Impacts Of Ancillary Services On Airline Revenue Management

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Impacts of Ancillary Services on Airline Revenue Management

Author : Yuxuan Lu (S.M.)
Publisher :
ISBN 13 :
Total Pages : 156 pages
Book Rating : 4.:/5 (111 download)

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Book Synopsis Impacts of Ancillary Services on Airline Revenue Management by : Yuxuan Lu (S.M.)

Download or read book Impacts of Ancillary Services on Airline Revenue Management written by Yuxuan Lu (S.M.) and published by . This book was released on 2019 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ancillary services have been contributing increasing amounts to airlines' total revenue. Over the past decade, the number of ancillary services offered by airlines has proliferated, the quality has improved, and they have provided benefits for both carriers and passengers. Nevertheless, the pricing of the services, and particularly the interactions between the pricing of ancillary services and the airline ticket, has not been examined in competitive networks with varying passenger behavior assumptions. This thesis presents simulation tests quantifying the effects of ancillary revenues on airlines' total revenue and other performance metrics. We first introduce the history of airline ancillary services, explain the current airline revenue management process and fare structure upon which ancillary purchases are based, and summarize past literature on airline revenue management systems and airline ancillary services. We then qualitatively explain current passenger ancillary purchase behavior models, including sequential and simultaneous choice behaviors, and the impacts of the assumed behaviors on airline ticket selections and ancillary purchases. We then test the impacts of ancillary service pricing under the assumptions of our simulation environment, the Passenger Origin-Destination Simulator. We test ancillary services under different scenarios, including charging passengers differently (ancillary price segmentation) and providing services differently to passengers (ancillary disutility differentiation) for different trip purposes. The results show that the pricing of ancillary services can be leveraged by an airline as a pricing tool; when an airline discounts an ancillary service, it can gain revenue at the expense of other airlines. In our tests, when an airline discounts ancillary services for leisure passengers but charges a premium to business passengers, it observes a 3.45% total revenue gain mostly from increased leisure passengers' ticket revenues. The benefits of this asymmetric pricing could be lost when other airlines match this discounted price. Furthermore, the results also indicate that symmetric optimization of ancillary service pricing by all airlines in the market can lead to industry gains as high as 1.47% in terms of total revenue. With some ancillary pricing structures, the introduction of ancillary services encourages passengers to pay more for the ticket. The opposite scenarios are also observed in some cases when the introduction of a service leads to a reduction in ticket revenue.

Ancillary Services in the Airline Industry

Author : Adam Bockelie
Publisher :
ISBN 13 :
Total Pages : 282 pages
Book Rating : 4.:/5 (11 download)

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Book Synopsis Ancillary Services in the Airline Industry by : Adam Bockelie

Download or read book Ancillary Services in the Airline Industry written by Adam Bockelie and published by . This book was released on 2019 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent proliferation of ancillary services means that airline passengers can face substantially different ancillary service prices and offerings based on their itinerary and fare class selection. At the same time, airlines have become interested in accounting for this supplementary revenue stream in their revenue management (RM) systems to maximize total, not just ticket, revenue. This thesis develops models for both of these issues, with a goal of providing a better understanding of how ancillary services affect the airline industry. We develop the Ancillary Choice Model (ACM) to describe how passengers make purchase decisions about ancillary services in conjunction with the selection of a fare class. We model two extremes of passenger knowledge and awareness of ancillary services, which we term simultaneous and sequential. We show that under the simultaneous model, the presence and price of ancillary services can affect the fare class selection of a passenger, even when all fare classes have the same ancillary prices. The second part of this thesis studies total revenue optimization. We provide a detailed assessment of a prior total revenue maximization approach, the Optimizer Increment (01), proving that it can be an optimal revenue management strategy under limited conditions, but also showing through the Passenger Origin-Destination Simulator (PODS) that it decreases revenue in more realistic environments. We then develop a new revenue management optimization model, the Ancillary Choice Dynamic Program (ACDP), which maximizes total revenue by explicitly including the revenue and fare class choice impacts of ancillary services. We describe an Ancillary Marginal Demand (AMD) and Ancillary Marginal Revenue (AMR) transformation that can be used as heuristics to provide the ancillary and choice awareness benefits of ACDP to existing RM optimization models.

