THE OPTIMAL OVERBOOKING AND PRICING POLICIES FOR US MAJOR AIRLINES

Overbooking in the airline industry has been studied intensively in the operations research area. These studies consider only the trade-off between the marginal revenue received and marginal penalty (e.g. compensations) incurred by an airline for overbooking an additional passenger on a particular flight, and ignore the possible revenue effect of rejecting (bumping) passengers. This paper seeks the optimal overbooking policies for US major airlines by considering how denied-boarding passengers can affect an airline's current and future revenues. Since overbooking can be reduced by increasing airfares (and vice versa), this paper develops a dynamic optimization models that seeks the v\best combination of overbooking and pricing policies that jointly maximize an airline's passenger revenue over time. Sensitivity analyses are performed to provide important implications to airline management and researchers.

• Corporate Authors:

  Transportation Research Forum

  One Farragut Square South, Suite 500
  Washington, DC  United States  20006-4003
• Authors:
  • Suzuki, Yoshinori
• Conference:
  • Proceedings of the 42nd Annual Meeting of the Transportation Research Forum
  • Location: Annapolis, Maryland
  • Date: 2000-11-29 to 2000-12-1
• Publication Date: 2000

Language

• English

Media Info

• Pagination: p. 715-716

Subject/Index Terms

• TRT Terms: Airlines; Airport operations; Boarding; Management; Optimization; Overbooking; Passengers; Pricing; Revenues
• Subject Areas: Administration and Management; Aviation; Finance; Passenger Transportation;

Filing Info

• Accession Number: 00804802
• Record Type: Publication
• Files: TRIS
• Created Date: Jan 11 2001 12:00AM