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Market Sizing/ Estimations- How many passengers at Heathrow Airport in a day?

Anonymous A asked on Aug 11, 2019

Hi,

I have been trying to solve this market sizing with my own approach and would like to have your ideas on how to solve it quickly and effectively? Multiple ideas and approaches are more than welcome!

Thanks a lot in advance :)

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Vlad replied on Aug 11, 2019
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Hi,

You should make the following assumptions:

  • Peak, non-peak hours and total operational hours
  • # of planes landing and taking off during peaks and non-peaks
  • Max # of passengers per plane and avg occupancy rate

Best

Ivan replied on Aug 14, 2019

It might be prudent to clarify if we count both departures and arrivals. Vlad just delivered an approach to calculate both departing and arriving passengers, while Deniz takes into account only departures.

Deniz
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replied on Aug 11, 2019
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Hi,

A practical solution to this question would be to look at the bottlenecks, i.e. security lanes at the airport (instead of gates, number of flights etc.). The approach would be to multiply

  • total number of security lanes
  • opening rate of security lanes - some may not be open sometimes (per hour, to reflect peak/off-peak times)
  • # of passengers per hour in one security lane (which can be found by understanding the average minute per passenger between putting the belongings on the x-ray belt and the collection of them (per hour, to reflect peak/off-peak times)
  • number of hours airport operates in a day

Best,

Deniz

Hi, it is fair what you said but it will exclude the passengers landing on the airport. Total passengers would include departures + arrivals and with your suggested solution, we will just be covering the "departing" passengers. Please correct me if I am wrong. Thanks! — Anonymous A on Aug 18, 2019

Kieran replied on Aug 11, 2019

If I were to do it:

Heathrow is one of if not the most busy airport int he world, therefore assume a plane leaves/arrives every 10 mins. That would be 6 planes an hour and with 2 runways makes 12 planes an hour total. Which equates to 288 planes a day (12*24).

Understand this may be a high range value as there will be inefficiencies in some planes (go arounds etc.) and peak/off peak times.

Then I would take an average plane of 400 passengers and times this by 250 planes per day (moved down from 288 to account for inefficiences and off peak times - could be lower).

This would give 100000 passengers per day at heathrow from arrivals and departures.

Interested to see how other people would do it (probably could do it on number of gates at heathrow and a plane leaving/arriving every hour or so at a gate)?

Hi, I tried the approach the HU said. And tried doing it by number of gates. I estimated 5 terminals (incl. international/ domestic) and assumed around 20 gates per terminal. Then I calculated the average utilisation of the gates (based on time taken by one flight in completing the boarding). Then assumed 20 out of 24 hours of operations. That gave me the number of flights boarded every hour- scaling up to a day. And finally, I assumed the number of passengers in a flight and multiplied with the total #flights estimated in step 1. I estimated approximately 140,000 passengers per day. Looking forward to other approaches! — Anonymous A on Aug 11, 2019

Udayan
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replied on Aug 15, 2019
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Vlad highlighted the simplest bottom up estimation approach. An alternative top down approach is to look at number of visitors to London a year, estimate % by different ports of entry and assign a % to Heathrow (vs Gatwick, Luton and City)

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Market Sizing Cases are used to test your quantitative and reasoning skills. The interviewer evaluates your structure, numbers-handling and business sense.

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