A Simulation of Optimal Model on Fractional Aircraft Ownership (FAO) Management

Abstract

Compared to owning a private jet, Fractional Aircraft Ownership (FAO) concept is a cheaper alternative for very mobile business persons who want to travel in comfort. The aircraft is owned by a number of customers (referred to as “owners”) and the flight hours of its operation are shared based on each owner’s portion. In this research, we do the simulation of an FAO company with very large demands with 27 cities of destination, which are commonly visited by business people in Indonesia. We derive flight demands stochastically from the owners and create optimal flying schedules based on the demands. Using the calculation of fixed and variable costs, we can determine the optimal flight pairings that minimized the operational cost. Eventually, we can determine the number of aircraft needed to be owned by FAO so the business will profit.

Keywords

• Optimization
• Investment
• Mathematical Modelling
• Flight Scheduling
• Aviation Industry,
• Stochastic Simulation