Download or read book The Airline Industry written by and published by Emerald Group Publishing. This book was released on 2006 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Airline industry has been under increasing pressure recently, from the increased competition of low-cost airlines and the terrorist events of 2001 to name but a few. Various US airlines, including Delta and Northwest, have been declared bankrupt, oil prices have soared, and seat prices are still being forced down, the supply far outweighing the demand. This e-book looks at recent case studies of airlines in crisis (Continental Airlines), and also airlines which have excelled at expansion during this turbulent time such as Easyjet and Ryanair, and offers examples of successful strategies previously used. The collection also features interviews with high-profile figures from airlines such as Go!, Qatar Airways and SWISS International Airlines.
Download or read book Dynamic Pricing in the Airline Industry written by John Lazarev and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The dissertation consists of two essays on different aspects of dynamic pricing with applications to the U.S. airline industry. The first essay studies how a firm's ability to price discriminate over time affects production, product quality, and product allocation among consumers. The theoretical model has forward-looking heterogeneous consumers who face a monopoly firm. I use this model to study the time paths of prices for airline tickets offered on monopoly routes in the U.S. Using estimates of the model's demand and cost parameters, I compare the welfare travelers receive under the current system to several alternative systems, including one in which free resale of airline tickets is allowed. The second essay, motivated by pricing practices in the airline industry, studies the incentives of players to publicly and independently limit the sets of actions they play later in a game. I find that to benefit from self-restraint, players have to exclude all actions that create deviations for them and keep some actions that can deter deviations of others. I develop a set of conditions under which these strategies form a subgame perfect equilibrium and show that in a Bertrand oligopoly, firms can mutually gain from self-restraint, while in a Cournot oligopoly they cannot.
Download or read book The Theory and Practice of Revenue Management written by Kalyan T. Talluri and published by Springer Science & Business Media. This book was released on 2006-02-21 with total page 731 pages. Available in PDF, EPUB and Kindle. Book excerpt: Revenue management (RM) has emerged as one of the most important new business practices in recent times. This book is the first comprehensive reference book to be published in the field of RM. It unifies the field, drawing from industry sources as well as relevant research from disparate disciplines, as well as documenting industry practices and implementation details. Successful hardcover version published in April 2004.
Download or read book Dynamic Pricing Mechanisms for Airline Revenue Management written by Michael David Wittman and published by . This book was released on 2018 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt: Even as the distribution and sale of commercial airline tickets has shifted in recent years from physical reservation offices to the Internet, many airline commercial processes remain highly reliant on pre-Internet technologies and standards. This legacy infrastructure compels airlines to publish a discrete set of prices in each market they serve, and to select prices for each itinerary from among only this limited set of possible price points. Recent advancements in distribution technology, such as the New Distribution Capability (NDC), offer airlines the chance to break away from these constraints. These new standards enable the creation of customized offers with prices that could be generated dynamically in real time. While airlines have shown interest in these new technologies, practical methods for integrating dynamic pricing into existing airline revenue management (RM) and distribution systems have yet to be defined and evaluated by academics or practitioners. In this work, we propose the first mechanisms for dynamic pricing designed specifically for use in the airline industry. By selectively providing increments or discounts based on demand segmentation and estimates of willingness-to-pay (WTP), our mechanisms can increase airline revenues by stimulating new bookings from price-sensitive travelers while encouraging more price-inelastic travelers to buy up to higher price points. Moreover, the methods are compatible with the pricing, RM, and distribution systems currently used by airlines today. Our dynamic pricing heuristics emerge from the development of a novel theoretical model of customer choice. Using the model, we introduce a new concept called "conditional WTP" to describe how a customer's willingness-to-pay for an itinerary can change depending on the other alternatives available in his choice set. We show how assuming an unchanging maximum WTP for air travel, as in past work on dynamic pricing, can lead to overestimation of WTP in competitive environments, and describe how an airline's estimates of conditional WTP play an integral role in our dynamic pricing mechanisms. We test our dynamic pricing methods in the Passenger Origin-Destination Simulator (PODS): a robust agent-based booking simulation that models the interactions between passengers and airlines. In a complex, competitive network, we find that our heuristics can increase airline revenues by up to 1 - 4% from traditional pricing and RM alone. Incrementing prices can result in revenue gains through an increase in yield, and discounting can lead to higher revenues through demand stimulation and share shift from other airlines. In both cases, we identify a phenomenon we call "forecast spiral-up" which increases yield by protecting more seats for higher-value fare classes. We also develop a variant of the heuristic in which multiple substitutable flights are priced simultaneously, leading to additional revenue gains. Finally, we provide the first in-depth assessment of the practical implications of dynamic pricing for the airline industry. We focus on airline concerns that dynamic pricing could lead to price wars, excessive discounting, and a race to the bottom. We also evaluate some of the potential legal implications and customer reactions that could emerge as dynamic pricing becomes more commonplace. These analyses provide new insight on how airline competition could potentially change as dynamic pricing is integrated into traditional airline processes.