Ancillary Revenues in the Airline Industry

Author : Eric C. Hao
Publisher :
ISBN 13 :
Total Pages : 110 pages
Book Rating : 4.:/5 (89 download)

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Book Synopsis Ancillary Revenues in the Airline Industry by : Eric C. Hao

Download or read book Ancillary Revenues in the Airline Industry written by Eric C. Hao and published by . This book was released on 2014 with total page 110 pages. Available in PDF, EPUB and Kindle. Book excerpt: Airlines have increasingly depended on ancillary revenue in response to rising fuel costs, de- creased yields, and an increasingly competitive environment. Estimates indicate that U.S. airlines collected over $8 billion in ancillary revenue in 2012. Ancillary revenue poses challenges for airlines, including revenue management (RM) and distribution since total revenue maximization requires consideration of ancillary revenue and ticket revenue. In this thesis, we: (1) describe trends contributing to the movement towards ancillary revenue; (2) present three methods for incorporating ancillary revenue into revenue management and distribution; (3) evaluate the revenue performance of these methods using the Passenger Origin Destination Simulator (PODS), a competitive airline simulator. One method of including ancillary revenue into RM is RM Input Adjustment with Class Level Estimates, which involves modifying input fares to the optimizer. Because fare values to the optimizer are aggregated by market and class, the airline uses class level estimates of ancillary revenue potential to augment fares. Another method involves modifying the fare value at the time of availability control, or Availability Fare Adjustment. In network optimization, the availability fare refers to the fare used to compare an itinerary-class to the control mechanism, like displacement adjusted virtual nesting (DAVN) or additive bid price (ProBP). Availability Fare Adjustment with Class Level Estimates also involves using class level estimates of ancillary revenue. Alternatively, we test scenarios where the airline estimates ancillary revenue for individual passengers in Customized Availability Fare Adjustment with Passenger Specific Estimates. Although this type of estimation is not feasible yet, results from Customized Availability Adjustment give a theoretical bound to revenue gain. We nd that incorporating ancillary revenue opens availability for lower yield passengers. Revenue increases occur from extra bookings in these classes because more bookings are taken. Revenue losses occur from higher class passengers buying down to cheaper seats. Without willingness to pay (WTP) forecasting, net revenue losses of up to {2.6% are observed. In advanced RM systems with WTP forecasting, revenue gains of +0.6% are observed for Class Level RM Input Adjustment, +0.9% for Class Level Availability Fare Adjustment, and +2.6% for Passenger Specific Customized Availability Adjustment.

Airline Revenue Management

Author : Curt Cramer
Publisher : Springer Nature
ISBN 13 : 3658337214
Total Pages : 122 pages
Book Rating : 4.6/5 (583 download)

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Book Synopsis Airline Revenue Management by : Curt Cramer

Download or read book Airline Revenue Management written by Curt Cramer and published by Springer Nature. This book was released on 2021-11-10 with total page 122 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book provides a comprehensive overview of current practices and future directions in airline revenue management. It explains state-of-the-art revenue management approaches and outlines how these will be augmented and enhanced through modern data science and machine learning methods in the future. Several practical examples and applications will make the reader familiar with the relevance of the corresponding ideas and concepts for an airline commercial organization. The book is ideal for both students in the field of airline and tourism management as well as for practitioners and industry experts seeking to refresh their knowledge about current and future revenue management approaches, as well as to get an introductory understanding of data science and machine learning methods. Each chapter closes with a checkpoint, allowing the reader to deepen the understanding of the contents covered.This textbook has been recommended and developed for university courses in Germany, Austria and Switzerland.

