Download or read book Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances written by Demet Çetiner and published by Springer Science & Business Media. This book was released on 2013-04-03 with total page 180 pages. Available in PDF, EPUB and Kindle. Book excerpt: ​A major problem arising in airline alliances is to design allocation mechanisms determining how the revenue of a product should be shared among the airlines. The nucleolus is a concept of cooperative game theory that provides solutions for allocating the cost or benefit of a cooperation. This work provides fair revenue proportions for the airline alliances based on the nucleolus, which assumes a centralized decision making system. The proposed mechanism is used as a benchmark to evaluate the fairness of the revenue sharing mechanisms, where the alliance partners behave selfishly. Additionally, a new selfish revenue allocation rule is developed that improves the performance of the existing methods.

Download or read book Revenue Management for Airline Alliances written by Jérémy François Jean Darot and published by . This book was released on 2001 with total page 168 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Selfish Revenue Sharing Mechanisms for Airline Alliances written by Demet Çetiner and published by . This book was released on 2011 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Airline Alliance Revenue Management written by Alyona Michel and published by . This book was released on 2012 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: Airlines participating in alliances offer code share itineraries (with flight segments operated by different partners) to expand the range of origin-destination combinations offered to passengers, thus increasing market share at little cost. The presence of code share flights presents a problem for airline revenue management (RM) systems, which aim to maximize revenues in an airline's network by determining which booking requests are accepted. Because partners do not jointly optimize revenues on code share flights, alliance revenue gains from implementing advanced RM methods may be lower than an individual airline's gains. This thesis examines seat availability control methods that alliance partners can adopt to improve the total revenues of the alliance without formally merging. Partners share information about the opportunity costs to their network, called "bid prices", of selling a seat on their own flight leg, a mechanism termed bid price sharing (BPS). Results show that BPS methods often improve revenues and work best for networks with certain characteristics and partners with similar RM systems that exchange recently calculated bid prices as often as possible. Gains are typically only achieved if both alliance partners participate in the code share availability decision (called dual control) rather than one partner only, but implementation of dual control is more difficult for airlines in practice. In the best case scenario, gains of up to .40% where achieved, which can translate into $120 million per year for the largest airlines. In our simulations, BPS with dual control and frequent bid price calculation and exchange was the only method that produced consistently positive revenue gains in all the scenarios tested. Therefore, alliance airlines must consider the trade off between revenue gains and implementation difficulties of more frequent bid price exchange or dual control.

Download or read book Operations and Service Management Concepts Methodologies Tools and Applications written by Management Association, Information Resources and published by IGI Global. This book was released on 2017-11-30 with total page 1812 pages. Available in PDF, EPUB and Kindle. Book excerpt: Organizations of all types are consistently working on new initiatives, product lines, and workflows as a way to remain competitive in the modern business environment. No matter the type of project at hand, employing the best methods for effective execution and timely completion of the task is essential to business success. Operations and Service Management: Concepts, Methodologies, Tools, and Applications is a comprehensive reference source for the latest research on business operations and production processes. It examines the need for a customer focus and highlights a range of pertinent topics such as financial performance measures, human resource development, and business analytics, this multi-volume book is ideally designed for managers, professionals, students, researchers, and academics interested in operations and service management.

Download or read book Dynamic Revenue Management in Airline Alliances written by Christopher P. Wright and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Major airlines are selling increasing numbers of interline itineraries, in which flights operated by two or more airlines are combined and sold together. One reason for this increase is the rapid growth of airline alliances, which promote the purchase of interline itineraries and therefore virtually extend the reach of each alliance member's network. This practice, however, creates a difficult coordination problem: each member of the alliance makes revenue management decisions to maximize its own revenue, and the resulting behavior may produce sub-optimal revenue for the alliance as a whole. Airline industry researchers and consultants have proposed a variety of static and dynamic mechanisms to control revenue management decisions across alliances (a dynamic mechanism adjusts its parameters as the number of available seats in the network changes). In this paper, we formulate a Markov-game model of a two-partner alliance that can be used to analyze the effects of these mechanisms on each partner's behavior. We begin by showing that no Markovian transfer pricing mechanism can coordinate an arbitrary alliance. Next, we examine three dynamic schemes, as well three forms of the static scheme widely used in practice. We derive the equilibrium acceptance policies under each scheme and use analytical techniques, as well as numerical analyses of sample alliances, to generate fundamental insights about partner behavior under each scheme. The analysis and numerical examples also illustrate how certain transfer price schemes are likely to perform in networks with particular characteristics.

