A framework and models for evaluating the multifare dynamic pricing mechanism of low-cost carriers

Kuan-cheng Huang, Yi Ya Peng, I. Wen Wu

研究成果: Article

摘要

In general, traditional airlines (legacy airlines or full-service airlines) develop multifare mechanisms and rely on seat inventory control to make quantity-based decisions. On the other hand, low-cost carriers (LCCs) tend to adopt the single-fare system and dynamically adjust the price. Nonetheless, more and more LCCs have begun to offer multiple-fare classes so as to take advantage of market segmentation and price discrimination. In order to evaluate the effectiveness of various revenue management (RM) mechanisms, the concept of willingness-to-pay is applied to model the customer choice with respect to RM control decisions. Dynamic programming- based models are then developed to provide a unified framework to evaluate the dynamic pricing mechanism of LCCs against the traditional seat inventory control policy that makes the open/close decisions of the fare classes with predetermined prices. Based on the numerical experiment, it is found that the former results in significantly higher revenue than the latter.

原文English
頁(從 - 到)308-322
頁數15
期刊Transportation Journal
52
發行號3
DOIs
出版狀態Published - 1 六月 2013

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