Dynamic pricing for airline revenue management problem with cancellation possibility

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2014

Author

Selçuk, Ahmet Melih

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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

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Citation Formats

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