Download or read book Pricing and Revenue Optimization written by Robert Phillips and published by Stanford University Press. This book was released on 2005-08-05 with total page 470 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is the first comprehensive introduction to the concepts, theories, and applications of pricing and revenue optimization. From the initial success of "yield management" in the commercial airline industry down to more recent successes of markdown management and dynamic pricing, the application of mathematical analysis to optimize pricing has become increasingly important across many different industries. But, since pricing and revenue optimization has involved the use of sophisticated mathematical techniques, the topic has remained largely inaccessible to students and the typical manager. With methods proven in the MBA courses taught by the author at Columbia and Stanford Business Schools, this book presents the basic concepts of pricing and revenue optimization in a form accessible to MBA students, MS students, and advanced undergraduates. In addition, managers will find the practical approach to the issue of pricing and revenue optimization invaluable. Solutions to the end-of-chapter exercises are available to instructors who are using this book in their courses. For access to the solutions manual, please contact [email protected].
Download or read book Operationalizing Dynamic Pricing Models written by Steffen Christ and published by Springer Science & Business Media. This book was released on 2011-04-02 with total page 363 pages. Available in PDF, EPUB and Kindle. Book excerpt: Steffen Christ shows how theoretic optimization models can be operationalized by employing self-learning strategies to construct relevant input variables, such as latent demand and customer price sensitivity.
Download or read book Supply Chain Engineering written by Alexandre Dolgui and published by Springer Science & Business Media. This book was released on 2010-06-02 with total page 541 pages. Available in PDF, EPUB and Kindle. Book excerpt: Supply Chain Engineering considers how modern production and operations management techniques can respond to the pressures of the competitive global marketplace. It presents a comprehensive analysis of concepts and models related to outsourcing, dynamic pricing, inventory management, RFID, and flexible and re-configurable manufacturing systems, as well as real-time assignment and scheduling processes. A significant part is also devoted to lean manufacturing, line balancing, facility layout and warehousing techniques. Explanations are based on examples and detailed algorithms while discarding complex and unnecessary theoretical minutiae. All examples have been carefully selected from an industrial application angle. This book is written for students and professors in industrial and systems engineering, management science, operations management and business. It is also an informative reference for managers looking to improve the efficiency and effectiveness of their production systems.
Download or read book Consequences of Dynamic Pricing in Competitive Airline Markets written by Nan Chen and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dynamic pricing is a common tool to maximize sales in markets for perishable goods with limited capacity and stochastic demand. We look at the relationship between dynamic pricing and oligopolistic competition in the airline industry. For this purpose, we estimate the dynamic oligopoly model of dynamic pricing competition in a market with carrier exit using flight-level data. We discover that dynamic pricing results in a Pareto improvement, increasing firm profits and consumer welfare. We break down the impact into two categories: price discrimination and pricing on residual capacity (revenue management). We find that price discrimination softens competition, whereas revenue management intensifies it.
