Dynamic Pricing of Airline Upgrade Service Considering Revenue Management

被引：0
|
作者：
Zhao G.-H. [1 ]
Ma C.-A. [1 ]
Zhao Q.-T. [3 ]
Li J.-F. [2 ]
机构：
[1] School of Economics & Management, Civil Aviation University of China, Tianjin
[2] College of Computer Science and Technology, Civil Aviation University of China, Tianjin
[3] Business College, Wake Forest University, Winston-Salem, 27109, NC
来源：
Jiaotong Yunshu Xitong Gongcheng Yu Xinxi/Journal of Transportation Systems Engineering and Information Technology | 2023年 / 23卷 / 03期
基金：
中国国家自然科学基金;
关键词：
air transportation; dynamic pricing; flight revenue; upgrading; utility equilibrium; Weibull distribution;
D O I：
10.16097/j.cnki.1009-6744.2023.03.009
中图分类号：
学科分类号：
摘要：
In order to achieve a win-win situation for passengers and airlines with upgraded services, a utility model of equilibrium between passengers and airlines is constructed based on the utility equilibrium theory. The Weibull distribution function is used to describe the probability of passengers accepting a specific price. And it is embedded into the equilibrium utility model to obtain the dynamic pricing model of upgrade services. To make the model more realistic, price constraints and seat number constraints are added. And it is proved that the optimal price of upgrade service must be within the price constraint range for profit maximization. Finally, this paper conducts a numerical study on the upgrading of a single class and multiple classes and obtains the optimal price of upgrade services for different classes under the two conditions. The benefits of dynamic pricing strategies for airlines are also calculated. The results show that, compared with the traditional static pricing, if airlines take passenger demand utility into account, it can reduce the vacancy rate of airlines' high-end class seats and improve their revenue, but also enable passengers to enjoy the upgrade service at a lower price. In addition, compared with single-class upgrade services, multi-class upgrade services can bring more benefits to airlines. The example analysis shows that the revenue of airlines selling two-class upgrade services is 39.12% higher than that of selling single-class upgrade services. © 2023 Science Press. All rights reserved.
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页码：76 / 84
页数：8
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