Personalization in airline revenue management: An overview and future research prospects.


Güner E.

12th International NCM Conference: New Challenges in Industrial Engineering and Operations Management, Ankara, Turkey, 11 - 12 September 2018, pp.108

  • Publication Type: Conference Paper / Summary Text
  • City: Ankara
  • Country: Turkey
  • Page Numbers: pp.108
  • Gazi University Affiliated: Yes

Abstract

Airline revenue management (RM) focuses on the optimization of booking process to accept a reservation with the right conditions at the right time for the right fare for a future flight. Historically, academics have developed overbooking, single-leg seat inventory and origin-destination control, dynamic pricing, and forecasting models with a target to maximize airline revenues. Airlines have applied reservation limits to their seat inventories and tried to determine the number of seats for each fare class to increase their revenue gains. However, limitations on technology (e.g., distribution systems and access to passenger information) prevented airlines to generate customized offers to customers. Recent advances on technology, such as increasing usage of direct channels (i.e., internet) and International Air Transport Association’s New Distribution Capability, will soon provide consumers to encounter specialized offers in the booking process. Therefore, the aim of this study is to provide a survey for personalization in airline RM. In operations research, personalization in airline RM has been studied since 2009 by applying dynamic pricing models in general, and it is relatively a new area of research. For this reason, this study will cover a brief introduction to airline RM, and a systematic review of existing research will be conducted for the personalization in airline RM in operations research. It will also suggest a number of possible directions for future research.