Multiple booking classes available on a given departure within a single compartment of the equipment all share a common inventory of seats. It is the goal of revenue management to increase or maximise the total revenues of the departure by filling those seats with the most profitable mix of customers. This is accomplished by determining the optimal seat allocations or authorised selling levels, per booking class. We begin this module by considering the benefits and dangers of discount seat allocation control and then look at the respective roles of the revenue analyst and computerised revenue management (RM) systems in determining optimal seat allocations. The second section explains the basic methodology used by many leg- or segment-based RM systems to determine seat protection levels. The final section considers the advantages and disadvantages of leg-based seat inventory control.
Operations research techniques are extremely important tools for planning airline operations. However, much of the technical literature on airline optimization models is highly specialized and accessible only to a limited audience. Allied to this there is a concern among the operations research community that the materials offered in OR courses at MBA or senior undergraduate business level are too abstract, outdated, and at times irrelevant to today's fast and dynamic airline industry. This book demystifies the operations and scheduling environment, presenting simplified and easy-to-understand models, applied to straightforward and practical examples. After introducing the key issues confronting operations and scheduling within airlines, Airline Operations and Scheduling goes on to provide an objective review of the various optimization models adopted in practice. Each model provides airlines with efficient solutions to a range of scenarios, and is accompanied by case studies similar to those experienced by commercial airlines. Using unique source material and combining interviews with alumni working at operations and scheduling departments of various airlines, this solution-orientated approach has been used on many courses with outstanding feedback. As well as having been comprehensively updated, this second edition of Airline Operations and Scheduling adds new chapters on fuel management systems, baggage handling, aircraft maintenance planning and aircraft boarding strategies. The readership includes graduate and undergraduate business, management, transportation, and engineering students; airlines training and acquainting new recruits with operations planning and scheduling processes; general aviation, flight school, International Air Transport Association (IATA), and International Civil Aviation Organization (ICAO) training course instructors; executive jet, chartered flight, air-cargo and package delivery companies, and airline consultants.
With variable pricing, a single seat in a compartment can be sold to different customers at different prices. As we’ve seen, a particular set of rules and restrictions are associated with each fare product to ensure that it can only be purchased by the market segment that it targets. How many seats should a passenger carrier make available to each different fare product? How do you manage these seat allocations over the booking cycle in response to actual demand? How do you ensure that you reserve enough seats for the last-minute high-revenue customer? Most of the questions above will be addressed in the next module on seat inventory control that immediately follows this one. Booking classes are an integral part of seat inventory control. Before we can discuss the logistics of inventory control we need to understand booking class assignment and structure. We begin in the first section by describing the use of booking classes in a passenger carrier’s computer reservation system and their evolution over time. Section 2 looks at the process of assigning different fare products to each booking class and identifies potential problems. In the final section, we consider different booking class structures and explain the difference between independent versus nested control structures.
It is important to continue to update the use of advanced systems by promoting general awareness throughout the management, design, manufacture and operation of railways and other emerging passenger, freight and transit systems. Originating from presentations at the 17th International Conference on Railway Engineering Design and Operation, this volume contains selected research works on the topic. The included papers help to facilitate the use of advanced systems and place a key focus on the applications of computer systems in advanced railway engineering. These research studies will be of interest to all those involved in the development of railways, including managers, consultants, railway engineers, designers of advanced train control systems and computer specialists.
Written for MBA students and practitioners, this book is a comprehensive introduction to the theory and application of pricing and revenue optimization.
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.
This book proposes capacity options as a flexible alternative air cargo contract type, and illustrates how capacity can be priced through option contracts. The analysis is accomplished by means of an analytical multivariate optimization model under price and demand uncertainty. A case study using data from a leading German carrier illustrates the financial potential. Finally, the author shows how capacity-option contracts integrate into the context of air cargo revenue management.
The Oxford Handbook of Pricing Management is a comprehensive guide to the theory and practice of pricing across industries, environments, and methodologies. The Handbook illustrates the wide variety of pricing approaches that are used in different industries. It also covers the diverse range of methodologies that are needed to support pricing decisions across these different industries. It includes more than 30 chapters written by pricing leaders from industry, consulting, and academia. It explains how pricing is actually performed in a range of industries, from airlines and internet advertising to electric power and health care. The volume covers the fundamental principles of pricing, such as price theory in economics, models of consumer demand, game theory, and behavioural issues in pricing, as well as specific pricing tactics such as customized pricing, nonlinear pricing, dynamic pricing, sales promotions, markdown management, revenue management, and auction pricing. In addition, there are articles on the key issues involved in structuring and managing a pricing organization, setting a global pricing strategy, and pricing in business-to-business settings.
