A policy sensitive algorithm for air transport forecasting in

a deregulated airline industry

A study of the interdependence of main factors governing the development of air transport. The algorithm developed
produces forecasts of the aircraft type, number of flights and passenger volumes at hub airports for the two cases
of airline profit and consumer surplus maximization. It comprises sub-models for air transport demand, aircraft
operating costs and runway delay and has been applied to assess the market potential of a proposed civilian
tiltrotor aircraft within the context of different policy scenarios.

The work comprised the definition and estimation of a tri-modal econometric direct demand model, the
development of a model for fixed and variable aircraft operating costs and the design of a statistical runway delay
model which expresses flight delay as a function of traffic level. All three models were integrated into an algorithm
within which they influence each other and thus form a self-constraining control loop.

The model is policy sensitive such that different air transport scenarios can be tested. The algorithm gives results
for both a regulated and a deregulated air transport environment and thus allows to assess the effect of price
regulation upon the entire system. Furthermore, the influence can be quantified that the much discussed
measures of different landing fee strategies and a limit on turboprop operations have upon aircraft selection
and the level of runway congestion.