Hello everybody!
Today in this post, we will examine the route between Toulouse and Madrid; and we will be had information about these two cities, two airports and also their countries as well. After finding which airline is serving for this cities, we will make some calculation about the route capacity and route traffic. The last step will be calculating ancillary revenue for a specific airline and making some assumptions.
ECONOMIC SITUATION
Firstly, it will be started with Toulouse. Toulouse is a city in France with a population of 453,317. Main industries that support the economies of Toulouse are aviation, aeronautics, electronics, information technology and biotechnology. Also it is the city that home for Airbus which is one of the major aircraft manufacturers. One of the valuable measurement of the economics is finding the GDP per capita for a country.
It can be calculated as: GDP of the country / Population of the country
When it is looked at the France's economy, GDP per capita for France is 35,669.59 US Dollars (32,831.03 EUR),(2014).
Secondly, it is continued with Madrid. It is city of Spain with a population of 3,300,000 which focuses on aviation, tourism, finance, agriculture and information technology industries. GDP per capita for Spain is 25,617.55 US Dollars (23,574.02 EUR
TOURISM SECTOR
Both two cities has a potential of touristic attraction for all around the world. To illustrate for Toulouse, there are such places as Basilique Saint-Sernin, Couvent des Jacobins, Place du Capitole, Fine Arts Museum, Fondation Bemberg, Musee Saint Raymond, Cathedrale Saint Ethienne, Les Abottoirs, Musee Paul Dupuy and Chapelle des Carmelites. They all get attention from tourists. 
When it is looked for Madrid, Museo Reina Sofia, Mercado de San Miguel, Temple of Debod, Plaza de Cibeles, Puerta del Sol, Granvia and Retiro Park are some of the most beatiful touristic areas. Madrid has a enormous contribution for the economy of Spain in terms of tourism sector. AIRPORTS
In this part, Blagnac International Airport in Toulouse and Adolfo Suarez Barajas International Airport in Madrid will be examined.
IATA Code for Blagnac Airport is TLS, for Barajas Airport is MAD. ICAO Code for Blagnac Airport is LFBO and for Barajas Airport is LEMD.
During 2014, TLS has 7,517,736 passengers and MAD has 41,833,372 passengers in total which is summation of international and domestic. Calculating Total Air Passenger Per Capita is a great sign for potential of city. It is made by Air Passenger in City is divided by population of the city.
Total air pax per capita for Toulouse : 7517736/453317 = 16.58
Total air pax per capita for Madrid: 41833374/3300000 = 12.67
In order to interpret these numbers, we have to consider all possibilities. Because there are two variables in this formula we can examine the lower total air pax per capita in a way that; in Toulouse, population number is not too high. Due to there is less people is living in Toulouse than Madrid, is creating a difference. Also in another way, due to Madrid is the capital of Spain, even though population of Madrid is high, air traffic has very density in terms of air passenger. Big amount of population and big amount of air passenger can create lower percentage for air passenger per capita but it does not represent that Toulouse is more developed than Madrid in terms of air passenger. However, it can be represented as lower number can be mean higher potential for development.
DIRECT FLIGHTS
When it is looked for direct flights between two cities, we can see one airline which is Air Nostrum regional franchisee of IBERIA since 1997. It is a member of Oneworld Airline Alliance. It operates 91 domestic and international routes to 51 destinations as a charter flights. Its base is Valencia Airport with hubs at Barajas and Barcelona Airports.
ROUTE CAPACITY AND ROUTE TRAFFIC
In order to make analysis of data, we have time limit between 18 Jan - 25 Jan as a whole week. Data include airline name, flight number and aircraft type in the route from TLS to MAD. Making calculations, we will assume that all flights have return flights from MAD to TLS to.
