Maximizing revenue in the airline industry under one-way pricing
Anjos, M.F., Cheng, R.C.H. and Currie, C.S.M. (2004) Maximizing revenue in the airline industry under one-way pricing. Journal of the Operational Research Society, 55, (5), 535-541. (doi:10.1057/palgrave.jors.2601721).
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Description/Abstract
The paper describes a methodology that has been implemented in a major British airline to find the optimal price to charge for airline tickets under one-way pricing. An analytical model has been developed to describe the buying behaviour of customers for flights over the selling period. Using this model and a standard analytical method for constrained optimization, we can find an expression for the optimal price structure for a flight. The expected number of bookings made on each day of the selling period and in each fare class given these prices can then be easily calculated. A simulation model is used to find the confidence ranges on the numbers of bookings and these ranges can be used to regulate the sale of tickets. A procedure to update the price structure based on the remaining capacity has also been developed.
| Item Type: | Article |
|---|---|
| ISSNs: | 0160-5682 (print) |
| Related URLs: | |
| Keywords: | air transport, revenue management, simulation, yield management |
| Subjects: | H Social Sciences > HE Transportation and Communications H Social Sciences > HB Economic Theory Q Science > QA Mathematics |
| Divisions: | University Structure - Pre August 2011 > School of Mathematics > Operational Research |
| Item ID: | 29633 |
| Date Deposited: | 11 May 2006 |
| Last Modified: | 01 Jun 2011 06:35 |
| Contributors: | Anjos, M.F. (Author) Cheng, R.C.H. (Author) Currie, C.S.M. (Author) |
| Date: | 2004 |
| Status: | Published |
| Contact Email Address: | anjos@stanfordalumni.org |
| URI: | http://eprints.soton.ac.uk/id/eprint/29633 |
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