The ALIGATER Model Mark Hansen Adib Kanafani
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Hubbing and Rehubbing at JFK International Airport - The ALIGATERModel Mark Hansen Adib Kanafani Working Paper UCTC No. 408 3~ne University 9f CaIifornia Transportation Center Urdversity of California l~:erkeiey, CA94720 The University of Cal|fornia Transportation Center The Umversityof California Center activities. Researchers Transportation Center (UCTC) at other universities within the is one of ten regional units region also have opportunities mandated by Congress and to collaborate with UCfaculty established in Fall 1988to on selected studies. support research, education, and training in surface trans- UCTC’seducational and portation. The UCCenter research programsare focused serves federal RegionIX and on strategic plartrfing for is supported by matching improving metropolitan grants from the U.S. Depart- accessibility, with emphasis ment of Transportation, the on the special conditions in California Departmentof RegionIX. Particular attention Transportation (Caltrans), and is directed to strategies for the University. using transportation as an instrument of economic Based on the Berkeley development,while also ac- Campus, UCTCdraws upon commodatingto the region’s existing capabilities and persistent expansion and resourcesof the Institutes of while maintaining and enhanc- Transportation Studies at ing the quality of life there. Berkeley, Davis, Irvine, and Los Angeles;the Institute of TheCenter distributes reports Urban and Re~onaI Develop- on its research in working mentat Berkeley; and several papers, monographs,and in acaderrdc departmentsat the reprints of publishedarticles. Berkeley, Davis, Irvine, and It also publishes Access, a Los Angeles campuses. magazinepresenting sum- Faculty and students on other mariesof selected studies. For University of California a list of publicationsin print. campusesmay participate in write to the address below. UniversityofCalifornia TransportationCenter 108Naval Architecture Building Berkeley,California 94720 TeI: 510/643-7378 FAX:510/643-5456 Thecontents ofthis reign reflect theviews of the author who is responsible forthe facts and accuracy ofthe data presented herein. Thecontents donot necessarilyreflectthe official views orpolicies ofthe State ofCalifornia orthe UoS.Department of Traraportat/on. T/rdsreport does not constitutea standard, specification,or regulation. Hubbing and Rehubbing at JFK International Airport - The ALIGATORModel MarkHansen Adib Kanafani Institute of TransportationStudies University of California Berkeiey, CA 94720-1720 Working Paper December 1989 UCTC No. 408 The University of California Transportation Center University of California at Berkeley Table of Contents Table of Contents iii List of Exhibits iv Execrative Summary v Chapter 1 Introduction 1 1.1 The Problem 1 1.2 Project Scope 2 1.3 Overview of Work Performed 4 1.4 Report Organization 5 Chapter 2 The Model 6 2.1 Introduction 6 2.2 Relevance of Game Theory 6 2.3 Game Definition 7 2.4 Model !.imitations 12 25 The ALIGATER Software 14 Chapter 3 A Sample Application 16 3.1 Introduction 16 3.2 Overview of the Approach 16 3.3 Estabhshing the Baseline System 17 3.4 Assessment of Alternative Strategies 53 3.5 Other Applications 66 Chapter 4 Conclusions and Recommendations 72 4.1 Introduction 72 4.2 Conclusions of the Research 72 4.3 Recommendations 75 Appendix A ALIGATERII User’s Guide 78 Append/x B Estimation of Model Parameters 96 References 107 ®,o 111 List of Exhibits Exhibit 2-1. ALIGATERSoftware Architecture 15 Exhibit 3-1. Points Information File 18 Exhibit 3-2. Detailed Explanation of Sample Point Information File Records 19 Exhibit 3-3. Annotated ODParameter File 22 Exhibit 3-4. ODTable Extract 23 Exhibit 3-5. Detailed Explanations of Sample ODTable File Records 24 Exhibit 3-6. Airline Input file 25 Exhibit 3-7. Detailed Explanations of Airline File Records 26 Exhibit 3-8A. Schematic Route Maps of Pan AmAirlines - PANYC 28 Exhibit 3-8B. Schematic Route Maps of Pan AmAirlines - PALON 29 Exhibit 3-8C. Schematic Route Maps of Pan AmAirlines - PAFRA 30 Exhibit 3-8D. Schematic Route Maps of Pan AmAirlines - PANYL 31 Exhibit 3-8E. Schematic Route Maps of Pan AmAJxlLnes -PANYF 32 Exhibit 3-9. Aircraft File 33 Exhibit 3-10. Detailed Descriptions of SampleAircraft File Records 34 Exhibit 3-11. Supply Input File 36 Exhibit 3-12. Detailed Explanations of Sample Supply Input File Records 37 Exh/bit 3-13. Parameter File with Annotations 39 Exhibit 3-14. Portion of Change Report 42 Exhibit 3-15. Detailed Explanation of Change Report Records 43 Exhibit 3-16. Portion of OD Report 44 Exhibit 3-17. Detailed Description of ODReport Records 45 Exhibit 3-18. Airline File 46 Exhibit 3-19. Detaited Explanations of Sample Airline Report Records 47 Exhibit 