Co-founder and Principal of Air52 Aviation Consultants, Koen Karsbergen brings over two decades of experience in airline management and strategy to his columns.
Through Air52, Koen assists airlines, airports and industry stakeholders with practical solutions for complex challenges, drawing on his extensive background in feasibility studies, fleet and network planning, and airline startups. He also contributes to IATA training courses and serves as faculty for Aviation MBA programs.
The views and opinions expressed in this column are solely those of the author and do not necessarily reflect the official policy or position of AeroTime.
Ever wondered how an airline considers adding your city to its map? The decision isn’t made on a whim or gut feeling. It’s the culmination of months, sometimes years, of analysis, debate, and strategic thinking that would make chess grandmasters sweat.
When airline executives gather to evaluate a potential new route, they place a multi-million-dollar bet on the future. If they get it right, they’ve unlocked a profitable revenue stream. If they get it wrong, they’ve committed aircraft, crew, and marketing resources to a money-losing venture that could drain the company.
Having spent two decades advising carriers on these exact decisions, I’ve witnessed firsthand how the process blends rigorous data analysis with strategic intuition. Let me walk you through the fascinating journey from the initial concept to adding a new destination to the route map.
Decoding market demand
The foundation of any route evaluation starts with a seemingly simple question: Will enough people want to fly this route at prices that cover the costs? Answering this requires the examination of a complex ecosystem of data.
Network planners begin by analyzing historical booking patterns, but don’t stop there. They examine economic indicators in origin and destination markets, tourism trends, business connections, and demographic shifts. A growing tech hub might signal increased business travel, while rising disposable income could forecast leisure demand.
The pandemic created unprecedented challenges for this analysis. Traditional forecasting models built on historical data suddenly became unreliable as travel patterns transformed overnight. Airlines now employ hybrid approaches that blend pre-pandemic trends with emerging behaviors, acknowledging that business travel recovery varies dramatically by sector and geography.
“We used to joke that forecasting was part science, part art, and part luck,” a senior network planner at a major European carrier told me recently. “Post-pandemic, the luck portion has definitely increased.”
The feasibility filter
Before financial models are built, potential routes face a series of make-or-break tests that determine whether they deserve deeper analysis.
First comes alignment with the carrier’s business model. As I explored in my column on airline business models, each carrier has a distinct strategic identity. A premium carrier focused on business travelers won’t suddenly launch leisure-heavy routes to beach destinations, regardless of the potential load factors. The route must fit the airline’s broader strategy and brand positioning.
Traffic rights also present a notable challenge in international aviation. While we are witnessing progress toward liberalization, the industry continues to operate under a complex framework of bilateral agreements. These agreements can restrict certain routes, limiting frequencies and aircraft types to safeguard the interests of national carriers.
Airport infrastructure constraints can derail otherwise promising opportunities. A route might show excellent demand, but if the destination airport lacks appropriate facilities, from sufficient runway length to adequate gates, it becomes operationally unfeasible. Environmental restrictions add another layer of complexity, with noise abatement procedures and emissions requirements creating additional operational constraints.
And then there’s the slot puzzle I detailed in my column on airport slots. At congested airports, securing takeoff and landing slots at commercially viable times can be nearly impossible. A route that looks perfect on paper becomes worthless if your aircraft can only depart at 03:00 or arrive at midnight.
The network effect
Modern airlines don’t evaluate routes in isolation. Each new destination becomes part of an interconnected network where the whole should exceed the sum of its parts.
When evaluating a potential route from Amsterdam to Medellin, KLM doesn’t just consider point-to-point traffic. They analyze how many passengers might connect from Stockholm, Berlin, or Barcelona through Amsterdam to Medellin. They examine how the flight’s timing would integrate with their existing bank structure at Schiphol (AMS), a carefully orchestrated cluster of arrivals followed by departures that maximize passenger connection opportunities. A poorly timed flight that misses these connection windows loses much of its network value. And not only are the airlines concerned about passengers, but they also need to consider how cargo opportunities might enhance the route’s economics.
