Predicting Airfare Prices
نویسنده
چکیده
Airlines implement dynamic pricing for their tickets, and base their pricing decisions on demand estimation models. The reason for such a complicated system is that each flight only has a set number of seats to sell, so airlines have to regulate demand. In the case where demand is expected to exceed capacity, the airline may increase prices, to decrease the rate at which seats fill. On the other hand, a seat that goes unsold represents a loss of revenue, and selling that seat for any price above the service cost for a single passenger would have been a more preferable scenario.
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