Download or read book Network Revenue Management Under Competition Within Strategic Airline Alliances written by Waldemar Grauberger and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Aviation competition effects on consumers from domestic airline alliances vary report to congressional requesters written by and published by DIANE Publishing. This book was released on with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Strategic Airline Alliances and Restrictions of Competition by Object Under EU Competition Law written by Ádám Remetei-Filep and published by . This book was released on 2013 with total page 650 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this thesis, the question is asked whether, in the light of the 'more economic approach' adopted in recent years, it is correct to classify metal-neutral revenue-sharing airline alliances as restrictive of competition by object and interpret this concept in a wider sense under Article 101(1) TFEU. By relying on the example and analysis of airline alliances and in particular metal-neutral revenue-sharing alliances, the thesis argues that the 'orthodox' or wider interpretation of restriction by object is correct and, as such, does not contradict the idea behind the more economic approach of EU competition law. However, the analysis of restriction by object has to take into account the effects of Article 101 TFEU as a whole, including Article 101(3) TFEU. Therefore this wider interpretation of object restrictions must be complemented by a realistic application of Article 101(3) TFEU, in order to achieve the desired outcome of an administrable and efficient enforcement regime that minimises error costs. This is a legal thesis. It will review the EU competition law approach to airline alliances and use the example of airline alliances to explore the issue of restriction by object and its interaction with Article 101(3) TFEU. The thesis examines both from an economic and legal point of view all those aspects of strategic alliances, air transport and strategic airline alliances that are essential for a thorough understanding of their characteristics when analysed under Article 101(1) and 101(3) TFEU. The research question concentrates on the dichotomy of Article 101 TFEU, and it is concluded that the experience of the aviation industry supports the thesis.

Download or read book Modeling and Analysis of Revenue Management in Airline Alliances written by Christopher Pember Wright and published by . This book was released on 2010 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt: "From the most basic code-share agreements to the largest international alliances, airlines are using itineraries that bundle seats on their own flight legs with those of other airlines as a way to generate more revenue. With this growing practice comes an increasing need for researchers to look at how airlines can best manage the sharing of revenue between the airlines involved. This dissertation represents a first step toward meeting that need. In three chapters, we model and analyze the process of revenue management in airline alliances. In Chapter 2, we begin by creating a model for the revenue management decisions faced by two partners in an alliance. We formulate a finite-horizon Markov game, over which the two airlines make accept/deny decisions on requests for itineraries on not only their own networks, but on their partners' networks, as well. The key distinctions between our model and previous single network models are the presence of gaming mechanics and the existence of both intraline itineraries - those on a single airline's network - and interline itineraries - those on both partners' networks. This model is used as the basis for the remainder of the dissertation and also can serve as the framework for any future research in the area. In the remainder of Chapter 2, we examine the game of complete information, in which both partners know each other's demand and revenue forecasts, as well as their inventory levels. Specifically, we consider three dynamic schemes that change the revenue shares received by each airline over the horizon based on the state of the system, and contrast them with existing static schemes with fixed revenue shares. We determine the equilibrium behavior for each scheme and provide insight into when each may perform well. We then show that, while well selected static schemes can perform similarly well, the dynamic schemes are far less susceptible to changes in the demand faced by the alliance. In Chapter 3, we acknowledge the limitations of the complete information assumption due to legal, computational and competitive reasons, and focus on a game of incomplete information, in which partners do not know each other's inventory levels or forecasts. We only allow them to share bid prices, a commonly calculated quantity in modern revenue management systems. Through the selection of particular sharing scheme and a clever heuristic assumption, we are able to decouple the alliance problem into two single network problems connect by the posted bid prices. The assumption - that the partner's bid prices will remain constant over the horizon - is loosely based upon a result in the literature that is supported by numerical simulation. We show that the application of this heuristic leads to very favorable results despite the limited information shared between the partners. In addition, because it decouples perfectly into single network problems, any one of the numerous existing approximation schemes for that problem can be employed. This is particularly beneficial since many of the approximation methods are already being utilized in practice, facilitating the adoption of our heuristic for handling interline itineraries. In Chapter 4, we take the constant bid price assumption one step further, looking at its application in the single airline network problem. We describe some schemes from the literature that are logically consistent with the schemes shown in Chapter 3. We also provide a new approximation method that in sample problems is shown to provide high performance (% of optimal revenue) and stable bid prices. This scheme utilizes a simultaneous-perturbation stochastic approximation method in searching for the optimal vector of bid-prices. After examining their relative performance in the single-network environment, we point out the characteristic of these schemes that may lend themselves to performing well when combined with the decoupling alliance heuristics provided in Chapter 3. Simulations of these schemes suggest that these characteristics can have greater influence on alliance revenues than the performance of the schemes in single networks"--Leaves v-vi.

Download or read book An Option Based Revenue Management Procedure for Strategic Airline Alliances written by Michaela Graf and published by . This book was released on 2009 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Fair Adjustment Strategies for Airline Revenue Management and Reservation Systems written by Yin Shiang Valenrina Soo and published by . This book was released on 2007 with total page 95 pages. Available in PDF, EPUB and Kindle. Book excerpt: (Cont.) The goal of this thesis is to provide a more comprehensive investigation into the effectiveness of fare adjustment as a tool to improve airline revenues in this new environment by 1) extending the investigation of the effectiveness of fare adjustment with standard forecasting to leg-based RM systems (namely EMSRb and HBP) and also a mixed fare structure where different fare structures are used for different markets, and 2) looking at the alternative use of fare adjustment in the reservation system. Experiments with the Passenger Origin-Destination Simulator demonstrate that RM Fare Adjustment with standard forecasting can improve an airline's network revenue by 0.8% to 1.3% over standard revenue management methods. In particular, RM Fare Adjustment reduces the aggressiveness of path forecasting through the lowering of bid prices as it takes into account the risk of buying-down. Simulations of Fare Adjustment in the Reservation System also showed positive results with revenue improvement of about 0.4% to 0.7%.

