Demand Driven Dispatch: A Method for Dynamic Aircraft Capacity Assignment, Models and Algorithms

A major problem for the airline industry is the assignment of airplane capacity to flight schedules to meet fluctuating market needs. Demand Driven Dispatch ( D 3 ) is an operating concept that addresses this problem. Utilizing a demand forecast which improves as flight departure approaches, aircraft are dynamically assigned to flights to better match the predicted final demands. The result, demonstrated in studies of actual airline systems, is an increase in passenger loads and revenues with simultaneously reduced costs for a net of 1–5% improvement in operating profits. Concept implementation is simplified by the prevalence of yield management systems which provide the forecasting capability, and the emergence of airplane families which provide the necessary operational flexibility. Implementation also requires frequent solution of extremely large aircraft assignment problems. These problems, which can be formulated in terms of a multicommodity network flow, can be solved with heuristic algorithms shown to exhibit an accuracy and efficiency essential to successful concept implementation.