Download or read book The Global Airline Industry written by Peter Belobaba and published by John Wiley & Sons. This book was released on 2015-07-06 with total page 536 pages. Available in PDF, EPUB and Kindle. Book excerpt: Extensively revised and updated edition of the bestselling textbook, provides an overview of recent global airline industry evolution and future challenges Examines the perspectives of the many stakeholders in the global airline industry, including airlines, airports, air traffic services, governments, labor unions, in addition to passengers Describes how these different players have contributed to the evolution of competition in the global airline industry, and the implications for its future evolution Includes many facets of the airline industry not covered elsewhere in any single book, for example, safety and security, labor relations and environmental impacts of aviation Highlights recent developments such as changing airline business models, growth of emerging airlines, plans for modernizing air traffic management, and opportunities offered by new information technologies for ticket distribution Provides detailed data on airline performance and economics updated through 2013
Download or read book Airline Dynamic Offer Creation Using a Markov Chain Choice Model written by Kevin K. Wang and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Customers have become accustomed to real-time dynamic pricing and offer recommendations in retailing and e-commerce. Airline pricing and revenue management is falling behind with its one-size-fits-all approach, where all customers are offered the same static offers and prices. The airline industry developed a roadmap toward dynamic offer creation, which will enable airlines to dynamically bundle and price a set of offers that are customized to a shopping request. Realizing this vision requires advancements in both distribution and science. On the distribution side, these advancements will come with the New Distribution Capability (NDC). On the science side - which is the focus of this dissertation -- little progress has been made despite years of research. Along this roadmap, entirely new price optimization problems and revenue opportunities arise, for which no known solutions exist. For example, the optimization of both ancillary bundle offers and branded fare families becomes increasingly relevant as the airlines gain additional dynamic pricing capabilities. We develop a novel approach to solve these dynamic offer creation problems using a Markov chain choice model (MCCM). We discover that it is particularly suited to solving the bundle pricing problem, which also has potential applications in other industries. We also extend the MCCM to solve joint pricing and assortment optimization problems and estimate MCCM parameters from realistic datasets that an airline could collect through price experimentation. In simulations, we find that our model can increase both ancillary and total revenue over an a la carte baseline pricing model that mimics current industry practice. The MCCM has attractive properties - the resulting offer sets and prices discourage purchases of less profitable offers and nudge customers toward more profitable ones. Our model proposes offers that are most relevant to the customer. Our research also identifies challenges of using the MCCM in practice. We find that parameter estimation becomes challenging with limited data and large offer sets. The assortment optimization problem is also more challenging to solve, given the number of possible offer sets. Our results contain important takeaways about the relative revenue benefits of offer set pricing and offer set selection, and when bundling is most effective.
Download or read book Quantitative Techniques for Competition and Antitrust Analysis written by Peter Davis and published by Princeton University Press. This book was released on 2009-11-16 with total page 1185 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book combines practical guidance and theoretical background for analysts using empirical techniques in competition and antitrust investigations. Peter Davis and Eliana Garcés show how to integrate empirical methods, economic theory, and broad evidence about industry in order to provide high-quality, robust empirical work that is tailored to the nature and quality of data available and that can withstand expert and judicial scrutiny. Davis and Garcés describe the toolbox of empirical techniques currently available, explain how to establish the weight of pieces of empirical work, and make some new theoretical contributions. The book consistently evaluates empirical techniques in light of the challenge faced by competition analysts and academics--to provide evidence that can stand up to the review of experts and judges. The book's integrated approach will help analysts clarify the assumptions underlying pieces of empirical work, evaluate those assumptions in light of industry knowledge, and guide future work aimed at understanding whether the assumptions are valid. Throughout, Davis and Garcés work to expand the common ground between practitioners and academics.
