Towards Sustainable and Passenger-Centric Airline Networks

Abstract

The aviation industry is undergoing rapid expansion, with an annual growth rate of 4.5% to 5%, positioning it as the fastest-growing mode of transportation worldwide. This growth, however, comes with significant environmental challenges, primarily due to the industry’s substantial contribution to greenhouse gas emissions. Currently, aviation accounts for 2.4% of global CO₂ emissions and 3% of the European Union’s total greenhouse emissions. If current trends persist, these figures are expected to rise dramatically, intensifying the urgency for the industry to align with international climate agreements, such as the United Nations Framework Convention on Climate Change (UNFCCC), by adopting eco-conscious strategies to reduce both CO₂ and non-CO₂ emissions. One way to achieve this is by reconsidering their airline networks. Airlines have traditionally focused on a cost-driven approach when optimizing their network structures, often sidelining environmental impacts. This approach, primarily motivated by market demand and operating costs, seeks to develop a network that minimizes expenses while maximizing profitability. However, with increasing awareness of the aviation industry’s significant contribution to climate change, it has become essential to consider whether airlines can achieve both cost-efficiency and environmental sustainability through strategic changes to their network design. As the aviation industry evolves, so do the expectations of its customers. In this service-oriented business, delivering high-quality service is a core competitive advantage. This advantage is closely linked to how well airlines listen to and act on customer feedback, particularly by integrating this to early stages of their operational decisions. Understanding passenger needs and expectations is crucial, as decisions made without considering these factors can reduce customer satisfaction. For instance, optimizing a network solely based on cost and climate impact might lead to less convenient flight schedules or routes, which could alienate passengers who prioritize certain departure times or direct routes.
Given these complexities, it is clear that airline network design must go beyond just cost and environ- mental considerations. Integrating the passenger perspective is crucial for developing a network that meets both operational goals and customer satisfaction. This leads to the need for a more holistic modeling approach that combines three key objectives: minimizing costs, reducing environmental impact, and accommodating passenger preferences. The proposed modeling approach in this research aims to address this challenge by developing an optimization model that integrates the economic goal of cost minimization with the environmental objective of reducing CO₂ emissions and the service-oriented goal of satisfying passenger preferences, particularly in terms of departure times. To support the development of this comprehensive optimization model, a thorough literature review was conducted to identify the specific criteria necessary for integrating environmental considerations and passenger preferences into airline network design. This review focused on understanding the environmental impacts of aviation, particularly CO₂ emissions, and the various strategies airlines can adopt to mitigate these effects. Additionally, it explored the importance of passenger preferences, with a particular emphasis on departure times, as a critical factor that can influence network design. Following the literature review, existing hub location models were analyzed to assess their applicability in this context. While traditional models are effective for optimizing cost-driven networks, they often fall short in addressing the additional layers of complexity introduced by environmental and passenger considerations. The research identified specific needs arising from these considerations, such as the need to account for CO₂ emissions linked to flight frequency and the importance of aligning flight schedules with passenger preferences. To address these gaps, the models were adapted and extended, incorporating these new objectives to create a more holistic approach to airline network design. The developed model was then tested using the well-known CAB dataset, a benchmark in hub location research. The testing phase included both single-objective optimization, where each of the three objectives (cost, environment, and passenger preferences) was optimized individually, and multi-objective optimization, where the model sought to balance all three objectives simultaneously. This approach allowed for a comprehensive evaluation of the model’s effectiveness in producing network designs that meet the diverse needs of airlines in today’s complex operational environment. This research provides a significant contribution to the field of airline network design by introducing an optimization model that harmonizes the often conflicting goals of economic efficiency, environmental sustainability, and passenger satisfaction. Through an integrative approach that accounts for the complexities of modern airline operations, this study advances the understanding of how these diverse objectives can be balanced within a single framework. The proposed model, tested using an established dataset, demonstrates its potential to influence both academic discourse and practical applications by offering a more nuanced understanding of the trade-offs inherent in network design. Moreover, this work highlights the broader social and scientific relevance of incorporating environmental and passenger-centric considerations into strategic planning, urging a shift towards more sustainable and responsive practices in the aviation industry.