Airline OR Innovations Soar During COVID-19 Recovery

Abstract

The Airline Group of the International Federation of Operational Research Societies (AGIFORS) held four conferences during May to July 2021 that focused on how COVID-19 was impacting and reshaping the airline industry. Dozens of airline representatives from around the world spoke about how fundamental changes in passenger demand and booking patterns are reshaping the airline industry and driving innovation and research needs. Customers are booking much closer to departure and are canceling or exchanging their tickets more frequently than before COVID-19. Volatility in demand has increased as travel restrictions change and borders reopen. Consequently, greater uncertainty in demand forecasts used as inputs to optimization algorithms is motivating the need for new approaches. Revenue management and scheduling departments are innovating how they predict market sizes and exploring ways to use new data sources or historic bookings in forecasting models. Scheduling and operations departments are making many more flight-cancellation and equipment-swap decisions one to three days from flight departure, which is changing the role of recovery planning. New urgency exists within crew to design duties and rosters that are robust to ever-evolving schedules. Across functional areas, the increasing emphasis is to develop integrated solutions that jointly optimize schedules, crew pairings, and crew rosters for demand forecasts that are uncertain at the time rosters are published. This paper describes how these changes are reshaping the airline industry during COVID-19, explains why short lead times for bookings and uncertainty in demand volumes are expected to remain after COVID-19, and describes how the airline industry is innovating and developing new operations research approaches for handling uncertain and volatile demand.