One of the direct results of air transport liberalization has been the development of publicly supported links on thin markets in remote regions when service is deemed necessary. We present a flight scheduling and fleet assignment optimization model that may assist public authorities to establish the level of service requirements for subsidized air transport networks. With the results of the optimization model, a welfare analysis of the network is carried out, distinguishing between passenger, airline, airport and government surpluses. The optimization model and subsequent welfare analysis were applied to the PSO network of Norway, which is currently the largest in Europe. The results indicate that improvements over the current network can be obtained for all relevant stakeholders simultaneously, with savings in the order of $1.2 million daily.
Bibliographical noteFunding Information:
The authors would like to thank the Israeli Science Foundation for funding 1029-09 which enabled the purchase of data necessary to undertake the case study. Nicole Adler would also like to thank the Recanati Foundation for partial funding of this research. João P. Pita is grateful to the Portuguese Science and Technology Foundation for supporting his PhD work through the MIT Portugal Program (scholarship SFRH/BD/43060/2008). Finally, we would like to thank the editor of this journal and two perceptive reviewers for insightful comments that helped us to improve the paper.
- Air transport
- Fleet assignment
- Flight scheduling
- Optimization model
- Public service obligations
- Welfare analysis