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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), pp. 535-541. (doi:10.1057/palgrave.jors.2601721).

Record type: Article

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.

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More information

Published date: 2004
Keywords: air transport, revenue management, simulation, yield management
Organisations: Operational Research

Identifiers

Local EPrints ID: 29633
URI: http://eprints.soton.ac.uk/id/eprint/29633
ISSN: 0160-5682
PURE UUID: b95c5b96-5120-46a6-bf58-8d49bbf089e7

Catalogue record

Date deposited: 11 May 2006
Last modified: 17 Jul 2017 15:57

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Contributors

Author: M.F. Anjos
Author: R.C.H. Cheng
Author: C.S.M. Currie

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