Air freight service network design for stochastic demand

This paper introduced a two-stage stochastic model to address the strategic air freight network design problems under stochastic demand. Most of existing approaches for the airline network design problems are restricted to deterministic environment. However, the demand in airline market usually varies seasonally. The first stage of the proposed model is to determine the number and the location of hubs. The second stage consists of deciding the flight routes to transport flows from origins to destinations in an optimal fashion based upon the hub location and realized uncertain scenario. Finally, the data from air passenger market in Taiwan and China is used to test the proposed model.