Author: Adam Bockelie Publisher: ISBN: Category : Languages : en Pages : 282
Book Description
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.
Author: Yuxuan Lu (S.M.) Publisher: ISBN: Category : Languages : en Pages : 156
Book Description
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.
Author: John F. O'Connell Publisher: Routledge ISBN: 1351959891 Category : Business & Economics Languages : en Pages : 341
Book Description
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.
Author: Alessandro Cento Publisher: Springer Science & Business Media ISBN: 3790820881 Category : Business & Economics Languages : en Pages : 189
Book Description
The debate on the future of the aviation sector and the viability of its traditional business practices is the core of this book. The liberalization of the EU market in the 1990s has radically modi?ed the competitive environment and the nature of airline competition. Furthermore, the new millennium began with terrorist attacks, epidemics, trade globalization, and the rise of oil prices, all of which combined to push the industry into a “perfect storm”. Airline industry pro?tability has been an elusive goal for several decades and the recent events has only accentuated existing weaknesses. The main concern of ind- try observers is whether the airline business model, successful during the 1980s and 1990s, is now sustainable in a market crowded by low-cost carriers. The airlines that will respond rapidly and determinedly to increase pressure to restructure, conso- date and segment the industry will achieve competitive advantages. In this context, the present study aims to model the new conduct of the ‘legacy’ carriers in a new liberalized European market in terms of network and pricing competition with l- cost carriers and competitive reaction to the global economic crises.
Author: Scott Ambrose Publisher: Routledge ISBN: 0429614160 Category : Transportation Languages : en Pages : 256
Book Description
Applying fundamentals of marketing to commercial passenger air transportation, this textbook puts the emphasis on marketing principles and illustrative ways in which airlines can distinguish themselves within the highly competitive global marketplace. Fundamentals of Airline Marketing begins with a survey of current airline business strategies and the macro forces that have shaped the airline industry in the past and will continue to do so in the future. The growing importance of technology is discussed both from the perspective of better understanding customer needs and engaging more effectively with them. The central role of the "customer" is explored through the lens of modern segmentation and branding approaches. Coverage then shifts to the tactical decision areas consisting of the 4Ps—product, place, promotion, and price—in which marketers shape and execute their strategies. The book concludes with a focus on executing marketing initiatives internally through customer-facing employee groups and externally through the measurement and management of the customer experience. Fundamentals of Airline Marketing: • is an accessible textbook on the fundamentals of marketing for commercial passenger air transportation; • chronicles the marketing innovations and controversies that have been central to the historic shift in airline fortunes; • demonstrates how airline decisions fit within the fundamentals of marketing and how the marketplace is continuing to evolve; • provides a bridge between key marketing principles and their specific application to the airline industry in each chapter. This textbook is written primarily for undergraduate college students enrolled in aviation business administration programs and related courses. It will also serve as an accessible primer on airline marketing for industry professionals not presently working in marketing and for frontline airline employees seeking to learn more about marketing.
Author: Curt Cramer Publisher: Springer Nature ISBN: 3658337214 Category : Business & Economics Languages : en Pages : 122
Book Description
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.
Author: Ben Vinod Publisher: Springer Nature ISBN: 3030704246 Category : Business & Economics Languages : en Pages : 417
Book Description
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.
Author: Peter Belobaba Publisher: John Wiley & Sons ISBN: 1118881141 Category : Technology & Engineering Languages : en Pages : 536
Book Description
Extensively revised and updated edition of the bestselling textbook, provides an overview of recent global airline industry evolution and future challenges Examines the perspectives of the many stakeholders in the global airline industry, including airlines, airports, air traffic services, governments, labor unions, in addition to passengers Describes how these different players have contributed to the evolution of competition in the global airline industry, and the implications for its future evolution Includes many facets of the airline industry not covered elsewhere in any single book, for example, safety and security, labor relations and environmental impacts of aviation Highlights recent developments such as changing airline business models, growth of emerging airlines, plans for modernizing air traffic management, and opportunities offered by new information technologies for ticket distribution Provides detailed data on airline performance and economics updated through 2013
Author: Maximilian Rothkopf Publisher: LIT Verlag Münster ISBN: 3643100191 Category : Airlines Languages : en Pages : 246
Book Description
The passenger airline industry is a prominent service industry that is becoming increasingly commoditized. As little empirical work in this field exists, this study contributes to research by exploring how passenger airlines leverage innovation in such market conditions from a strategic and organizational view. Comprehensive case studies of a sample of eight passenger airlines constitute the empirical basis. The analysis detects patterns of innovations and draws conclusions on the strategic innovation behavior in the airline industry. The study proposes an organizational concept and a strategic approach for airlines to innovate in an increasingly commoditized market.
Author: National Research Council Publisher: National Academies Press ISBN: 0309056764 Category : Technology & Engineering Languages : en Pages : 188
Book Description
The commercial aviation industry is a major part of the U.S. transportation infrastructure and a key contributor to the nation's economy. The industry is facing the effects of a reduced role by the military as a source of high-quality trained personnel, particularly pilots and mechanics. At the same time, it is facing the challenges of a changing American workforce. This book is a study of the civilian training and education programs needed to satisfy the work-force requirements of the commercial aviation industry in the year 2000 and beyond, with particular emphasis on issues related to access to aviation careers by women and minorities.
Author: Adam Bockelie
Author: Yuxuan Lu (S.M.)
Author: John F. O'Connell
Author: Alessandro Cento
Author: Scott Ambrose
Author: Curt Cramer
Author: Ben Vinod
Author: Peter Belobaba
Author: Maximilian Rothkopf
Author: National Research Council