Network Planning

L.E.K.’s approach to network planning combines the analytical tools and strategic insight necessary to optimize our clients’ operational efficiency and business performance. Our involvement in network planning stems not just from single carrier engagements, but also from some of the industry’s most successful mergers and joint ventures.

Our experienced consultants utilize a range of powerful proprietary analytical tools to examine your network and enhance connectivity across your existing routes, while uncovering valuable opportunities to add or adjust scheduled flights. This process ensures that our recommendations are based on rigorous analysis, so that our clients can make the best decisions and achieve optimal outcomes.

Airline network planning suite

We take a holistic approach to network planning, optimizing not just your route schedule, but your entire strategic outlook.

• Elasticity and passenger demand model: Starting with an industry-standard O-D demand forecast, we layer in proprietary enhancements and potential LCC stimulation to ensure the most robust market demand forecast.
   
• L.E.K. CompetiShare QSI model: For tactical and strategic initiatives, we utilize our proprietary CompetiShare modified QSI model to project potential market share impact of each move.

• Schedule development: We work with our clients to determine their network strategy and goals, and jointly create a network priority hierarchy. We then deploy our demand-matching and connectivity-checking tools to structure the revenue and profit-maximizing network schedule.

• Route profitability analysis: We estimate future route contribution and profitability by estimating RASM and measuring contribution after variable, fleet and fixed costs. Our proven cost allocation model ensures the correct profit-maximizing route entry/adjustment strategy will be selected.

Airline network planning successes

• Network Growth Strategy: For a U.S. value carrier, L.E.K. performed a network analysis to identify a set of explanatory variables that determine success of its current routes. For example, we found that connectivity is a less influential variable than it is for other carriers. On this basis, we performed a point-to-point analysis – incorporating elasticity considerations – to develop an organic network growth strategy resulting in a 5% annual profitable ASM growth (versus the market declining at 1%).

• Network Synergy Assessment: L.E.K. assisted a carrier in assessing consolidation scenarios, with a focus on comparing network synergies between the carrier and various merger candidates. Our tools produced synergy assessments on the basis of route presence, connectivity, convenience and other client-specific proprietary factors.
   
• Joint Venture Analysis: For a carrier considering the formation of a joint venture, L.E.K. created a network plan that allocated routes between carriers to ensure joint optimization of network and slots. Beyond core network analytics, this planning process was governed by strategic principles such as single operator per market and pooling of slot portfolios in order to maximize value of the joint venture.
   
• LCC Startup: L.E.K. developed the initial route structure and five year route development plan for a highly successful European LCC using our proprietary route planning tools.