An Analysis of Airline Seat Allocation
نویسنده
چکیده
In this paper we consider the airline seat allocation between high and low fares with and without stochastic cancellations. We also analyze the problem of simultaneously determining seat allocation and overbooking levels for two different classes of passengers, which also extends the existing literature in three ways. First, the cost oflost sales, which has been ignored in the existing literature, is explicitly incorporated into the model. Second, the overbooking phenomenon is also explicitly treated. Third, the concept of spill rate is clarified into t.he passenger spill rate and the flight rate. It is found that the results obtained here are in closer agreement with actual airline practice.
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