Inhaltszusammenfassung

Common wisdom in airline revenue management holds that selling more seats than the capacity on a given flight is the only way to compensate for customers who either cancel their bookings or fail to show up for the flight. The paper first examines the economic rationale behind the no-overbooking policy of Europe's leading low-cost airline Ryanair. By using the inverse newsvendor framework we determine optimal overbooking limits based on estimates of the marginal revenue and no-show rates of Ry...Common wisdom in airline revenue management holds that selling more seats than the capacity on a given flight is the only way to compensate for customers who either cancel their bookings or fail to show up for the flight. The paper first examines the economic rationale behind the no-overbooking policy of Europe's leading low-cost airline Ryanair. By using the inverse newsvendor framework we determine optimal overbooking limits based on estimates of the marginal revenue and no-show rates of Ryanair and Lufthansa respectively and we also evaluate the impact of increased European denied boarding compensations (EC-Regulation 261/2004). The paper then focuses on the revenue potential of incorporating passengers' willingness to pay into the overbooking decision. Today, overbooking models in commercial revenue management systems balance the risk and associated costs of empty seats and denied boardings using constant spoilage costs during the booking period. We examine time-dependent spoilage costs as an extension of the static overbooking model. Our simulation results with Lufthansa data indicate that considering the dynamics of passengers' willingness to pay in the overbooking decision leads to consistent gains in net revenue. Airline Overbooking Considering Passengers' Willingness to Pay (PDF Download Available). Available from: https://www.researchgate.net/publication/229012804_Airline_Overbooking_Considering_Passengers'_Willingness_to_Pay [accessed Jun 9, 2017].» weiterlesen» einklappen

Autoren

Klassifikation

DDC Sachgruppe:
Wirtschaft