Research On Overbooking Policies Of Airline Revenue Management

In recent years, the air transport industry has made rapid development in our country.The competitions of domestic airlines face growing with the globalization of economyand rapid development of “High-speed railway”. In order to survive and develop better,more and more airlines begin to use revenue management system, to improve company’score competitiveness and obtain stable revenues.Ticket overbooking is not only an important content of revenue management, butalso an effective measure to increases income for airlines. This paper focuses on theoverbooking problem of airlines revenue management, research on the overbookingdecisions under the conditions of risk neutral and considering decision maker’s riskpreference. Firstly, the existing revenue management theory and researches review ofoverbooking are summarized fully. Secondly, considering the conditions of risk neutraland decision maker pursue revenue maximization, the optimal overbooking policies undercomplete information and partial information are obtained by establishment andoptimization of the mathematical model. Numerical analysis shows that the overbookingpolicy under partial information is robust strongly, and it can solve the overbookingdecision problem with lack of information. Thirdly, using CVaR risk measurementmethod to weigh the losses and risks under the conditions of considering decision maker’srisk preference, and the optimal overbooking policy is obtained by study the problem ofoverbooking with different risk tolerance level. Finally, the research content andconclusion are summarized, and puts forward the future research direction.Overbooking faces many problems in airlines’ practice, such as what main factorsshould be considered, how to make decision in background of lacking information, howto balance the revenues and risks and so on. The study of this paper provides scientificdecision-making reference and management inspiration for these problems.