Research Of Shandong Airlines’ Flight Operating Revenue Management

Revenue management is one of the most important methods to get profit of airlines. Revenue management is more important than the other methods including market segmentation, service improvement and capacity optimization, it is determined by the features of the air transport industry such as variability of passengers, fixed capacity and multi-class fares. Revenue management has been through a long term of development since it was firstly used in U.S. Airline industry.Price war has been a usual phenomenon after the relaxation of price controls in2002. As small Airlines, if Shandong Airlines couldn’t take the right strategy, it will take a big loss during the competition with other Airlines. Therefore, how to use revenue management to improve Shandong Airlines’profitability has becoming the focal point of marketing and management work.This paper discusses overbooking, network optimization and group auction based on three kinds of revenue management researches which are quality, price and demand. Using Shandong Airlines’actual data, this paper built an overbooking model and a network revenue optimization model. This paper also tried to find a mode of selling group tickets by internet auction.This paper mainly discusses how to use revenue management techniques in specific works. Firstly we discuss how to use overbooking in Shandong Airlines’specific works to make more profit. Overbooking is a very effective way to make profit, which has been proved by many Airlines. Secondly we discuss what kind of strategies can help Shandong Airlines achieve network revenue optimization since network revenue optimization has been most Airlines’target and the future of revenue management research. Group passengers bring considerable money for Airlines, how to improve the technique of group passenger management is a focal point to Airlines. Therefore, we discuss a mode of selling group tickets by internet auction.