Savvier Airline Schedules, Fewer Cheap Fares

Thursday, October 23rd, 2008

Savvier airline schedules should lead to fewer cheap fares, as airlines stop flying low-demand routes just to keep the schedule the same from Monday through Friday:

No airline has a more complex schedule than Southwest. The low-cost carrier now has more daily flights than any other airline, and it runs a frenetic operation with planes hop-scotching across the country and spending only 20 or 30 minutes on the ground. With more than 500 airplanes and 60 cities to link together, there are literally billions of different ways to set the airline’s schedule.

As a result, Southwest made fewer schedule changes historically than other airlines, and for most of its history was writing schedules by hand. Each new schedule was simply a copy of the previous, with a few changes here and there. But all that has changed.

Southwest’s November schedule was developed with an upgraded version of its in-house schedule-optimization system that reworked the airline’s entire 3,400 daily departures. The airline now flies a completely different schedule on Saturdays — in the past it just erased some flights here and there from the regular schedule on Saturdays. Now some cities like Omaha, Neb.; Salt Lake City; Oklahoma City; and Tulsa, Okla., get nonstop flights to Orlando only on Saturdays.

In January, Southwest will cut 190 flights, reducing its capacity by 6% in the slower winter travel season. That’s more schedule jockeying than the airline has ever done before. And next year, it will add Minneapolis-St. Paul to its route network without increasing its capacity. The scheduling system trimmed flights here and there and improved efficiency, freeing up airplanes to fly to and from Minneapolis.

I think the Wall Street Journal buried the lede on this one:

Southwest’s computer reworked a flight from Austin, Texas, to Orlando because it figured out that the departure around 8 p.m. wasn’t desirable for leisure customers because they’d arrive after 11 p.m. in Florida. Moving the departure to 2 p.m. boosted demand for that flight.

In the past, Southwest’s schedule planners penciled out routes for each aircraft for a seven-day week, with Monday-Friday usually identical, and some changes on the weekend. Schedules were hand-written on sheets of paper that were taped together in scrolls reaching as long as 30 feet.

Southwest tried to hire consulting firms or software providers to devise a system for its unique way of operating. But most airline scheduling systems are geared to long-haul, hub-and-spoke carriers where planes fly into and out of the same city over and over again and airlines want to maximize flight connections. None of the 20 companies Southwest talked to could produce a scheduling system to do the whole job.

Then a Southwest employee, Alex Heinold, came up with a breakthrough on his home computer, devising a formula to match the airline’s unique operation.

It took several years, but the company built the idea into a home-grown schedule “optimizer,” and used it on real schedules for the first time in 2004. The computer took six airplanes out of Southwest’s schedule without cutting any flights, a saving of $180 million in aircraft purchases. The schedule was run through the system again in 2006, and earlier this year, a more advanced system was put into regular use. “We’ve been able to decrease almost every devil that plagued us,” said John Jamotta, senior director of schedule planning at Southwest.

Optimizing the schedule has a benefit for travelers — flights timed when people most want them, going to the places they most want to go, Southwest says.

There is a potential downside — fewer bargain-basement prices.

(Hat tip à mon père.)

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