Show simple item record

dc.contributor.advisorPeter P. Belobaba.en_US
dc.contributor.authorLu, Yuxuan,S.M.Massachusetts Institute of Technology.en_US
dc.contributor.otherMassachusetts Institute of Technology. Department of Aeronautics and Astronautics.en_US
dc.date.accessioned2019-10-04T21:33:12Z
dc.date.available2019-10-04T21:33:12Z
dc.date.copyright2019en_US
dc.date.issued2019en_US
dc.identifier.urihttps://hdl.handle.net/1721.1/122413
dc.descriptionThesis: S.M., Massachusetts Institute of Technology, Department of Aeronautics and Astronautics, 2019en_US
dc.descriptionCataloged from PDF version of thesis.en_US
dc.descriptionIncludes bibliographical references (pages 153-156).en_US
dc.description.abstractAncillary 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.en_US
dc.description.abstractWe 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.en_US
dc.description.abstractIn 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.en_US
dc.description.statementofresponsibilityby Yuxuan Lu.en_US
dc.format.extent156 pagesen_US
dc.language.isoengen_US
dc.publisherMassachusetts Institute of Technologyen_US
dc.rightsMIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.en_US
dc.rights.urihttp://dspace.mit.edu/handle/1721.1/7582en_US
dc.subjectAeronautics and Astronautics.en_US
dc.titleImpacts of ancillary services on airline revenue managementen_US
dc.typeThesisen_US
dc.description.degreeS.M.en_US
dc.contributor.departmentMassachusetts Institute of Technology. Department of Aeronautics and Astronauticsen_US
dc.identifier.oclc1119730824en_US
dc.description.collectionS.M. Massachusetts Institute of Technology, Department of Aeronautics and Astronauticsen_US
dspace.imported2019-10-04T21:33:10Zen_US
mit.thesis.degreeMasteren_US
mit.thesis.departmentAeroen_US


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record