Monte Carlo Simulation of Supply and Demand for Payload Limited Routes

Abstract

Large commercial aircraft by design are typically not capable of transporting maximum fuel capacity and maximum payload simultaneously. Beyond the maximum payload range, fuel requirements reduce payload capability. Varying environmental conditions further impact payload capability noticeably. An airline’s commercial department requires prior knowledge of any payload restrictions, to restrict booking levels accordingly. Current forecasting approaches use monthly average performance, at, typically, the 85% probability level, to determine such payload capability. Such an approach can be overly restrictive in an industry where yields are marginal, resulting in sellable seats remaining empty. Monte Carlo simulation principles were applied to model the variance in environmental conditions, as well as in the expected payload demand. The resulting forecasting model allows the risk of demand exceeding supply to be assessed continually. Payload restrictions can then be imposed accordingly, to reduce the risk of demand exceeding supply to a required risk level.