A decision support model for establishing an air taxi service: a case study

Recent availability of relatively cheap small jet aircraft creates opportunities for a new air transport business: Air taxi, an on-demand service in which travellers call in one or a few days in advance to book transportation. In this paper, we present a methodology and simulation study supporting important strategic decisions, like for instance determining the required number of aircraft, for a company planning to establish an air taxi service in Norway. The methodology is based on a module simulating incoming bookings, built around a heuristic for solving the underlying dial-a-flight problem. The heuristic includes a separate method for solving the important subproblem of determining the best distribution of waiting time along a single aircraft schedule. The methodology has proved to provide reliable decision support to the company.