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Author: Yin Shiang Valenrina Soo Publisher: ISBN: Category : Languages : en Pages : 95
Book Description
(Cont.) The goal of this thesis is to provide a more comprehensive investigation into the effectiveness of fare adjustment as a tool to improve airline revenues in this new environment by 1) extending the investigation of the effectiveness of fare adjustment with standard forecasting to leg-based RM systems (namely EMSRb and HBP) and also a mixed fare structure where different fare structures are used for different markets, and 2) looking at the alternative use of fare adjustment in the reservation system. Experiments with the Passenger Origin-Destination Simulator demonstrate that RM Fare Adjustment with standard forecasting can improve an airline's network revenue by 0.8% to 1.3% over standard revenue management methods. In particular, RM Fare Adjustment reduces the aggressiveness of path forecasting through the lowering of bid prices as it takes into account the risk of buying-down. Simulations of Fare Adjustment in the Reservation System also showed positive results with revenue improvement of about 0.4% to 0.7%.
Author: Yin Shiang Valenrina Soo Publisher: ISBN: Category : Languages : en Pages : 95
Book Description
(Cont.) The goal of this thesis is to provide a more comprehensive investigation into the effectiveness of fare adjustment as a tool to improve airline revenues in this new environment by 1) extending the investigation of the effectiveness of fare adjustment with standard forecasting to leg-based RM systems (namely EMSRb and HBP) and also a mixed fare structure where different fare structures are used for different markets, and 2) looking at the alternative use of fare adjustment in the reservation system. Experiments with the Passenger Origin-Destination Simulator demonstrate that RM Fare Adjustment with standard forecasting can improve an airline's network revenue by 0.8% to 1.3% over standard revenue management methods. In particular, RM Fare Adjustment reduces the aggressiveness of path forecasting through the lowering of bid prices as it takes into account the risk of buying-down. Simulations of Fare Adjustment in the Reservation System also showed positive results with revenue improvement of about 0.4% to 0.7%.
Author: Richard H. Zeni Publisher: Universal-Publishers ISBN: 1581121415 Category : Business & Economics Languages : en Pages : 274
Book Description
Accurate forecasts are crucial to a revenue management system. Poor estimates of demand lead to inadequate inventory controls and sub-optimal revenue performance. Forecasting for airline revenue management systems is inherently difficult. Competitive actions, seasonal factors, the economic environment, and constant fare changes are a few of the hurdles that must be overcome. In addition, the fact that most of the historical demand data is censored further complicates the problem. This dissertation examines the challenge of forecasting for an airline revenue management system in the presence of censored demand data. This dissertation analyzed the improvement in forecast accuracy that results from estimating demand by unconstraining the censored data. Little research has been done on unconstraining censored data for revenue management systems. Airlines tend to either ignore the problem or use very simple ad hoc methods to deal with it. A literature review explores the current methods for unconstraining censored data. Also, practices borrowed from areas outside of revenue management are adapted to this application. For example, the Expectation-Maximization (EM) and other imputation methods were investigated. These methods are evaluated and tested using simulation and actual airline data. An extension to the EM algorithm that results in a 41% improvement in forecast accuracy is presented.
Author: Demet Çetiner Publisher: Springer Science & Business Media ISBN: 3642358225 Category : Business & Economics Languages : en Pages : 180
Book Description
A major problem arising in airline alliances is to design allocation mechanisms determining how the revenue of a product should be shared among the airlines. The nucleolus is a concept of cooperative game theory that provides solutions for allocating the cost or benefit of a cooperation. This work provides fair revenue proportions for the airline alliances based on the nucleolus, which assumes a centralized decision making system. The proposed mechanism is used as a benchmark to evaluate the fairness of the revenue sharing mechanisms, where the alliance partners behave selfishly. Additionally, a new selfish revenue allocation rule is developed that improves the performance of the existing methods.
