ABSTRACT

This chapter addresses the fundamentals of market modelling as applied to aircraft decision-making. An important part of a market evaluation is to understand the behaviour of airline customers and a good technique is to segment the market and use spill modelling to help us determine the right level of capacity to offer. The chapter covers the basics of productivity measurement. In order to facilitate a comparison between different types of market model, the chapter examines Air Ballistic's route network. The chapter also examines two different, yet complementary, approaches to the modelling of demand: the macro and micro approaches. It also addresses market segmentation and its link to the all-important concept of spill, which is defined as an excess of average demand over capacity. The chapter looks at a modelling approach appropriate for a single sector, then expand this into a more complex micro-network model. It explains some specific and independent techniques for assessing market share.