DPRM END TERM PROJECT
GROUP 11
Network Revenue Management
GUIDED BY: Amit Sachan
SUBMITTED BY:
Hemlata Choudhary – M021-18
Deepanshu Purwar – M081-18
Nitin Kapoor – M100-18
Soumen Mukherjee – M116-18
 UDAN Scheme
• UDAN-RCS, UDAN (Ude Desh ka Aam Naagrik) is a regional airport development and "Regional
Connectivity Scheme" (RCS) of Government of India.
• The objective is of "letting the common citizen of the country fly", aimed at making air travel
affordable and widespread, to boost inclusive national economic development, job growth and air
transport infrastructure development of all regions and states of India.
• The scheme has two components. The first component is to develop new airports and enhance the
existing regional airports to increase the number of operational airports for scheduled civilian
flights
• The second component is to add several hundred financially-viable, capped-airfare, new regional
flight routes to connect more than 100 underserved and unserved airports in smaller towns with
each other as well as with well served airports in bigger cities.
Salt Jet

• Salt Jet is a local liner which bid for routes as a part of Udaan scheme.
• Salt Jet announced that it has launched 14 new flights under the government's UDAN scheme,
connecting the "un-served" market of Jaisalmer and the "underserved" markets of Udaipur,
Dehradun and Jaipur to key metros and cities across the country.
• Salt Jet said it is further enhancing its domestic footprint with addition of new flights.
• Salt Jet now operates a total of 37 flights connecting 21 cities under UDAN, the airline said.
Fleet Description
Bombardier Dash 8 – current fleet
• The De Havilland Canada DHC-8, commonly known as
the Dash 8, is a series of turboprop-powered regional
airliners.
• The Series 400 introduced an even longer airframe that
was stretched 6.83 metres, has a larger, stouter T-tail and
has a passenger capacity of 68–90.
• The aircraft has a cruise speed of 360 knots (667 km/h),
which is 60–90 knots (111–166 km/h) higher than its
predecessors.
Airbus A319 – fleet expansion strategy
• The Airbus A319 is a member of the Airbus A320
family of short- to medium-range, narrow-body,
commercial passenger twin-engine jet
airliners manufactured by Airbus.
• The A319 carries 124 to 156 passengers and has a
maximum range of 3,700 nmi (6,900 km; 4,300 mi).
• The aircraft shares a common type rating with all other
Airbus A320 family variants, allowing existing A320 family
pilots to fly the aircraft.
Description of the routes
• Salt Jet has two Bombardier Dash 8 airplanes, one based in Udaipur and the other in Jaisalmer. Both airplanes have a
coach section with a 9-seat capacity.
• Each morning the Udaipur-based plane flies to Dehradun with a stopover in Jaipur, and the Jaisalmer-based plane flies to
Varanasi, also with a stopover in Jaipur.
• At the end of the day, both planes return to their home bases.
• To keep the size of the problem reasonable, we restrict our attention to the Udaipur-Jaipur, Jaipur-Dehradun, Jaisalmer-
Jaipur, and Jaipur-Varanasi Beach flight legs for the morning flights.
Figure below illustrates the logistics of the Salt Jet problem situation -
Description of fare class and fare chart

• Salt Jet uses two fare classes: a discount-fare Q class and

a full-fare Y class.

• Reservations using the discount-fare Q class must be

made 30 days in advance.

• Reservations using the full-fare Y class may be made

anytime, with no penalty for changing the reservation at
a later date. To determine the itinerary and fare
alternatives that Salt Jet can offer its customers, we must
consider not only the origin and the destination of each
flight, but also the fare class.

• For instance, possible products include Udaipur to Jaipur

using Q class, Jaisalmer to Jaipur using Q class, Jaipur to
Varanasi using Y class, and so on. Each product is referred
to as an origin-destination-itinerary fare (ODF). Salt Jet
established fares and developed forecasts of customer
demand for each of 16 ODIFs.
Scenarios
Ms. Hem Lotta, CEO Salt Jet, wants to ascertain the right seat allocation across the OFIDs to maximize its revenue. So,
they hired a team of consultant who have Operations major from IIM Ranchi to give a solution.

Scenario 1
Ms. Hem Lotta, CEO Salt Jet, wants to know the allocation of OFIDs, with regard to 90-seater Dash 8, Q 400.
Number of Planes in Fleet = 2, Seating Capacity 90
To develop a linear programming model that can be used to determine how many seats Leisure Air should allocate
to each fare class, we need to define 16 decision variables, one for each origin-destination-itinerary fare alternative
Using J for Jaipur, U for Udaipur, Ja for Jaisalmer, V for Varanasi, and D for Dehradun, the decision variables take the
following form:
Scenarios
Scenario 1 (continued….)

The objective is to maximize total revenue.

we can, write the objective function for the linear programming model as follows:
Max(2778*UJQ+6749*UDQ+5639*UVQ+6852*UJY+12937*UDY+123937*UVY+2908*JaJQ+6879*JaDQ+5769*JaVQ+5858
*JaJY+11943*JaDY+11404*JaVY+3971*JDQ+2861*JVQ+ 6085*JDY+5546*JVY)
Next, we must write the constraints. We need two types of constraints: capacity and demand

The number of seats allocated to the Udaipur – Jaipur flight leg is UJQ+UDQ+UVQ+UJY+UDY+UVY. With the capacity of
90 seats, the capacity constraint is as follows:
UJQ+UDQ+UVQ+UJY+UDY+UVY =< 90 Udaipur - Jaipur
JaJQ+JaDQ+JaVQ+JaJY+JaDY+JaVY =< 90 Jaiselmer – Jaipur
UDQ+UDY+JaDQ+JaDY+JDQ+JDY=< 90 Jaipur - Dehradun
UVQ+UVY+JaVQ+JaVY+JVQ+JVY<=90 Jaipur - Varanasi
Scenarios
Scenario 1 (continued….)

The demand constraints limit the number of seats for each ODIF based on the forecasted demand. The first four demand constraints
are as follows:
 UJQ <= 33 Udaipur - Jaipur Q class JaJY <= 15
UDQ <= 44 Udaipur Dehradun Q class JaDY <= 7
UVQ <= 45 Udaipur Varanasi Q class JaVY <= 9
UJY <= 16 Udaipur Jaipur Y class JDQ <= 64
UDY <= 6 JVQ <= 8
UVY <= 11 JDY <= 46
JaJQ <= 26 JVY <= 10
JaDQ <= 56 UJQ,UDQ,UVQ,UJY,UDY,UVY,JaJQ,JaDQ,JaVQ,JaJY,JaDY,JaVY,JDQ,JVQ,JDY
,JVY>=0
JaVQ <= 39

The value of the optimal solution is $ 1557788.

The optimal solution shows that UJQ = 33, UDQ = 44, UVQ = 45, UJY = 16 and so on.
Thus, to maximize revenue, Salt Jet should allocate 33 Q class seats to Udaipur Jaipur,
44 Q class seats to Udaipur Dehradun,
45 Q class seats to Udaipur Varanasi,
16 Y class seats to Udaipur Jaipur, and so on.