The charter market of the airline industry has progressively grown from an insignificant segment in international traffic to a relatively significant one during the last decade. What affect has the growth of the international charter market had on scheduled operations? The scheduled operators state that charters divert a substantial amount of passenger traffic away from them thereby jeopardizing their cross-subsidization system. On the other hand, charter operators claim that not only do they serve an entirely different market segment of demand for air travel thereby causing no diversion but that they in fact generate additional business for the airline industry as a whole. The purpose of this paper then, is to attempt to determine the impact, if any, that charter carriers may have on scheduled operations. A number of hypotheses were developed which, when investigated, would indicate whether or not charter flights divert passengers away from scheduled flights. Data to test these hypotheses were obtained from questionnaires distributed, during the summer of 1970, to trans-Atlantic passengers on charter and scheduled flights. The sample size consisted of 182 charter passengers and 100 scheduled passengers. The general conclusion was that charter and scheduled passengers have different demographic characteristics. This implies that charter carriers may serve a different market segment of demand for international air travel. However, when the charter passengers, notwithstanding their demographic characteristics, were asked if they would still take this trip to Europe, either now or in the near future, if they had to fly on a scheduled airliner and pay the regular fare, almost fifty percent responded in the affirmative. Therefore, it appears that, over the trans-Atlantic route, charter carriers divert a substantial amount of passenger traffic away from scheduled carriers. / Business, Sauder School of / Graduate

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Thesis (Ph.D)--Industrial and Systems Engineering, Georgia Institute of Technology, 2009. / Committee Co-Chair: George L. Nemhauser; Committee Co-Chair: Martin W. P. Savelsbergh; Committee Member: Bruce K. Sawhill; Committee Member: Joel Sokol; Committee Member: Ozlem Ergun. Part of the SMARTech Electronic Thesis and Dissertation Collection.

This thesis addresses two planning problems motivated by the operations of PSOD air transportation: scheduled maintenance planning, and base location and fleet allocation. In the first part of the thesis, we study tactical planning for scheduled maintenance which determines the daily maintenance capacities for two operating conditions: a growth phase and the steady state. We model tactical maintenance capacity planning during the growth phase as an integer program and develop an optimization-based local search to solve the problem. Tactical planning of steady state maintenance capacity concerns a special case for which we determine the optimal and the long run capacities with a pseudo-polynomial time algorithm. In the second part of the thesis, we address operational planning for scheduled maintenance which is concerned with assigning itineraries to jets and determining the specific jets to be scheduled for maintenance on a daily basis given a certain maintenance capacity. We present a solution methodology that employs a look-ahead approach to consider the impact of our current decisions on the future and decomposes the problem exploiting the differences between jets with respect to the proximity to their next maintenance. We further develop an integrated framework in order to capture the interaction between operational level maintenance decisions and flight scheduling. In the third and final part of the thesis, we present the tactical level base location and fleet allocation problem. As PSOD air transportation experiences changes in travel demand and fleet size, decisions regarding where to open new bases and how to allocate the number of jets among the bases are made. We first present a solution approach in which high level information about flight scheduling is used in a traditional facility location problem. We next develop a model that works directly with transportation requests and integrates a simplified version of flight scheduling with the base location and fleet allocation decisions in order to capture more detail.