An Approach to Predict Impact of Demand Acceptance on Air Taxi Operations

Abstract

The notion of an on-demand air transportation service, or air taxi, is of much current interest. For an air taxi service to succeed, it must set the ticket price high enough to cover operating expenses and low enough to attract a significant number of passengers. Keeping operation costs low will be a crucial contributor to the potential success of an air taxi service. An on-demand air taxi may not have a pre-determined route structure; passengers may request to be picked up at an airport nearest their trip origin and flown to an airport nearest their final destination. If the air taxi service does not station aircraft at a passenger’s origin airport or if other customers do not request revenue service that ends at another passenger’s origin, then the air taxi must perform a non-revenue, repositioning flight to pick up the passenger. Meeting all requested passenger-demanded trips may be an important aspect of an air taxi’s business model to foster repeat customers; however, meeting all passengerdemanded trips may require a prohibitively expensive number of non-revenue, repositioning flights and large number of aircraft. Using Integer Programming assignment problems to determine trips that a notional air taxi service must fly, this paper evaluates the impact of accepting different percentages of passenger-demanded trips and number of owned aircraft on the potential profitability of the air taxi service.