Estimation: How many people going through the airport each year questions??

brainstorming Case Interview estimation Market sizing
Recent activity on Mar 25, 2018
6 Answers
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Anonymous A asked on Mar 21, 2018

Hello,

How do we construct a structure to calculate how many people going through the Heathrow Airport each year?

I am thinking of (# of planes/day * passenger per plane)= passenger per day*365

How do we include peak times, domestic vs international? Also, some airplanes has 200-seat capacity, but some has 400-seat. Should we take an average for this such as 300?

Thank you very much.

(edited)

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Sidi
Expert
replied on Mar 21, 2018
McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 300+ candidates secure MBB offers

Couple of thoughts:

  • General approach is fine! Don't overcomplicate estimation questions
  • Just make sure you also think of non-passengers! You can segment e.g. into arriving passengers, departing passengers, crew members, airport employees, persons that come for pick up, persons that come for drop off (clarify whether the latter two groups are in scope)
  • On your question of airplane capacities, I would indeed suggest to work with an average passenger capacity per plane. If the interviewer wants more detail, you can segment into large, medium, small.
  • This will give you "ceiling level" of passengers on a given day (100% capacity). You can now define normal, low, and peak times during the year (assume 10%, 20% and 30% discount to the 100% ceiling level respectively) and assign each discount to full months
  • Then just add it all up, and voilà

But as stated earlier - before doing all sorts of segmentations, just explain how you would do it ideally, but check whether an average is also okay. This can save you LOTS of hassle!

Best, Sidi

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Anonymous C replied on Mar 21, 2018

I had a similar case with McKinsey 5 years ago, so I think I can share some details given how long ago it was (2nd round, partner interview).

A lot depends on where the partner leads you. There are many ways to do the estimation, but if the partner leads you in a certain direction, you need to follow it. In my case, the partner ignored my attempts to do the estimation from the demand side and asked to identify and estimate from the bottleneck perspective. The bottleneck for airport is, as was correctly mentioned above, runways - you probably experienced many times the need to sit in the airplane and wait when a runway becomes available.

So, the rough equation would be: # hours an airport operates * # runways * (# minutes in an hour / # minutes it takes a plane to take off/on) * # passengers per plane * load factor. That's the generic approach, now you can adjust it to account for non-passengers, support staff, by, for example, finding out a number of passengers and then assuming a ratio of passengers to non-passengers.

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Anonymous B replied on Mar 21, 2018

[hours open] * [#runways] * [60m/T or L time] * [#people per plane] * [uti % plane and runway]
20 * 8 * (60/10) * 250 * 90%
~ 215K per day.

I just double checked on Google AFTER this, and it's 213K/day. So pretty close.

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B
Expert
replied on Mar 21, 2018
NOT AVAILABLE

Hey,

I fully endorse Sidi’s point... just let me add you that if I was the interviewer you would get extra points if you are able to identify that crew members can repeatedly be the same in several flights - thus to illustrate what can be considered extra valued on such estimation question (ie, to differentiate a good from an outstanding candidate)

Best

Bruno

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Francesco
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replied on Mar 21, 2018
#1 Expert for Coaching Sessions (3.600+) | 1.300+ Reviews with 100% Recommendation Rate | Ex BCG | 8+ Years of Coaching

Hi Anonymous,

I agree with the points mentioned by Sidi; as for how to calculate peak times vs non peak times, domestic vs international, high capacity vs low capacity, etc I would recommend the following:

  • Identify the different segments – eg high vs medium vs low capacity
  • Define a value for each of them – eg high: 400; medium: 300; low 150
  • Provide a percentage for the frequency for each. Most of the time a normal distribution will work fine. High: 20%; medium: 60%; low: 20%

Performing the math: 80+180+30 =290. You could then ask if you can round it to 300.

I would recommend doing this before saying what is your expected number, and not after, otherwise you may find a final number different from the first you mentioned.

Best,

Francesco

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Andrea
Expert
Content Creator
replied on Mar 25, 2018
Former BCG Principal and decision round interviewer

I think general approaches here are fine. The key is to understand whether this is a 2-5 mins question or a 20-30 minute case. If latter then go down the whole route of segmentation of plane size, busyness of week days/period of year, otherwise just mention those a potential interesting points and go with big averages.

hope it helps,

andrea

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Sidi gave the best answer

Sidi

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 300+ candidates secure MBB offers
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