A network group booking model for airline revenue management

Abstract

Purpose

Airlines use various analytical techniques to optimally control seats in its various fare classes. Most literature on inventory control does not discuss policies for group arrivals. This study aims to address the literature gap in determining an optimal booking policy which considers the dynamics of group behaviour with respect to cancellations and refunds.

Design/methodology/approach

An analytical model by which bid price control mechanism can be applied to group bookings is developed through this study.

Findings

Numerical experiments are performed to demonstrate the analytical model under various scenarios. A comparison of the model with the traditional model indicates an increase in the total revenue generated.

Originality/value

The novelty of this work is in modelling the dynamics of group behaviour in a network of flights, and it contributes to the literature on revenue management.

Citation

Venkataraman, S.V., Kaushik, A. and Mishra, S. (2021), "A network group booking model for airline revenue management", Journal of Modelling in Management, Vol. 16 No. 3, pp. 861-903. https://doi.org/10.1108/JM2-06-2020-0175