Imagine if airports could accurately predict passenger growth when launching new routes, enabling them to attract airlines more effectively. This capability would create significant development opportunities. For years, airports have faced numerous challenges in expanding their route networks, including high time costs, substantial resource investments, and difficulties in assessing market potential. However, new route launches serve as a critical indicator of an airport's market value. This article explores how aviation data, particularly from OAG (Official Airline Guide), can help build route stimulation curves to optimize route development.
The Concept and Importance of Route Stimulation Curves
A route stimulation curve is a predictive model that estimates passenger growth after launching new routes. It analyzes existing indirect passenger traffic data and combines it with growth patterns from previously launched routes to forecast new routes' market potential. Specifically, this curve demonstrates how total passenger traffic (including both existing indirect traffic and new direct traffic) grows when direct routes are introduced in specific markets. This growth isn't merely substitutional; rather, the convenience of direct flights stimulates latent travel demand, thereby expanding the overall market size.
The Role of OAG Data in Building Route Stimulation Curves
As a global leader in flight information, OAG provides comprehensive aviation data including schedules, fare information, and load factors. This data forms a solid foundation for building route stimulation curves. Through OAG data analysis, airports can:
- Identify potential markets: Determine city pairs with high existing indirect traffic that may justify direct routes.
- Assess market size: Precisely estimate current indirect passenger volumes as a baseline for new route projections.
- Simulate passenger growth: Reference historical growth patterns from similar routes to forecast potential expansion.
- Optimize network planning: Use data insights to improve route network efficiency and performance.
Case Study: Route Stimulation Curves in Asian Markets
OAG conducted extensive research on Asian markets, analyzing approximately 2,500 city pairs to develop regional route stimulation curves. Findings revealed that in Asian markets where indirect traffic reaches about 100,000 passengers annually, introducing direct routes could stimulate over 50% growth in total traffic. This insight provides valuable guidance for Asian airports' route development strategies.
For example, if Airport A considers launching a route to City B, OAG data might show existing indirect traffic of 80,000 passengers. According to Asian market stimulation curves, Airport A could project total traffic exceeding 120,000 passengers after introducing direct flights. Such projections strengthen airports' negotiating positions when discussing new routes with airlines.
The Value of Airport-Specific Stimulation Curves
While OAG's regional curves offer useful benchmarks, each airport's unique geographical position, economic conditions, and passenger demographics necessitate customized stimulation curves. By combining historical operational data with OAG's external datasets, airports can develop more accurate, tailored models for route development.
Implementation Methodology
The process involves five key steps:
- Data collection: Gather 5-10 years of internal operational data (passenger volumes, fares) alongside OAG's external datasets (schedules, load factors).
- Data preparation: Clean, organize, and standardize datasets to ensure accuracy and consistency.
- Model development: Select appropriate analytical methods (linear regression, exponential smoothing, neural networks) to build predictive models.
- Model validation: Test models against historical data to verify predictive accuracy.
- Operational application: Implement validated models to forecast new route performance and guide network decisions.
Opportunities and Challenges
Asia presents compelling opportunities with nearly 2,000 city pairs demonstrating annual passenger demand between 25,000 and 100,000. However, developing effective stimulation curves involves several challenges:
- Data quality: Accurate, complete datasets are essential for reliable modeling.
- Model selection: Choosing appropriate analytical methods requires specialized expertise.
- Market dynamics: Regular model updates are necessary to reflect changing market conditions.
Route stimulation curves represent a powerful tool for airport route development. By leveraging OAG's aviation data, airports can create precise, customized models to attract airlines, expand networks, and enhance competitiveness. While implementation presents challenges, the potential benefits make this approach a worthwhile investment for airports pursuing strategic growth. Through sophisticated data analysis, airports can better understand market dynamics, positioning themselves for sustainable success in the competitive aviation industry.