The partnership dimension adds another layer of complexity. As I explored in my columns on airline alliances and interline agreements, modern carriers rarely operate in isolation. A marginally profitable route might become strategically vital if it feeds valuable connecting traffic to and from alliance partners or supports codeshare arrangements.
Take Singapore Airlines’ decision to launch nonstop service to Seattle in 2019. Beyond the local Singapore-Seattle market, the route gained substantial value from connections to Alaska Airlines’ domestic network. The interline partnership allowed Singapore Airlines to tap into dozens of North American markets without operating additional flights.
The financial equation
Now comes the moment of truth: will this route make money?
Revenue forecasting begins with estimating load factors (percentage of seats filled) and yields (revenue per passenger kilometer) across different seasons, days of the week, and fare classes. Sophisticated models predict how passenger segments respond to various price points and schedule options.
On the cost side, analysts break down expenses into direct operating costs (aircraft, fuel, crew, maintenance, airport fees) and indirect allocations (marketing, overhead, distribution). Modern models now incorporate carbon costs and Sustainable Aviation Fuel (SAF) premiums as environmental considerations become increasingly important. With SAF, which is made from renewable resources rather than fossil fuels, currently costing several times more than conventional jet fuel, its impact on route economics can be substantial.
Key performance indicators include:
- RASK (Revenue per Available Seat Kilometer): How much revenue each seat generates when flown one kilometer. Airlines aim to maximize this figure through strategic pricing and high load factors.
- CASK (Cost per Available Seat Kilometer): The cost to fly one seat one kilometer. Airlines obsessively work to lower this number through fleet modernization and operational efficiencies. The gap between RASK and CASK ultimately determines a route’s profitability.
- Contribution margin: How much the route adds to the airline’s bottom line after covering variable costs
- Breakeven load factor: What percentage of seats must be filled to cover costs
Today’s planning tools run thousands of simulations with varying fuel prices, exchange rates, competitive responses, and economic conditions. This helps planners understand the expected outcome and the range of possible outcomes, and associated risks.
Beyond the numbers
Some routes get approved despite marginal economics because they serve broader strategic objectives. Airlines might launch services to a new region to establish market presence ahead of competitors, defend valuable territory from competitive incursion, or position themselves for future growth opportunities.
When Qatar Airways launched the Doha-Cardiff service in 2018, industry observers questioned the route’s standalone economics. However, the move secured first-mover advantage in an underserved market and demonstrated Qatar’s commitment to expanding its UK presence beyond London.
Fleet utilization can also drive route decisions. An airline with excess capacity might launch routes that contribute positively to fixed costs, even if they wouldn’t meet normal profitability thresholds. This explains why you sometimes see seasonal routes appear during off-peak periods – they’re making productive use of aircraft that would otherwise sit idle.
The green dimension
Environmental considerations have evolved from regulatory compliance to strategic imperative. Today’s route evaluations incorporate sustainability metrics that were barely considered a decade ago.
New routes undergo environmental impact assessments measuring expected emissions per passenger, opportunities for operational efficiency, and alignment with corporate sustainability goals. With carbon pricing mechanisms expanding globally and consumer awareness growing, routes that might have looked profitable five years ago may no longer pass muster when environmental costs are fully accounted for.
Some European carriers now evaluate whether short-haul routes might be better served through rail partnerships. Lufthansa’s “intermodal” strategy with Deutsche Bahn allows passengers to book combined air-rail journeys, potentially freeing up valuable slots for more profitable long-haul services while reducing the airline’s carbon footprint.
The future of route planning
As aviation recovers from the pandemic, route evaluation continues to evolve. Machine learning algorithms now identify patterns human analysts might miss. Digital twins of airline networks allow planners to simulate the ripple effects of new routes throughout complex systems. Sustainability metrics gain prominence alongside traditional financial indicators.
Yet for all this technological sophistication, route evaluation remains fundamentally about understanding human behavior and economic trends. The most successful network planners combine analytical rigor with market intuition, balancing data-driven decisions with strategic vision.
So, the next time you board a flight to a new destination, remember the years of planning behind that simple route map in your seatback pocket. Your journey began long before you stepped onboard in those strategy sessions where someone asked, “What if we flew there?”