18 JAN
1) IBERIA – FLIGHT 8765 – BOMBARDIER CRJ900
2) IBERIA – FLIGHT 8775 - BOMBARDIER CRJ900
3) IBERIA – FLIGHT 8767 - BOMBARDIER CRJ900
4) IBERIA – FLIGHT 8771 - BOMBARDIER CRJ900
5) IBERIA – FLIGHT 8761 - BOMBARDIER CRJ900
19 JAN
1) IBERIA – FLIGHT 8765 - Bombardier CRJ1000
2) IBERIA – FLIGHT 8775 - Bombardier CRJ1000
3) IBERIA – FLIGHT 8767 - Bombardier CRJ1000
4) IBERIA – FLIGHT 8769 - Bombardier CRJ1000
5) IBERIA – FLIGHT 8771 - Bombardier CRJ1000
6) IBERIA – FLIGHT 8761 - Bombardier CRJ1000
20 JAN
1) IBERIA – FLIGHT 8765 - Bombardier CRJ900
2) IBERIA – FLIGHT 8775 - Bombardier CRJ900
3) IBERIA – FLIGHT 8767 - Bombardier CRJ900
4) IBERIA – FLIGHT 8769 - Bombardier CRJ900
5) IBERIA – FLIGHT 8771 - Bombardier CRJ900
6) IBERIA – FLIGHT 8761 - Bombardier CRJ900
21 JAN
1) IBERIA – FLIGHT 8765 - Bombardier CRJ900
2) IBERIA – FLIGHT 8775 - Bombardier CRJ900
3) IBERIA – FLIGHT 8767 - Bombardier CRJ900
4) IBERIA – FLIGHT 8771 - Bombardier CRJ900
5) IBERIA – FLIGHT 8761 - Bombardier CRJ900
22 JAN
1) IBERIA – FLIGHT 8765 - Bombardier CRJ900
2) IBERIA – FLIGHT 8775 - Bombardier CRJ900
3) IBERIA – FLIGHT 8767 - Bombardier CRJ900
4) IBERIA – FLIGHT 8771 - Bombardier CRJ900
5) IBERIA – FLIGHT 8761 - Bombardier CRJ900
23 JAN
1) IBERIA – FLIGHT 8765 - Bombardier CRJ900
2) IBERIA – FLIGHT 8775 – Bombardier CRJ900
3) IBERIA – FLIGHT 8771 – Bombardier CRJ900
24 JAN
1) IBERIA – FLIGHT 8775 – Bombardier CRJ1000
2) IBERIA – FLIGHT 8761 - Bombardier CRJ1000
According to these data, there are 5,6,6,5,5,3,2 flights on Mon, Tue, Wed, Thu, Fri, Sat, Sun respectively.For Bombardier CRJ 1000, it has 100 standart seats. For Bombardier CRJ 900, it has 90 standart seats. In order to make calculations, the formulas can be used below.
AS From TLS to MAD
- 18 JAN – 5 FLIGHT – 90 SEAT
AS = 90 per flight ; 90x5= 450 AS for Monday
- 19 JAN – 6 FLIGHT – 100 SEAT
AS= 100 PER FLIGHT ; 100X6= 600 for Tuesday
- 20 JAN – 6 FLIGHT – 90 SEAT
AS= 90 PER FLIGHT ; 90X6= 540 for Wednesday
- 21 JAN – 5 FLIGHT – 90 SEAT
AS= 90 PER FLIGHT ; 90X5= 450 for Thursday
- 22 JAN - 5 FLIGHT – 90 SEAT
AS= 90 PER FLIGHT ; 90X5= 450 for Friday
- 23 JAN – 3 FLIGHT – 90 SEAT
AS= 90 PER FLIGHT ; 90X3= 270 for Saturday
- 24 JAN – 2 FLIGHT – 100 SEAT
AS= 100 PER FLIGHT ; 100x2= 200 for Sunday
As we can see the total AS for 1 route from TLS to MAD is summation of 450, 600, 540, 450, 450, 270, 200 which equals to 2960. If we can assume all flights have a return from MAD to TLS, it means we have 2960x2 AS on this route between TLS and MAD which is 5920. The flying distance km for the route is 537 km. Therefore; ASK can be found as 2960 x 537 = 1,589,520 for the route from TLS to MAD. And it can be found for the whole route as 5920 x 537 x 2 = 6,358,080
For estimating LF for this route, it is needed some information. According to IATA’s report, global passenger load factor in August is %84.7. Therefore, this number will be use in out calculations as a load factor. RP is number of pax paying for the ticket. If load factor is %84.7, and we have 2 types of a/c.
For 100 seat, we have 85 pax and for 90 seat, we have 76 pax. For 2960 seat from TLS to MAD, we have 2507 pax. RP=2960 x 0.847 = 2507. For the route –taking into account return- RP= 5920 x 0.847 = 5014. Also we need to find RPK which is calculating for
TLS to MAD = 2507 x 537 = 1,346,259.
For the flights both Departure and Return Route: RPK=5014 x 537 = 2,692,518
ANCILLARY REVENUE
After finishing all these calculations for route capacity and traffic, it is time to focus on revenue part. Average ticket price between 18Jan and 25Jan is 660EUR. Revenue is calculated as 5014 x 660 = 3,309,240EUR for the all departure-return flights for a whole week. Ancillary revenue is 5% for the revenue of full service airlines; therefore, it can be calculated as 3,309,240 x 0.05 = 165,462EUR. Average industry profit margin is 3.2% and it must be 3 times for Air Nostrum. Hence, 3,309,240 x 0.092 = 304,450.08 EUR is profit for our airline. CONCLUSION
When all analyses is done, it can be seen clearly that 2 cities is related with aviation sector and this route is used by business people mostly. We can refer it from the weekdays flight density and minority of weekend flight frequency. In my opinion, serving with newer and bigger aircraft might not be efficient because it there is huge amount of demand, only Air Nostrum did not fly between these 2 cities. Therefore, if it is wanted to planned new flight with bigger aircraft it should be weekdays in the earlier morning hours. However, it might be caused disappointed due to expectation would not be high for this route according to data.
