Yemenia Focus (Issue No. 3) HEAD TO HEAD ANALYSIS JEDDAH OR DOHA OPERATION! By : Mohammed Salem Awad Aden Regional Director - Yemenia Usually Airlines operate to any destination based on the sound of the market, which will add incremental revenue/profit to the network of the airline. However, really it is a question of GO or NO GO first on papers before we put a huge investment of money for nothing or poor decision. We have two scenarios in such cases based on the request situation, 1- First, if the destination is a new one for the network, for the airline, we have to use Gravity Model. To evaluate the demand. 2- Second, while if this destination is existing one but we want to evaluate and compare it with another one due to our limited resources, then we have to study the historical data to predicate the right demand. (Our case study) The Problem: Due to Yemen crises, the operation from Aden is the economic one as Aden airport at a Sea Level. Therefore, a primary network is setup that includes Doha (DOH) and Kuwait (KWI) by top management of Yemenia in Cairo, the proposed table is attached ( appendix ). The past tell us the most successful destinations from Aden are Jeddah (JED) and Riyadh (RUH) but unfortunately, they are not addressed in the table. So how to come with right decisions to compare these destinations in numbers, what are the basic rules to solve this problem, what is the right seasonality pattern of these sectors, how many flight per month, and how many passengers per flight to be.
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Yemenia Focus (Issue No. 3) HEAD TO HEAD ANALYSIS
JEDDAH OR DOHA OPERATION!
By : Mohammed Salem Awad
Aden Regional Director - Yemenia
Usually Airlines operate to any
destination based on the sound of the
market, which will add incremental
revenue/profit to the network of the
airline. However, really it is a question
of GO or NO GO first on papers
before we put a huge investment of
money for nothing or poor decision.
We have two scenarios in such cases
based on the request situation,
1- First, if the destination is a new
one for the network, for the
airline, we have to use Gravity
Model. To evaluate the
demand.
2- Second, while if this
destination is existing one but
we want to evaluate and
compare it with another one
due to our limited resources,
then we have to study the
historical data to predicate the
right demand. (Our case study)
The Problem:
Due to Yemen crises, the operation from Aden is the economic one as Aden airport at
a Sea Level. Therefore, a primary network is setup that includes Doha (DOH) and
Kuwait (KWI) by top management of Yemenia in Cairo, the proposed table is
attached ( appendix ). The past tell us the most successful destinations from Aden are
Jeddah (JED) and Riyadh (RUH) but unfortunately, they are not addressed in the
table. So how to come with right decisions to compare these destinations in numbers,
what are the basic rules to solve this problem, what is the right seasonality pattern of
these sectors, how many flight per month, and how many passengers per flight to be.
2 2
Basic Concept of Forecasting Model:
Forecasting is a unique science, very useful in
practice, and use widely in many fields,
especially Aviation. Here we are concerning on
the application of Forecasting for Airlines, and
Airports. Airlines can define their seasonality,
and its impacts on operations and maintenance
programs, we have to define the right demand for
the right sector in the right segment. While most
of Investors in Airline Industry are concerned for
the performance factors that’s Traffic and
Capacity, RPM ,ASM , and Load Factor. They
are evaluated them by comparing their values in past according to month-by-month
approached. Here we look forward, to future to set targets. So forecasting is tilling us the future patterns for these factors, which
consequently, we can develop and forecast the expected Load Factor, which
means also define the future performance for airlines. There are many
methods of forecasting, but the approach of Max/Min Signal Tracking,
deliver the best scenario for the data that can be analyzed. No grey region,
just in a black and white / Good or Bad based on the constrains that we are
applied.
Objective:
The main objective of the study is to developed a solid foundation of data that may
reflect the future, yes the country in total mess, so we will not address the goodness of
fit as a main factor to accept the study, but we will work on
1- Averages Trend Line That Have A Zero Growth, and
2- Defining the Seasonality Index of Stable Period.
If these two steps are evaluated, then we can explore and extend the model to the
target period safely.
Basic Data:
The data are number of passengers and cycles that reported by Aden airport.
Three basic periods are addressed:
1- 2008-2010 (Stable Period – Basically use for analysis)
2- 2011-2015 (Yemen Crises Period)
3- 2015-2016 (Target Period - Forecast)
Unstable Period Forecast Stable Period
3 3
Analysis:
1- Jeddah Sector. (JED)
Jeddah is a unique destination, it characterize by Amera and Haje seasons, with
normal patterned of airline seasonality model. Two operators dominate the operation
the sector ADE-JED i.e Yemenia (IY) and Saudi Arabian airlines (SV) they operate a
direct flights. The period of the analysis is 2008-2010. While the target period is
2015-2016.
The analysis address the passengers and the cycles, so we can evaluate passengers per
flight.
- Passengers
- Cycles
4 4
2- Doha Sector. (DOH)
Doha is gulf competitive hub for Asia continent, but the operation to other side i.e to
Africa needs a lot of investments, yes Yemenia can operate on the bases of 3th
and 4th
traffic freedom but that operation is not enough to run a feasible operation, based on
the data base of 2008-2010 period, which shows a poor traffic movements ended by
stopping the operation to Aden airport at half period, except those indirect flights,
represents by 1 flights in the graph. The analysis address the passengers and the
cycles, so we can evaluate passengers per flight.
- Passengers
- Cycles
5 5
Results:
Jeddah Operation
Doha Operation
Conclusions:
The propose of study is to find a solid base that we can move forward, the concept is
to evaluate Flight/week, based on stable historical data (2008-2010), overriding the
crises period with a zero growth and reflecting the same seasonality index for the
target period (2015-2016). Using a typical forecasting model.
The results are fair; we use the same assumption on both cases for Jeddah and Doha
operation.
Based on the result tables Jeddah destination is in a better position to serve Aden,
even though there is traffic flow for Doha but it is not for feasible operation.