Airline Revenue Management with Strategic Passengers

Abstract

Abstract: The airline dynamic pricing problem with a finite population of strategic passengers is discussed in this paper. When a ticket booking request is received by the airline, it needs to decide whether this request should be offered or not, and if so what is the price. A dynamic programming model is proposed for this problem to maximize the revenue. With the solution obtained by the model, properties and guidelines are discussed. Based on the analysis, optimal pricing policies are presented. Numerical experiments are given to show the application of the proposed approach.

Key words: airline revenue management, strategic passengers, dynamic pricing, seating control

Peng Qing1, Li Hao2. Airline Revenue Management with Strategic Passengers[J]. Industrial Engineering Journal , 2011, 14(4): 160-165.

References

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