Airline Flight Network Expansion with Strategic Aircraft Leasing Decisions

Safak Aydiner, O., Akturk, D., Atamtürk, A., & Aktürk, M. S. (2025, July 14–16). Airline flight network expansion with strategic aircraft leasing decisions [Paper presentation]. INFORMS Revenue Management and Pricing Section Conference, New York, NY, United States. https://researchportal.bath.ac.uk/en/publications/airline-flight-network-expansion-with-strategic-aircraft-leasing-/

The ability to match fleet capacity with growing passenger demand is crucial for airline profitability. This work develops a mathematical model that enables airlines to determine the optimal number of leased aircraft while simultaneously building a schedule with new market routes, allowing a reliable estimate of operational costs and revenue. Since fuel and carbon emissions costs are the largest components of operational costs, this work integrates strategic aircraft leasing decisions with operational aircraft assignment considerations. Consequently, we account for not only the seat capacity of the aircraft alternatives to meet new demand but also the fuel efficiency of the aircraft, along with time-dependent ticket prices and market demand for new flights as a function of flight departure times.