3-20oFinance Report 49 Exh/bit 3-21. Detailed Explanation of Airline Financial Report Records 52 Exhibit 3-22. Scenario Summary,Input File Changes 56 Exhibit 3-23. Scenario Summary, Pan AmSystem Performance 57 Exhibit 3-24. Scenario Summary, NewYork Gateway Operations 58 Exhibit 3-25. Annotated Terminal Cost File 63 Executive Summary This research, sponsored by the Port Authority of NewYork and NewJersey, involved the development and application of a model of International Gateway Competition, to be used for purposes of airport demandforecasting and airline strategy assessment. The model, named ALIGATER(AirLine International Gateway Traffic Estimator) simulates and finds Nash equilibrium states for competition between a set profit maximizingairlines. Inputs to the modelinclude airline characteristics, including networktype, gatewaylocation, strength of feed to gateways, and aircraft characteristics; passenger demandand fare levels betweeninternational origins and destinations; and the specification for a logit model of airline market share. These inputs define the profit functions of the individual airlines. In the simulation, the profit maximizingset of transcontinental service frequencies are found for each airline in succession, until the system converges to an approximate equilibrium state. The modelwas applied to the transatlantic route network. A system consisting of 21 airlines, 30 U.S. origins, and 20 European destinations was defined. Aircraft chara~Xeristics were determinedfrom analyses based on the Official Airline Guide flight schedules, as well as cost and performance data compiled from a variety of public sources. Origin-destination traffic was obtained from Boeing ComputerServices, and fare estimates based on yields for U.S. airlines transatlantic services. Thesimulations focussed on possible strategies for Pan Am~and indicated that strengthened feed into NewYork could significantly improve its profitability. Establishment of a new gateway in WashJxtgtonis also found to enhancePan Am’sprofitability. However,the impacts of this measureon the NewYork Gateway’stransatlantic traffic wouldbe slight. In general, the results suggest that NewYork is well positioned to retain its dominant role as a transatlantic gateway. ALIGATERis suitable for many other applications, including studies of the impact of marketing agreements, airport capacity constraints, and various regulatory reforms. However, the model simpIifies manyaspects of airline competition, and must therefore be used with care if it is to field credible results. Further research, particularly in the areas of demandresponse, airline pricing, and air passenger route choice would yield a substantially improved model V Chapter1 Introduction 1.1 The Problem Todaymore than ever, major airports must contend with significant uncertainties as they endeavor to shape and fulfill their national and regional roles. On the one hand, continued growth in air traffic has created a widespread need for additional facilities and the careful allocation of pre-existing ones. On the other hand, increased competition and other structural changes in the system and the wider economyhave openedthe possibility for traffic shifts betweenairports of an unprecedentedscale. To cope with this new environment effectively, airport planners and managers must understandthe processes that determine airport traffic levels at a greater level of detail than :has heretofore been necessary. These needs are particularly pressing for established and potential international gatewaysin the U.S. In earlier times, the set of gatewayswas small and stable, and their hinterlands well-defined. Since the mid-1970s,the numberof airports with direct service to overseas points in Asia and Europe has stea~y increased. Furthermore, the U.S. flag airlines providing international service usually do so frompoints whichalso serve as their major connecting hubs. Consequently, the new international gateways not only reduce the pool of passengers who must rely on some form of connecting service for international journeys, but also offer strong competition for the pool that remains. Theinternational situation is madestill morecomplex as a result of technological developments.Twin-jets, such as the Boeing 767 and Airbus 300 series, offer sufficient range and engine reliability to serve trans-oceanic markets, and have cost characteristics that makesuch service commerciallyviable. The availability of these smaller (relative to the 747) aircraft, enables airlines to support international service with lower passenger volumes, raising prospects for still more U.S. airports becoming gateways, and the initiation of services to additional overseas points, over the next several years. The uncertainty deriving from these trends complicates the planning problems faced