How Southwest Airlines improved profitability through schedule optimization

"From the very beginning, our relationship with Optym has been a partnership where we are working together to develop a new tool to enhance our unique and complex network optimization capabilities. They are adaptive, agile and highly committed to our projects."

Adam Decaire Senior Director, Southwest Airlines

Background and challenge: 

The most profitable airline schedules adapt to passenger demand as it varies month to month. Southwest Airlines, the largest airline in the United States by domestic passengers boarded, operates more than 4,000 flights each day, using over 700 aircraft to serve about 100 destinations in 11 countries. 

Network planners at Southwest update flight schedules several times per year to match seat capacity with passenger demand. These schedules specify what markets to fly, flight frequency for each market, when to fly and fleet types for each flight leg. It is a daunting optimization problem to generate schedules for thousands of flights, while considering profitability and operational constraints, with almost infinite solutions. Southwest wanted to solve this problem by using the latest technology to build new flight schedules from scratch, but it was unable to find a suitable commercial software solution.  

Solution: 

After Southwest engaged in an international search to find the right company to solve this problem, it selected Optym as its partner. We developed proprietary algorithms by combining in novel ways several operations research techniques, such as mixed integer programming, heuristics, very large-scale neighborhood search and parallel computing, and we demonstrated that clean-sheet flight scheduling was mathematically possible. We then modified our algorithms to enable incremental optimization of existing flight schedules. 

We also combined flight scheduling with crew scheduling and optimized the problem holistically, and the system produced flight schedules that reduced crew costs significantly. We combined our optimization algorithms with an advanced decision support system, where users could define constraints, prepare scenarios, run different optimization modes, and view schedules using advanced visualization tools. 

Results: 

When Southwest started to use SkyMAX in 2015, it was an immediate success. Planners created new flight schedules that were both highly operable and profitable. Using SkyMAX, Southwest generates schedules that improve network profitability by tens of millions of dollars annually. It was considered impossible to generate optimal clean-sheet flight schedules for an airline the size of Southwest, due to the size of the mathematical problem. But with SkyMAX, Southwest’s network planning became innovative by creating clean-sheet schedules to maximize profitability, instead of incrementally modifying an existing schedule. Multiple users can now collaborate to create and analyze more what-if scenarios, create more base schedules, and perform strategic planning studies. 

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