Airline Planning and Operation: Towards planning under probability and recovery

Airlines are constantly facing uncertainties such as fluctuating passenger demand, volatile prices and operational disruptions such as reduced airport capacity, unexpected aircraft unavailability, and delayed or cancelled flights. In view of this, increasing numbers of publications have appeared over the last few years dealing with uncertainty in airline scheduling. This paper provides a review of the current state-of-the-art and possible future directions for airline planning and operation under uncertainty. Major approaches, namely robust planning/scheduling and disruption management and their challenges are presented. We explore the application of a novel approach, chance constrained programming (CCP), to deal with uncertainties in airline planning. This approach is extended to compute the expected airline revenue when the ticket price and the passenger demand are uncertain and correlated. We also propose the application of risk management (Conditional Value-at-Risk) to support more robust airline planning. Finally, we discuss possible ways of integrating robust planning with disruption management and suggest an integrated approach which leverages the capabilities of major approaches.