The Impacts of Airline Loyalty Programs on Revenue Management Optimization

Author : Juan Pablo García Saavedra
Publisher :
ISBN 13 :
Total Pages : 107 pages
Book Rating : 4.:/5 (12 download)

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Book Synopsis The Impacts of Airline Loyalty Programs on Revenue Management Optimization by : Juan Pablo García Saavedra

Download or read book The Impacts of Airline Loyalty Programs on Revenue Management Optimization written by Juan Pablo García Saavedra and published by . This book was released on 2017 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: Loyalty Programs have evolved over years turning into unique business units, responsible for producing an important source of revenue for airlines. However, despite their contribution to the business, the lack of knowledge on the impacts of giving away rewards to loyal customers may lead to suboptimal decisions, harming bottom line results. The main objective of this thesis is to develop a methodology to model and measure the net revenue impacts of award passengers as they integrate to current airline revenue management optimization practices. By modeling an award demand using the Passenger Origin Destination Simulation tool, it was possible to understand the impacts on airlines' main metrics compared to an environment without these passengers, and to define a baseline scenario based on current airline industry data, to analyze the impacts of different RM strategies. A methodology was proposed to identify and quantify three main effects seen when allowing award passengers into the current RM optimization. The Award Revenue accounts for the economic benefit for the airline of each award passenger. Displaced Revenue is the ticket revenue loss due to the displacement of paid passengers. And, the Sell Up effect measures the change in average paid fare as a result of the introduction of this new demand. Differences between the real economic benefit to the airline of award passengers and the value that the RM optimizer uses for assigning their availability were introduced to measure the net award revenue impact. Results showed that at award valuations higher than the lowest fare, airlines are able to increase their total revenues due to higher award revenue and lower displaced ticket revenue. This outcome was consistent for all RM Schemes and demand levels examined.

Airline Revenue Management with Dynamic Offers

Author : Kevin K. Wang (S. M.)
Publisher :
ISBN 13 :
Total Pages : 144 pages
Book Rating : 4.:/5 (119 download)

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Book Synopsis Airline Revenue Management with Dynamic Offers by : Kevin K. Wang (S. M.)

Download or read book Airline Revenue Management with Dynamic Offers written by Kevin K. Wang (S. M.) and published by . This book was released on 2020 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt: Airline revenue management will have to adapt to a new world of airline retailing enabled by the New Distribution Capability. One area of interest is Dynamic Offer Generation (DOG), in which airlines respond to every booking request in real-time with a customized set of offers and prices. In these offers, ancillary services may be bundled with the flight. Selecting and pricing these offer sets represents a new joint pricing and assortment optimization problem in revenue management. We propose a formulation for the dynamic offer generation problem and study the robustness of its solution. We derive conditions under which selling the flight in a bundle with an ancillary service increases total net revenues over selling the ancillary as an optional add-on. We show how this model integrates with traditional revenue management systems. We simulate DOG under competition in the Passenger Origin-Destination Simulator (PODS) to show the potential revenue benefits. The simulation results show that bundling the flight with an ancillary service can generate higher revenues than selling both services separately. This is especially true when the ancillary service is highly valued by passengers, can be provided at low cost by the airline and passengers make purchase decisions rationally. We also show that price segmentation between passenger types can increase revenue and that there is a first-mover advantage for airlines to implement dynamic offer generation mechanisms. When one of four airlines implements DOG, it can increase its total net revenue by up to 2.6% through ancillary bundling alone and up to 12% in combination with dynamic flight pricing. Most of these dynamic flight pricing gains are attributable to undercutting the existing fares offered by airlines with traditional RM systems. When all four airlines use DOG, their revenue increases by up to 0.9% through bundling alone and 7% with dynamic pricing. Under more realistic market conditions, the simulated net revenue gain of DOG reduces to 1.7% when all airlines implement it.

