A multiple period capacitated inventory model for airline fuel management

Abstract

One of the major operating cost items of an airline company is fuel, which can amount to approximately 20% of its overall operating cost. This paper presents a decision support model that determines the amount of fuel to be uplifted by a plane at each station along its route over a predetermined planning horizon so as to minimise overall fuel costs. The aforementioned fuel management problem is modelled as a multiple period capacitated inventory problem and solved using linear programming. An example application illustrates the applicability of this model to Middle East Airline's (MEA) operations and summarises the dollar savings obtained by applying it over a one week planning horizon.