Analysis of airline seat control with region factor

Pages: 363 - 378, Volume 8, Issue 2, May 2012

doi:10.3934/jimo.2012.8.363       Abstract        References        Full Text (367.4K)       Related Articles

Yanming Ge - College of Information Technology, Shanghai Ocean University, Shanghai, 201306, China (email)

Abstract: Due to the lower consumption level to the flights in some regions, the flights' vacancy rate is usually very high and the service level is low. To airlines, the common procedure to handle such problems is to employ different price systems. But this in return results in unsatisfying effects. In this paper we discussed the above issue from another standpoint. Firstly, we introduced a parameter, called region factor, and then constructed a stochastic dynamic model of a single-leg flight related to it. Secondly, we derived some monotone properties for the expected revenue functions. These properties ensured that we could choose appropriate region factor to recover the high vacancy rate caused by the lower consumption levels, but also adopt the similar optimal threshold control strategy as the traditional revenue management did. Furthermore, in addition to improving the service levels, the proper region factor can increase the total revenue sometimes. Lastly, Numerical results were used to illustrate properties of the model.

Keywords:  Revenue management, OR in airlines, dynamic programming, region factor.
Mathematics Subject Classification:  Primary: 93E20, 90B06; Secondary: 49L20.

Received: January 2011;      Revised: September 2011;      Published: April 2012.

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