Dynamic simulation model of air cargo demand forecast and terminal capacity planning

This paper establishes an approach to forecast air cargo demand related to terminal capacity expansion. To balance capacity and demand, it is required to forecast the future demand based on optimistic and pessimistic projections to decide when and how much, the airport should expand the capacity. System dynamics simulation model can provide reliable forecast and generate scenarios to test alternative assumptions and decisions. It was found that GDP and FDI play an important role in fostering the demand. Terminal expansion would be required in 2018 based on the optimistic projection; meanwhile, based on pessimistic projection, the capacity can meet demand in 2030, which means no need to increase the capacity.