Proceedings of the Sixteenth International Conference on Management Science and Engineering Management – Volume 1

Author : Jiuping Xu
Publisher : Springer Nature
ISBN 13 : 3031103882
Total Pages : 854 pages
Book Rating : 4.0/5 (311 download)

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Book Synopsis Proceedings of the Sixteenth International Conference on Management Science and Engineering Management – Volume 1 by : Jiuping Xu

Download or read book Proceedings of the Sixteenth International Conference on Management Science and Engineering Management – Volume 1 written by Jiuping Xu and published by Springer Nature. This book was released on 2022-07-13 with total page 854 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book covers many hot topics, including theoretical and practical research in many areas such as dynamic analysis, machine learning, supply chain management, operations management, environmental management, uncertainty, and health and hygiene. It showcases advanced management concepts and innovative ideas. The 16th International Conference on Management Science and Engineering Management (2022 ICMSEM) will be held in Ankara, Turkey, during August 3-6, 2022. ICMSEM has always been committed to promoting innovation management science (M-S) and engineering management (EM) academic research and development. The book provides researchers and practitioners in the field of Management Science and Engineering Management (MSEM) with the latest, cutting-edge thinking and research in the field. It will appeal to readers interested in these fields, especially those looking for new ideas and research directions.

Air Transport in the 21st Century

Author : John F. O'Connell
Publisher : Routledge
ISBN 13 : 1351959891
Total Pages : 341 pages
Book Rating : 4.3/5 (519 download)

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Book Synopsis Air Transport in the 21st Century by : John F. O'Connell

Download or read book Air Transport in the 21st Century written by John F. O'Connell and published by Routledge. This book was released on 2016-12-05 with total page 341 pages. Available in PDF, EPUB and Kindle. Book excerpt: Airlines are buffeted by fluctuating political and economic landscapes, ever-changing competition, technology developments, globalization, increasing deregulation and evolving customer requirements. As a consequence all sectors of the air transport industry are in a constant state of flux. The principle aim of this book is to review current trends in the airline industry and its related suppliers, thereby providing an insight into the forces that are changing its dynamics. The factors that are reshaping the structure of the industry are examined with a view to identifying the key issues whose impact will be critical in the future. The book features two very distinct sections. The first contains short contributions from industry executives at CEO/VP level from airlines, aircraft/engine manufacturers, safety and navigational provider organisations, who have set out their take of where the airline industry is heading. This commercial input sets the scene for the book and provides the bridge to the second section, which is composed of 18 chapters written by distinguished academic authors. Each chapter presents a valuable insight into a specific area of the air transport industry, including: airlines, airports, cargo, deregulation, the environment, navigation, strategy, information technology, security and tourism. The shared objective of the authors is to describe and explain the core competencies that are determining the current shape of the industry and to examine the forces that will change its direction going forward. The book is written in a management style and will appeal to all levels of personnel who work for airlines across the world. It is also written for airport authorities, aerospace manufacturers, regulatory and government transportation agencies, researchers and students of aviation management, transport studies, tourism and the wider air transport industry.

The Evolution of Yield Management in the Airline Industry

Author : Ben Vinod
Publisher : Springer Nature
ISBN 13 : 3030704246
Total Pages : 417 pages
Book Rating : 4.0/5 (37 download)

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Book Synopsis The Evolution of Yield Management in the Airline Industry by : Ben Vinod

Download or read book The Evolution of Yield Management in the Airline Industry written by Ben Vinod and published by Springer Nature. This book was released on 2021-05-28 with total page 417 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book chronicles airline revenue management from its early origins to the last frontier. Since its inception revenue management has now become an integral part of the airline business process for competitive advantage. The field has progressed from inventory control of the base fare, to managing bundles of base fare and air ancillaries, to the precise inventory control at the individual seat level. The author provides an end-to-end view of pricing and revenue management in the airline industry covering airline pricing, advances in revenue management, availability, and air shopping, offer management and product distribution, agency revenue management, impact of revenue management across airline planning and operations, and emerging technologies is travel. The target audience of this book is practitioners who want to understand the basics and have an end-to-end view of revenue management.

