OPTIMIZATION OF ROUTE NETWORK TO ENHANCE OPERATIONAL EFFICIENCY OF QAZAQ AIR

Abstract

Qazaq Air was launched in 2015 as a regional airline to support government’s task to enhance safety and accessibility of interregional air traffic aiming to boost economic development. Currently, the company is undergoing the transition from the stage of formation to the stage of active development. Although the company demonstrated a dynamic growth in recent years, they are in serious deficit in operational profit amounting to almost 7 billion KZT. Given that, Qazaq Air is seeking for new destinations to improve the operational profits and enhance flight operation. After careful analysis of the airline industry and the company’s operations, the practicum team applied several models for implementation to enhance the Qazaq Air performance. The pricing model theory was used for most profitable route monopolized by the company and the newsvendor model was used to improve the least profitable route. Moreover, based on the performance indicators derived from the data analysis a new route network is recommending subsidized routes.