Author: 王守廉 Publisher: Open Dissertation Press ISBN: 9781361209844 Category : Languages : en Pages :
Book Description
This dissertation, "Airline Revenue Management: Passenger Right and Protection" by 王守廉, Sau-lim, Tim, Wong, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: ABSTRACT Abstract of dissertation entitled "Airline Revenue Management, Passenger Right and Protection" Submitted by Sau Lim Tim WONG For the degree of Master of Arts in Transport Policy and Planning at The University of Hong Kong in June 2005 As the airline operating environment is changing, especially with the increasing emphasis on consumer right protection, problems results from applying revenue management techniques has received a lot of attention and generated some debate. This paper, begins with a discussion of the importance of filling empty seats on airlines, explains how and why the airline industry developed revenue management, with focus on overbooking, as a solution to the empty-seat problem. The paper then explores the problem as a result of the adoption of overbooking practice and examines passenger right by looking into the booking contract and their right to reservation under air travel contract as well as some contractual right of airlines to refuse the carriage. Subsequently, the paper explores current passenger protection mechanism; both voluntary and involuntary adopted by airlines like denied boarding compensation scheme and statue-based passenger protection. Finally, the paper concludes by evaluating some potential solutions, ranging from reforming the selection of passengers to be offloaded, to setting the compensation for offloading, to expanding the overbooking disclosure requirements altogether. DOI: 10.5353/th_b3163318 Subjects: Airlines - Reservation systems Revenue management Consumer protection
Author: Pui-Lam Stephen Ip Publisher: Open Dissertation Press ISBN: 9781361168271 Category : Languages : en Pages :
Book Description
This dissertation, "The Strategic Role of Airline Revenue Management Systems and the Importance of Change Management" by Pui-lam, Stephen, Ip, 葉沛林, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. DOI: 10.5353/th_b3126796 Subjects: Revenue management - China - Hong Kong - Case studies Organizational change - China - Hong Kong - Management - Case studies
Author: Eric C. Hao Publisher: ISBN: Category : Languages : en Pages : 110
Book Description
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.
Author: Michael David Wittman Publisher: ISBN: Category : Languages : en Pages : 228
Book Description
Even as the distribution and sale of commercial airline tickets has shifted in recent years from physical reservation offices to the Internet, many airline commercial processes remain highly reliant on pre-Internet technologies and standards. This legacy infrastructure compels airlines to publish a discrete set of prices in each market they serve, and to select prices for each itinerary from among only this limited set of possible price points. Recent advancements in distribution technology, such as the New Distribution Capability (NDC), offer airlines the chance to break away from these constraints. These new standards enable the creation of customized offers with prices that could be generated dynamically in real time. While airlines have shown interest in these new technologies, practical methods for integrating dynamic pricing into existing airline revenue management (RM) and distribution systems have yet to be defined and evaluated by academics or practitioners. In this work, we propose the first mechanisms for dynamic pricing designed specifically for use in the airline industry. By selectively providing increments or discounts based on demand segmentation and estimates of willingness-to-pay (WTP), our mechanisms can increase airline revenues by stimulating new bookings from price-sensitive travelers while encouraging more price-inelastic travelers to buy up to higher price points. Moreover, the methods are compatible with the pricing, RM, and distribution systems currently used by airlines today. Our dynamic pricing heuristics emerge from the development of a novel theoretical model of customer choice. Using the model, we introduce a new concept called "conditional WTP" to describe how a customer's willingness-to-pay for an itinerary can change depending on the other alternatives available in his choice set. We show how assuming an unchanging maximum WTP for air travel, as in past work on dynamic pricing, can lead to overestimation of WTP in competitive environments, and describe how an airline's estimates of conditional WTP play an integral role in our dynamic pricing mechanisms. We test our dynamic pricing methods in the Passenger Origin-Destination Simulator (PODS): a robust agent-based booking simulation that models the interactions between passengers and airlines. In a complex, competitive network, we find that our heuristics can increase airline revenues by up to 1 - 4% from traditional pricing and RM alone. Incrementing prices can result in revenue gains through an increase in yield, and discounting can lead to higher revenues through demand stimulation and share shift from other airlines. In both cases, we identify a phenomenon we call "forecast spiral-up" which increases yield by protecting more seats for higher-value fare classes. We also develop a variant of the heuristic in which multiple substitutable flights are priced simultaneously, leading to additional revenue gains. Finally, we provide the first in-depth assessment of the practical implications of dynamic pricing for the airline industry. We focus on airline concerns that dynamic pricing could lead to price wars, excessive discounting, and a race to the bottom. We also evaluate some of the potential legal implications and customer reactions that could emerge as dynamic pricing becomes more commonplace. These analyses provide new insight on how airline competition could potentially change as dynamic pricing is integrated into traditional airline processes.
Author: Yin Shiang Valenrina Soo
Author: Yin Shiang Valenrina Soo
Author: Richard H. Zeni
Author: Banu Turkmen
Author: Demet Çetiner
Author: 王守廉
Author: Pui-Lam Stephen Ip
Author: Eric C. Hao
Author: Pui-lam Ip (Stephen)
Author: Andrew Jacob Cusano
Author: Michael David Wittman