Revenue Impacts of Airline Yield Management

Author : Chung Yu Mak
Publisher :
ISBN 13 :
Total Pages : 246 pages
Book Rating : 4.:/5 (264 download)

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Book Synopsis Revenue Impacts of Airline Yield Management by : Chung Yu Mak

Download or read book Revenue Impacts of Airline Yield Management written by Chung Yu Mak and published by . This book was released on 1992 with total page 246 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the highly competitive airline industry today, Yield or Revenue Management is extremely important to the survival of any carrier. Since fares are generally matched by all carriers to be competitive, the ability of an airline to control its passenger mix and achieve higher overall revenue is essential. Therefore, the revenue impacts of airline yield management are very important. Although there has been much discussion among people in the industry about the revenue impacts of yield management, it has received little research attention. The focus of this research is to develop an understanding of the revenue impacts of several factors that contribute to the effectiveness of yield management. In this thesis we begin by discussing the issues involved with airline yield management and the existing relevant literature. Based on the knowledge and experience gained through these previous studies, we develop a method to study the revenue impacts of airline yield management. With the development of a single-leg booking simulation, we can isolate most of the external and indirect factors that influence an airline's overall revenue. We perform a number of simulations under different scenarios to estimate the real revenue impacts of airline yield management. The different scenarios tested include varying the number of fare classes, relaxing the demand distribution assumptions, comparing static vs. dynamic seat allocation, relaxing seat inventory control assumptions and incorporating different capacity constraints or demand factors. We then present and discuss the results from these simulations with respect to their revenue impacts. Finally, we use the Revenue Opportunity Model developed by American Airlines Decision Technologies to compare revenue opportunity achieved in a simulated environment, and suggest areas for future research.

Competitive Impacts of Continuous Pricing Mechanisms in Airline Revenue Management

Author : Alexander R. Papen
Publisher :
ISBN 13 :
Total Pages : 142 pages
Book Rating : 4.:/5 (119 download)

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Book Synopsis Competitive Impacts of Continuous Pricing Mechanisms in Airline Revenue Management by : Alexander R. Papen

Download or read book Competitive Impacts of Continuous Pricing Mechanisms in Airline Revenue Management written by Alexander R. Papen and published by . This book was released on 2020 with total page 142 pages. Available in PDF, EPUB and Kindle. Book excerpt: Traditionally, airlines have been limited to a set of fixed price points to distribute their fare products. The advent of IATA’s New Distribution Capability (NDC), however, will soon enable airlines to quote any fare from a continuous range. In theory, such continuous pricing could increase revenues by extracting more of the consumer surplus, through its ability to offer fares closer to the customer’s willingness-to-pay. This thesis examines the impacts of continuous pricing in competitive airline networks through simulation in the Passenger Origin-Destination Simulator (PODS). To this end, both class-based and classless RM methods for continuous pricing are presented. Class-based continuous RM relies on the same underlying forecasting and optimization models as traditional RM, while quoting a single continuous fare. Classless RM, on the other hand, completely abandons the notion of pre-specified fare classes, but instead forecasts and optimizes over a temporal dimension. Simulations show that the improved pricing granularity from continuous pricing results in revenue gains of 1-2% when adopted by all airlines, while the gain for the first-mover might be as high as 10-15%. These revenue gains are driven by the ability of continuous pricing to generate lower fares, in-between existing price points, towards the end of the booking horizon. These lower fares, in turn, result in the stimulation of new demand and capture of high-yield business passengers from competitors. We conclude by showing that an airline with traditional RM can reduce, or even reverse, the impact of a competitor moving to continuous pricing by inserting additional price points, adjusting its own RM system settings, or discounting its upper fares. Compared to the current general practice of fare matching, these less transparent competitive responses could have negative impacts on revenues throughout the industry when airlines repeatedly respond to each other’s pricing actions.

