Modelling strategy of airline tankering with nonlinear programming and an application

The level of profitability of airline companies is lower than that of many businesses. One the ways to increase the level of profitability is to reduce costs. This thesis aims to reduce the fuel costs, which constitute the largest share of total cost that airline companies have, with extra fuel transportation. A nonlinear programming model has been developed for tankering application that takes advantage of the different fuel prices at the airports. General Reduced Gradient Method (GRG) is used to solve the generated nonlinear programming problem. MS EXCEL solver add-in is used to solve the problem. In the application part of thesis, two application has been studied on and one of them is parametrical and other assumes İstanbul as an hub airport in order to analyze the effect of flight distance, load rate, fuel price difference between the airports and altitude of cruise flight on tankering and cost. It has been observed that the fuel cost can be saved when tankering is applied to flight distances of 1300nm and less. Although the load rate is high and the fuel price difference is low, flights have been conducted between the centers which have short flight distances, the model allowed to tanker. It was observed that when the amount of fuel recommended by the problem result was taken for the designed scenarios, the fuel consumption increased by 2.5-3% compared to the trips without tankering. Despite the increase in fuel consumption, it has been found that a total fuel cost can be saved of 1% to 47% for round trips.