Managing Unforecastable Airline Demand
Consumer product companies, like airlines, regularly develop demand forecasts for thousands of products. Retailers, for example, must forecast not just how many men’s shirts will be purchased but what styles, colors, and sizes, and at which locations. In the case of airlines, we not only forecast demand for each of a thousand or so flights a day for the next year, but we often forecast 15 price points and 20 or more O&Ds on each flight. The numbers of individual forecasts can become overwhelming.