Download or read book Effects of Concession Revenue Sharing Contracts and Airline Alliances in Airport Competition written by Adrián Nerja and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Revenue Sharing in Airline Alliance Networks written by Yuntong Wang and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Economics of Airline Alliances written by Xin Xie and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation constitutes two essays in the field of industrial organization. Specifically, the research focuses on empirically assessing the market effects of airline alliances. The first essay examines how codesharing, a form of strategic alliances, by airlines affects market entry decisions of potential competitors. Researchers have written extensively on the impact that strategic alliances between airlines have on airfare, but little is known of the market entry deterrent impact of strategic alliances. Using a structural econometric model, this essay examines the market entry deterrent impact of codesharing between incumbent carriers in U.S. domestic air travel markets. We find that a specific type of codesharing between market incumbents has a market entry deterrent effect to Southwest Airlines, but not other potential entrants. Furthermore, we quantify the extent to which market incumbents' codesharing influences market entry cost of potential entrants. The second essay examines the effects of granting Antitrust Immunity (ATI) to a group of airlines. Airline alliance partners often want to extend cooperation to revenue sharing, which effectively implies joint pricing of their products (explicit price collusion). To explicitly collude on price, airlines must apply to the relevant government authorities for ATI (U.S. Department of Justice and Department of Transportation in the case of air travel markets that have a U.S. airport as an endpoint), which effectively means an exemption from prosecution under the relevant antitrust laws. Whether consumers, on net, benefit from a grant of ATI to partner airlines has caused much public debate. This essay specifically investigates the impact of granting ATI to oneworld alliance members on their price, markup, and various measures of cost. The evidence suggests that the grant of ATI facilitated a decrease in partner carriers' marginal cost, and increased (decreased) their markup in markets where their service do (do not) overlap. Furthermore, member carriers' price did not change (decreased) in markets where their services do (do not) overlap, implying that consumers, on net, benefit in terms of price changes.

Download or read book Alliance Revenue Management in Practice written by Himanshu Jain (S.M.) and published by . This book was released on 2011 with total page 142 pages. Available in PDF, EPUB and Kindle. Book excerpt: The primary motivations for the formation of airline alliances have been to increase revenues and decrease costs for alliance partners. A major advantage comes through increase in the number of destinations served by an airline at little costs, by using codesharing. Airlines share seat inventory on each other's codeshare flights which complicates their revenue management practice and leads to sub optimal revenue gains. This thesis analyzes the challenges related to alliance revenue management in practice and proposes innovative and feasible solutions to increase revenues for the combined alliance. The four key dimensions of the alliance revenue management problem are analyzed: recording & forecasting, seat allocation method or optimizer, codeshare valuation in the optimizer and availability control of codeshare bookings. The performance of different techniques is quantified using the Passenger Origin-Destination Simulator (PODS). It is found that sharing of information between partners to different degrees can be used to improve revenues. A new valuation scheme called dynamic valuation is developed in an effort to increase the combined alliance revenues by using bid price sharing, a method of sharing information related to codeshare legs. Dynamic valuation leads to additional revenue gains in the range of 0.30% to 0.50% over other techniques. This can translate into an incremental revenue gain, up to $ 100 M per year, for larger airlines in alliance partnerships. Dynamic valuation also provides a basis for further development of models related to revenue sharing proportions of alliance partners. The challenges and risks involved in implementing dynamic valuation are discussed.

Download or read book The Effect of Airline Alliances in Civil Aviation on Fair Competition written by Itumeleng Mogashoa and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the late 1990s, global network airlines have enrolled in one of the three existing global alliances (GAL) namely the Sky-Team, Star Alliance and Oneworld. By 2011, the airlines in the alliance dominated over two-thirds of all international traffic. This research seeks to examine the legal and economic analysis, and consequent interpretation of airline alliances within civil aviation and how this affects fair competition. The evolution of global airline alliances is characterised by the analysis of their size, as well as the volume of the partnership and code-share agreement between the alliances. The findings of this study indicate that the aviation international regulatory framework recognises that these principles have thus far been enacted and applied throughout the legal and/or regulatory instruments. However, with the ever-expanding commercial aviation industry, the desire for business growth and regulatory framework are not always aligned. Airline alliances have proved to be cost-effective and efficient and enabled passengers to reach their designation on schedule. Furthermore, they have also enhanced fair competition in the airline industry with the result that the market now operates more effectively. This research recommends that airline alliances should be allowed, but that competition regulatory authorities must be empowered to scrutinise them and closely monitor the conditions imposed on the alliance to ensure the protection of the smaller players in the industry and any anti-competitive effects mitigated adequately. The regulatory competition bodies should lay out policies and procedures encouraging fair competition in the industry by seeking to eliminate unfair and procedurally flawed barriers and consideration given to the fundamental benefits to be enjoyed by the businesses and stakeholders alike in the formation and existence of these alliances.