Analysis of the Cargo Service Dynamics in East Asian Airports

Purpose – Virgin Atlantic Cargo is one of the largest air freight operators in the world. As part of a wider strategic development initiative, the company has identified forecasting accuracy as of strategic importance to its operational efficiency. This is because accurate forecast enables the company to have the right resources available at the right place and time. The purpose of this paper is to undertake an evaluation of current month-to-date forecasting utilized by Virgin Atlantic Cargo. The study employed demand patterns drawn from historical data on chargeable weight over a seven-year-period covering six of the company's routes. Design/methodology/approach – A case study is carried out, where a comparison between forecasting models is undertaken using error accuracy measures. Data in the form of historical chargeable weight over a seven-year-period covering six of the company's most profitable routes are employed in the study. For propriety and privacy reasons, data provided by the company have been sanitized. Findings – Preliminary analysis of the time series shows that the air cargo chargeable weight could be difficult to forecast due to demand fluctuations which appear extremely sensitive to external market and economic factors. Originality/value – The study contributes to existing literature on air cargo forecasting and is therefore of interest to scholars examining the problems of overbooking. Overbooking which is employed by air cargo operators to hedge against “no-show” bookings. However, the inability of air cargo operators to accurately predict cargo capacity unlikely to be used implies that operators are unable to establish with an aspect of certainty their revenue streams. The research methodology adopted is also predominantly discursive in that it employs a synthesis of existing forecasting literature and real-life data for accuracy analysis.

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Modeling overbookings on air cargo transportation

Singhaseni

Ojiako

2013

International Journal of Physical Distribution &Amp; Logistics Management

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PurposeIn order to hedge against fluctuation in actual “show” for air freight services, cargo airlines engage in the allocation of more space capacity than they actually have. This practice can lead to overbooking of capacity which can incur costs to the airline when a cargo does show that is larger than predicted. In this study, the authors set out to model an optimised value for air cargo booking which is tested against five different cargo case‐representative scenarios. The paper aims to discuss these issues.Design/methodology/approachThe methodology which is primarily discursive utilises a synthesis of existing literature to develop a model to replicate the overbooking problem.FindingsThis paper finds that the optimised value of cargo size may not necessarily depend on the probability of actual “show”. Instead, this variation appears dependent on a random demand for larger sized cargo, and thus, price.Practical implicationsThe model which is developed serves as a potential framework for airlines to avoid uncertainty associated with cargo capacity spoilage and overbooking.Originality/valueIn this study, the passenger overbooking model under the cancellation and no‐show problems in the static single leg case was adapted for use during the modelling of air cargo overbooking.

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Analysis of the Cargo Service Dynamics in East Asian Airports

Cited by 3 publications

References 19 publications

Formation Flight Mechanics and its Integrated Logistics

Formation Flight Mechanics and its Integrated Logistics

Evaluation of forecasting models for air cargo

Modeling overbookings on air cargo transportation

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