Economical Efficiency Analysis for the Alternative Strategy of Regional Jets Based on System Dynamics

With the development of urbanization in China, the demands of air travel increase rapidly in the western regions and third-tier and fourth-tier cities. Airlines usually use 150-180 seats mainline jets to meet such demands, but either economic efficiency of airlines or service level of customer is not high because of low passenger load factor and insufficient flight frequency. To solve the contradiction between supply and demand, the alternative strategy of using domestic regional jet to replace the mainline jet with low economical efficiency is proposed. However, the airlines still hesitate to take such strategy because of no quantitative measurement on its efficiency. To solve these problems, a system dynamic model of alternative strategy is established hereto and validated by comparing simulation results with practical data from one typical airline. Then the sequent oscillation characteristics of stochastic customer behavior, different ownership mode and key cost drivers are analyzed. Based on these principles, it is concluded that suitable scope of the alternative strategy and cost reduction measures should be performed to promote the economical efficiency of regional jets.