factors — ranging from competitive pricing to entertainment and tourism trends — disrupt those plans, an imbalance of supply and demand results.
Saravanan Venkatachalam, assistant professor of industrial and systems engineering at Wayne State University, examined a potential solution to the obstacles airlines face in these scenarios. His project, “Prescriptive Analytics for Swapping Aircraft Assignments at All Nippon Airways,” earned first place among teams competing for the Outstanding Innovation in Service Systems Engineering Award, sponsored by the Institute of Industrial and Systems Engineers (IISE) in partnership with Penn State University.
Venkatachalam’s collaborators included Suresh Acharya, professor of practice at the University of Maryland’s Robert H. Smith School of Business, and Kenji Oba, president of Juro International Systems Inc.
The Outstanding Innovation in Service Systems Engineering Award, bestowed to the top three teams at the IISE Annual Conference and Expo in May, recognizes organizations for the development of innovative techniques to improve the performance of service industries. A recipient of this award must show the innovative and effective implementation of industrial and systems engineering principles and practices in real service systems.
The paper introduced the swapper optimization suite (SOS), which was designed to better manage the near-term challenge of potential mismatches between the types of aircrafts assigned to flights and the projected demand based on on-hand bookings and the booking pace.
“The SOS is an optimization solution for maximizing profitability while satisfying all operational requirements,” said Venkatachalam.
All Nippon Airways (ANA), the largest airline in Japan, has roughly 260 aircraft flying 85 international routes and 119 domestic routes. The company integrated SOS on top of its existing fleet assignment model to improve decision-making processes and employing swapping strategies to match recent capacity demands. In doing so, ANA also had to be mindful of additional challenges that could arise, such as pilot and crew assignments, customer service, and aircraft maintenance.
“Given the large number of aircraft and flights and complex requirements for the fleet assignments, an efficient tool such as the SOS is required for producing meaningful recommendations,” said Venkatachalam.
The SOS can be used to determine both the feasibility and profitability of schedules. The tool’s optimization engine factors in three input streams: “unconstrained” revenue – that which would be expected if capacity limitations are ignored — and current fares, existing schedule and fleet information, and operational constraints.
Among the benefits of ANA’s implementation of SOS were a reliable and fast response, minimal human intervention and a high acceptance rate of proposed swaps. ANA also saw monetary benefits, including ¥339 million in July 2017.
“With advances in algorithmic techniques and computational power, the SOS has matured into a dependable tool in the schedule development process,” said Venkatachalam.