Download or read book The Evolution of Yield Management in the Airline Industry written by Ben Vinod and published by Springer Nature. This book was released on 2021-05-28 with total page 417 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Total Revenue Management TRM written by Marc Helmold and published by Springer Nature. This book was released on 2020-06-03 with total page 201 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book explores total revenue management (TRM), an emerging concept in revenue management that incorporates existing principles and tools of revenue management across all profit streams. It is a professional's guide to using TRM in an optimal and innovative manner to gain competitive advantage. Readers will gain comprehensive insights into the strategies, tools and principles of TRM including existing and emerging revenue streams across the value chain. The author offers a transparent and holistic explanation of pricing strategies, segmentation methods and distribution principles which enable implementation of TRM in organizations.
Download or read book The Future of Pricing written by E. Boyd and published by Springer. This book was released on 2016-04-30 with total page 193 pages. Available in PDF, EPUB and Kindle. Book excerpt: A story about science, technology, and people, The Future of Pricing provides an inside look at how airlines price tickets and how practices developed in the airline industry are now revolutionizing the world of pricing. This book is written for business professionals and students wanting to better understand the rapid growth of scientific pricing.
Download or read book The Airline Industry written by Alessandro Cento and published by Springer Science & Business Media. This book was released on 2008-10-15 with total page 189 pages. Available in PDF, EPUB and Kindle. Book excerpt: The debate on the future of the aviation sector and the viability of its traditional business practices is the core of this book. The liberalization of the EU market in the 1990s has radically modi?ed the competitive environment and the nature of airline competition. Furthermore, the new millennium began with terrorist attacks, epidemics, trade globalization, and the rise of oil prices, all of which combined to push the industry into a “perfect storm”. Airline industry pro?tability has been an elusive goal for several decades and the recent events has only accentuated existing weaknesses. The main concern of ind- try observers is whether the airline business model, successful during the 1980s and 1990s, is now sustainable in a market crowded by low-cost carriers. The airlines that will respond rapidly and determinedly to increase pressure to restructure, conso- date and segment the industry will achieve competitive advantages. In this context, the present study aims to model the new conduct of the ‘legacy’ carriers in a new liberalized European market in terms of network and pricing competition with l- cost carriers and competitive reaction to the global economic crises.
Download or read book Revenue Management written by I. Yeoman and published by Springer. This book was released on 2010-12-08 with total page 290 pages. Available in PDF, EPUB and Kindle. Book excerpt: Pricing is about deciding your market position whereas revenue management is the strategic and tactical decisions firms take in order to optimize revenues and profits. This book offers insights into research, theories, applications and innovations and how to makes these work in different industries.
Download or read book Stochastic Peak Load Pricing With Real Time Demand Learning in the U S Airline Industry written by Diego Escobari and published by . This book was released on 2016 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dynamic pricing and demand learning play an important role in airlines because (1) in low demand flights unsold tickets are of little value after departure, and (2) in high demand flights carriers may forgo important profits if the flight sells out and some relatively high willingness-to-pay consumers have to be rationed. Under a price sensitive demand, stochastic peak-load pricing suggests that at any point prior departure airlines should set higher fares in expected peak flights, where demand is more likely to exceed capacity. Moreover, in order to promote sales, lower fares should be set in expected off-peak flights. Using a unique panel of U.S. airlines fares and seat inventories, this paper shows that airlines learn about the demand as sales progress and the flight date approaches. Forecasted values of occupancy rates and sold out probabilities are employed to calibrate an ex-ante - before sales begin - distribution of demand uncertainty. Nonparametric techniques are then used to construct a latent variable to identify different expected demand states at different points prior departure. This latent variable is utilized to dictate the regime shift in a panel endogenous threshold model. Consistent with the stochastic peak-load pricing predictions, the results show that higher fares are set in the peak regime, while lower fares in the off-peak regime. The results proved to be robust to an alternative specification of a GMM dynamic panel, were the assumption of strict exogeneity is relaxed. This is the first paper to provide formal evidence of stochastic peak - load pricing in airlines or to show that airlines learn about the demand and respond to early sales.
