1. Air Providence A Study into the Effective Operation of a Providence-Based Airline Ilya Gofshteyn AM121/EN131 December, 2006

2. Objectives Choose optimal destination(s) Choose optimal aircraft model(s) Maximize profit for airline based out of Providence, RI

3. Possible Destinations Phoenix Providence Newark Charlotte Orlando Detroit Chicago Philadelphia Baltimore DC

4. Aircraft Choices Embraer 175Boeing 757-200Boeing 737-500

5. The Model The Objective Function Max Z = Σ ij x ij * (P i * t ij - 2.5 * F i * d j ) – (20 * C i * x ij + C i * u i * 1000000) Where x ij = Number of flights per year on aircraft i and route j P i = Capacity of aircraft i d j = Distance from Providence to destination j F i = Fuel cost per mile of aircraft i C i = Capital cost of using aircraft i N j = Demand for flight from PVD to destination j S i = Speed of aircraft i m ij = Flight time from PVD to destination j on aircraft I m ij = d j / S i +1 t ij = Ticket price of for route from Providence to destination j t ij = C i * d j / 75

6. Constraints Budget Constraint Σ(C i u i ) ≤ 100 Non-negativity, Binary, and Integer Constraints x ij ≥ 0 x ij can only be integers u i is Binary Capacity Constraint Σ(x ij P j ) ≤ N j Time Constraint x ij ≤ (365 * 18) / (2 * m ij ) or x ij * m ij ≤ 3285

7. Results Flights per day FLIGHTSPERDAY( BOEING737, BAL) 5.000000 FLIGHTSPERDAY( BOEING737, CHA) 3.000000 FLIGHTSPERDAY( BOEING737, CHI) 3.000000 FLIGHTSPERDAY( BOEING737, DET) 2.000000 FLIGHTSPERDAY( BOEING737, NEW) 1.000000 FLIGHTSPERDAY( BOEING737, ORL) 2.000000 FLIGHTSPERDAY( BOEING737, PHI) 6.000000 FLIGHTSPERDAY( BOEING737, PHO) 1.000000 FLIGHTSPERDAY( BOEING737, WAS) 4.000000 Flights per year and Market Share FLIGHTS( BOEING737, BAL) 1825.000 62.6% FLIGHTS( BOEING737, CHA) 1095.000 89.6% FLIGHTS( BOEING737, CHI) 1095.000 38.2% FLIGHTS( BOEING737, DET) 730.0000 70% FLIGHTS( BOEING737, NEW) 365.0000 69.1% FLIGHTS( BOEING737, ORL) 730.0000 49.7% FLIGHTS( BOEING737, PHI) 2190.000 80% FLIGHTS( BOEING737, PHO) 365.0000 61.8% FLIGHTS( BOEING737, WAS) 1460.000 84.4% Average = 67.26%

8. More Results and Observations Only Boeing 737’s used; reflective of reality. The objective value is 0.1171709E+08 = ~ $11,717,090 All routes are traveled. Least traveled routes are shortest and longest: Newark and Phoenix. Most traveled are medium-range routes: Philadelphia, Baltimore. Flight duration not an important aspect; speed doesn’t vary much.

9. Areas of Improvement Demand function: there isn’t one. ~ Ticket prices ~ Competition ~ Season ~ Travel pattern variations Cost of operation is more complicated ~ Personnel ~ Load Factor ~ Maintenance

10. Bibliography “Bureau of Transportation Statistics”. November 16, 2006. “The Boeing Company”. November 27, 2006. “Empresa Brasileira de Aeronáutica S.A.”. November 28, 2006.