Case 4 In this project, we needed to develop a model for forecasting weekly air passenger trac on major domestic routes for one of Australia’s leading airlines. The company required forecasts of...

Case 4

In this project, we needed to develop a model for forecasting weekly air passenger trac on major domestic routes for one of Australia’s leading airlines. The company required forecasts of passenger numbers for each major domestic route and for each class of passenger (economy class, business class and rst class). The company provided weekly trac data from the previous six years.

Air passenger numbers are aected by school holidays, major sporting events, advertising campaigns, competition behaviour, etc. School holidays often do not coincide in dierent Australian cities, and sporting events sometimes move from one city to another. During the period of the historical data, there was a major pilots’ strike during which there was no trac for several months. A new cut-price airline also launched and folded. Towards the end of the historical data, the airline had trialled a redistribution of some economy class seats to business class, and some business class seats to rst class. After several months, however, the seat classications reverted to the original distribution.