Applications of Statistical Methods in Airline Ancillary Pricing and Revenue Management

Author : Shuai Shao
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (11 download)

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Book Synopsis Applications of Statistical Methods in Airline Ancillary Pricing and Revenue Management by : Shuai Shao

Download or read book Applications of Statistical Methods in Airline Ancillary Pricing and Revenue Management written by Shuai Shao and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Airline Revenue Management and Its Effects on Customer Satisfaction

Author : Gian-Marco Nacht
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (965 download)

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Book Synopsis Airline Revenue Management and Its Effects on Customer Satisfaction by : Gian-Marco Nacht

Download or read book Airline Revenue Management and Its Effects on Customer Satisfaction written by Gian-Marco Nacht and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explains airline Revenue Management and its tools, differences between Low Cost Carriers and Full Service Carriers, and what as well as how severe the effects of Revenue Management on Customer Satisfaction are. The information-basis consists of academic research, as well as a survey specifically conducted for the covered topics. The main findings are that customers are indeed affected by Revenue Management and do change their behavior accordingly when booking flights. However, customers are already used to these systems and are somewhat mentally prepared for e.g. price changes. In conclusion, it appears that there are short-term, but only negligible long-term effects. Therefore, it seems inopportune to radically change or even forego Revenue Management-practices, as additional value created by more satisfied customers would not exceed opportunity cost of less effective pricing.

Forecasting for Airline Network Revenue Management

Author : Jeffrey Stuart Zickus
Publisher :
ISBN 13 :
Total Pages : 138 pages
Book Rating : 4.:/5 (397 download)

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Book Synopsis Forecasting for Airline Network Revenue Management by : Jeffrey Stuart Zickus

Download or read book Forecasting for Airline Network Revenue Management written by Jeffrey Stuart Zickus and published by . This book was released on 1998 with total page 138 pages. Available in PDF, EPUB and Kindle. Book excerpt: Airline revenue management entails protecting enough seats for late-booking, high-fare passengers while still selling seats which would have otherwise gone empty at discounted fares to earlier-booking customers. In the evolution of revenue management to network origin-destination control, previous research has shown that revenue gains of some seat optimization algorithms can be much lower than others. One possible reason is the process by which demand estimates are generated; namely, forecasting and detruncation. Forecasting is used to estimate passenger demand based on historical flight data, while detruncation makes projections of what demand would have been in cases where the historical data has been constrained by a capacity limitation. This thesis explores the question of the interaction between forecasting methods, detruncation methods, and seat optimization algorithms on a simulated airline network, using the Passenger Origin-Destination Simulator (PODS) revenue management simulation tool, which models a network environment with two competing airlines. Changes in the forecasting and detruncation methods in combination with the seat optimization algorithms were tested in order to see what revenue impacts resulted. Additionally, passenger loads, forecasts, and fare class availability were examined to understand the reasons behind the observed revenue results. The simulations showed that seat optimizers which had relatively poor performance using a standard forecasting and detruncation method had substantial revenue increases when different forecasting and detruncation combinations were implemented. The results also indicate that the better combination of forecasting and detruncation causes higher revenues for all seat optimization methods tested, as a better passenger mix is realized due to higher levels of detruncation and more accurate forecasts. However, the sensitivity of the seat optimizers to the forecasting and detruncation methods remains mixed. Inferior detruncation (or forecasting) methods on a network can offset the revenue gains resulting from improvement to origin-destination control from leg-based control for some seat optimization algorithms.

Impacts of Revenue Management on Estimates of Spilled Passenger Demand

Author : Michael Abramovich
Publisher :
ISBN 13 :
Total Pages : 140 pages
Book Rating : 4.:/5 (862 download)

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Book Synopsis Impacts of Revenue Management on Estimates of Spilled Passenger Demand by : Michael Abramovich

