Revenue management airlines

Dedicated revenue management systems are increasingly developed to be applied in airline and non-airline industries (Secomandi et al. 2002). For several recently developed revenue management systems in airlines, hotels, car rentals, telecommunication systems and cargo transportation see Gosavi et al. (2007), Bartodziej et al. (2007), Lee at al. (2007), Defregger and Kuhn (2007), Reiner and Natter (2007). These papers focus on reve-... 

Gosavi A, Ozkaya E, Kahraman AF (2007) Simulation optimization for revenue management of airlines with cancellation and overbooking. OR Spectrum 29 21-38... 

Many of the papers in this section also have applications to yield or revenue management problems such as those faced by the airlines. For example, in the airlines there is usually a fixed supply of a product (seats on a plane), with a specific deadline for the selling season (time the plane takes off). Price is... 

American Airlines succeeded primarily because it used differential pricing to lower prices for a fraction of the seats and attract passengers who would otherwise have flown PeopleExpress. American did not lower prices for the fraction of seats used by business travelers who were not flying with PeopleExpress. Targeted differential pricing is at the heart of successful revenue management. 

Revenue management can be a powerful tool for every owner of assets in a supply chain. Most snccessfnl examples of the use of revenue management are from the travel and hospitality indnstry and inclnde airlines, car rentals, and hotels. American AirUnes has stated that revenue management techniqnes increase its revenues by more than 1 billion each year. Revenue management techniqnes at Marriott raise annual revenues by more than 100 million. Revenue management can have a similar impact on all stages of a supply chain that satisfy one or more of the four conditions identified earlier. 

Another example of revenue management for a perishable asset is the use of overbooking by the airline industry. An airplane seat loses all value once the plane takes off. Given that people often do not show up for a flight even when they have a reservation, airlines sell more reservations than the capacity of the plane, to maximize expected revenue. 

We are far enough into this crisis to express our dissatisfaction on how govemmcaits have managed it - with no risk assessment, no consultation, no coradinatirai, and no leadership. This crisis is costing airlines at least 200 million a day in lost revenues and the European economy is suffering billions of dollars in lost business. In the face of such dire economic consequences, it is incredible that Europe s transport ministers have taken five elays to organize a teleconference. ... 

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