Uncertainty Dynamics and Economics Modeling of the Air Transportation Supply Chain

An integrated three-component analytical process is developed in order to aid the understanding of aircraft demand dynamics and the effects of various sources of uncertainties. The first component is the prediction of global passenger travel demand through a gravity model formulation. The key predictors for travel demand used are population, gross domestic product and price levels at both origin and destination. The passenger travel demand segment is then matched up against the second component, an airline fleet management module. It tracks all major commercial aircraft deliveries made since 1980 to estimate the replacement schedule for aircraft currently in service and also to track the aircraft preferences of the world’s major airlines. The third component of the analysis is the aircraft manufacturer module, which provides the supply of aircraft to airlines and passengers worldwide. This manufacturer module is represented through a systems dynamics model of the various aircraft development processes.