Modeling airline group passenger demand for revenue optimization
Name
FTL_R_1991_05.pdf
Size
4.88 MB
Format
Adobe PDF
Checksum (MD5)
d14e1d404a73bb7b8e8f019aa8314968
Author(s)
Svrcek, Tom
Date Issued
1991
Publisher
[Cambridge, Mass. : Massachusetts Institute of Technology], Flight Transportation Laboratory, [1991]
Series/Report no.
FTL report (Massachusetts Institute of Technology. Flight Transportation Laboratory) ; R91-5
Abstract
Many airlines currently use a variety of analytic techniques for seat inventory control as part of a larger revenue or "yield" management system. However, much of the this effort has emphasized decisions based on the individual passenger, and has neglected a significant segment of total airline passenger demand, namely that of group passengers. Group passenger demand differs in several important respects from individual passenger demand, and these differences have motivated the need for separate attention in booking procedures and future demand forecasting. In this thesis we begin by discussing the issues involved with trying to characterize the stochastic nature of airline group passenger demand, and identify the primary elements of variability associated with it. Later, we use these primary elements of demand to develop a mathematical model for the distribution of group passengers on a given flight(s). Armed with a well-defined distribution for group passenger demand, we enhance current mathematical programming approaches for solving the seat inventory control problem to include the control of group seat inventories. We then present a model for determining the minimum per passenger fare an airline should charge an ad hoc group request based on the displacement of individual passengers. Finally, we discuss the issues involved with overbooking in the group demand context, and suggest areas for further research.
Description
Cover title
May 1991
Also issued as an M.S. thesis, Dept. of Civil Engineering, MIT, 1991
Includes bibliographical references (p. 103-104)
Subjects
Airlines
Air travel
Demand (Economic theory)
Management
Mathematical models
Finance
Forecasting
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