Dynamic pricing for airline revenue management problem with cancellation possibility

Download

index.pdf

Date

2014

Author

Selçuk, Ahmet Melih

Metadata

Show full item record

Item Usage Stats

209
views

561
downloads

In this study, dynamic pricing methods are developed for airline revenue management problem. The bookings for a particular flight are considered in two classes as restricted and flexible bookings representing whether the buyer can claim a refund in case of a cancellation. The different classes of bookings are considered for the same inventory to be sold at different prices. For pricing the restricted bookings, the principle ideas in revenue management literature are adopted to maximize revenues by managing the demand through price control and alternative mathematical models are developed. For estimating the worth of the cancellation refund claim, which is the difference between flexible booking and restricted booking prices, the risk of cancellation is considered from the risk averse buyer’s point of view and corresponding pricing methods are proposed. The proposed approach for pricing the refund claim is not specific to airline sector and can also be used for similar dynamic pricing problems where the bookings services that are sold in advance are subject to cancellation.

Subject Keywords

Airlines, Airlines, Airlines, Revenue management.

URI

http://etd.lib.metu.edu.tr/upload/12617848/index.pdf
https://hdl.handle.net/11511/23925

Collections

Graduate School of Natural and Applied Sciences, Thesis

Suggestions

OpenMETU
Core

Dynamic pricing in airline revenue management Selcuk, Ahmet Melih; Avşar, Zeynep Müge (2019-10-15) In this study, an exact Dynamic Programming formulation is developed for price based revenue management in the airline industry. Structural properties of the optimal pricing policy are presented first. Then, the optimal policy is investigated for four different price-demand relationships and the characteristic properties of the airline demand are discussed. Performance of the proposed Dynamic Programming formulation is numerically compared with an alternative approximate approach based on the repeated use o...
Approximation of sell-out probability to estimate expected marginal value of capacity Selçuk, Ahmet Melih; Avşar, Zeynep Müge (Elsevier BV, 2020-01-01) © 2020 Elsevier LtdIn this study, the dynamic pricing problem is considered for single-leg airline revenue management. The dynamic programming formulation given for this problem is expressed in terms of the expected marginal revenue of capacity. In order to make the formulation applicable in practice, approximations are proposed in this study for estimating the expected marginal revenue term. Numerical tests based on simulating the sales process show that the proposed approximations work well as compared to...
A sustainable aviation sector index to benchmark the landside and airside based on airport-airline pairs Kilkis, San; Kılkış, Şiir (2017-01-01) This paper develops and applies a sustainable aviation sector index to benchmark the performance of airport and airline pairs. The index is composed of two subindices that address the landside and airside of the aviation sector. These indices involve 5 dimensions and 25 indicators on the landside and 4 dimensions and 20 indicators on the airside, respectively. The sum of the products of the normalised values of the related dimensions on the landside and airside are then used to obtain single composite indic...
How the presence of low-cost carrier competition scheduling differentiation Yetişkul Şenbil, Emine (2010-01-01) This study explores the relation between airline market structure and schedule differentiation. Using a location theory framework applied to product differentiation over the time scale, the analysis relates the level of competition, and the presence of low-cost carriers in non-stop US markets to schedule clustering. As expected from theory, it is found that schedule clustering increases with competition, resulting in reduction in product differentiation. It is also found that this tendency is lower in the p...
A risk-sensitive approach for airline network revenue management problems Çetiner, Demet; Köksalan, Murat; Department of Industrial Engineering (2007) In this thesis, airline network revenue management problem is considered for the case with no cancellations and overbooking. In literature, there exist several approximate probabilistic and deterministic mathematical models developed in order to maximize expected revenue at the end of the reservation period. The aim of this study is to develop models considering also the risks involved in the proposed booking control policies. Two linear programming models are proposed which incorporate the variance of the ...

Citation Formats

A. M. Selçuk, “Dynamic pricing for airline revenue management problem with cancellation possibility,” Ph.D. - Doctoral Program, Middle East Technical University, 2014.