Download or read book Impacts of Revenue Management on Estimates of Spilled Passenger Demand written by Michael Abramovich and published by . This book was released on 2013 with total page 140 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the airline industry, spill refers to passenger demand turned away from a flight because demand has exceeded capacity. The accurate estimation of spill and the lost revenue it implies is an important parameter in airline fleet assignment models, where improved estimates lead to more profitable assignments. Previous models for spill estimation did not take into account the effects of passenger choice and airline revenue management. Since revenue management systems protect seats for later-arriving higher fare passengers, revenue management controls will influence the number of spilled passengers and their value because they will restrict availability to lower fare passengers even if seats on the aircraft are available. This thesis examines the effect of various revenue management systems and fare structures on spill, and, in turn, the marginal value of incremental capacity. The Passenger Origin Destination Simulator is used to simulate realistic passenger booking scenarios and to measure the value of spilled demand. A major finding of the research is that in less restricted fare structures and with traditional revenue management systems, increasing capacity on a flight leads to buy-down which can result in negative marginal revenues and therefore revenue losses. This behavior is contrary to conventional wisdom and is not considered in existing spill models. On the other hand, marginal revenues at low capacities are greater than would be predicted by first-choice-only spill models because some passengers will sell-up to higher fares to avoid spilling out. Additionally, because of passenger recapture between flights, adding capacity to one flight can lead to revenue losses on another. Therefore, the marginal value of incremental capacity is not always positive. Negative marginal revenues and associated revenue losses with increasing capacity can at least be partially mitigated by using more advanced revenue management forecasting and optimization algorithms which take into account passenger willingness to pay. The thesis also develops a heuristic analytical method for estimating spill costs which takes into account the effects of passenger sell-up, where previous models tend to underestimate the spill cost by only modeling passengers' first choices. The heuristic demonstrates improved estimates of passenger spill: in particular, in restricted fare structures and for moderate amounts of spill, the model exhibits approximate relative errors on the order of 5%, a factor of two improvement over previous models.

Module Fourteen - Retailing

Author : Gary L Parker
Publisher : Gary L Parker
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4./5 ( download)

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Book Synopsis Module Fourteen - Retailing by : Gary L Parker

Download or read book Module Fourteen - Retailing written by Gary L Parker and published by Gary L Parker. This book was released on 2024-08-10 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: In an effort to overcome the perception of a seat as a commodity, and to increase yields and loyalty, a key initiative in the passenger transportation community is the introduction of branded products with their associated privileges. In addition to the different fare conditions for each branded product, there are different travel experiences, baggage entitlements, cabin information, and loyalty rewards. Ancillary revenue product and service experimentation are evolving as we move forward. Passenger carriers all over the world are adding optional extras such as pre-paid baggage, early boarding, assigned seating, and pre-order meals. A la carte is at the opposite end of the spectrum from methods that bundle amenities using distinct price points. Allowing consumers to click and choose their way through the booking process is a favourite practice among low-cost carriers and a growing number of traditional carriers. It’s one of the easier implementation choices because it merely adds optional extras to a carrier’s existing fare structure.

Air Transport Management

Author : Lucy Budd
Publisher : Taylor & Francis
ISBN 13 : 1317183282
Total Pages : 395 pages
Book Rating : 4.3/5 (171 download)

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Book Synopsis Air Transport Management by : Lucy Budd

Download or read book Air Transport Management written by Lucy Budd and published by Taylor & Francis. This book was released on 2016-11-10 with total page 395 pages. Available in PDF, EPUB and Kindle. Book excerpt: Commercial air transport is a global multimillion dollar industry that underpins the world economy and facilitates the movement of over 3 billion passengers and 50 million tonnes of air freight worldwide each year. With a clearly structured topic-based approach, this textbook presents readers with the key issues in air transport management, including: aviation law and regulation, economics, finance, airport and airline management, environmental considerations, human resource management and marketing. The book comprises carefully selected contributions from leading aviation scholars and industry professionals worldwide. To help students in their studies the book includes case studies, examples, learning objectives, keyword definitions and ‘stop and think’ boxes to prompt reflection and to aid understanding. Air Transport Management provides in-depth instruction for undergraduate and postgraduate students studying aviation and business management-related degrees. It also offers support to industry practitioners seeking to expand their knowledge base.