route feasibility analysis

Route Feasibility Analysis

In the current air transport industry, where airports actively compete to attract new services, airports, and (local) policy makers need to gain insight in the un- and underserved routes that are nevertheless feasible. After all, airlines only consider starting up a new operation if they believe it is feasible. From the airline point of view, route feasibility almost exclusively depends on the potential profitability of the given route. Profitability, in turn, depends on a wide range of factors, including passenger demand, passenger type, level of competition, aircraft operating costs, and airline overhead costs.

SEO Aviation Economics provides a comprehensive route feasibility tool that enables airlines, airports, and (local) policy makers to assess the feasibility of possible new airline routes. Airports that that aim to actively attract airlines and for (regional) route development committees, this tool provides valuable information on the routes that are most promising to be developed. But also for governments, Route Development Committees and (start-up) airlines, the route feasibility tool of SEO Aviation Economics is highly effective in assessing the unserved and underserved network potential of an airport.

The SEO Route Feasibility Tool sheds light on the profitability of potential new routes and of scaling up existing routes. The analysis results include estimations of:

  • The passenger demand based on existing O/D passenger flow data (for example MIDT) or based on an in-house detailed gravity model. In addition, the tool assesses the level of market generation resulting from a new or expanded route and takes into account existing competition in the markets concerned.
  • The share of business passengers that generally have a higher willingness to pay and therefore increase the potential profitability of a route.
  • The average air fare, which, among others, highly depends on the level of competition, stage length, and type of airline. The air fare will be estimated with our price model, validated on MIDT data.
  • The operating and overhead costs of the airline involved, based on its cost structure (including staff, maintenance, depreciation, and other overhead costs), as well as on an assessment of the fuel costs depending on current kerosene prices and expected aircraft type.

This figure shows a fictive example of the results of a route feasibility analysis for the Dutch regional airport of Enschede (ENS).

Should you require more information about our Route Feasibility Tool or our other products, please contact Rogier Lieshout at +31 (0)20 525 1672, or at r.lieshout@seo.nl.

 

 

 expertise and research areas  > route feasibility analysis