Research On Pricing Method In Free Sale Of Airline Cargo

Recently, air freight has become a profit growth point that cannot be ignored in the civil aviationindustry. In such an environment, domestic air freight industry are expanding at a fast pace inestablishing infrastructure investment, meanwhile under the influence of foreign airlines enteringChina market, Chinese airlines appears a marginal tendency in the competition.Revenue managementcan increase airlines’ profit and it is a key approach to competitive company. Application of revenuemanagement in air cargo has a broad prospect that can not only develop the profitability of thedomestic freight airlines, but also help the domestic airlines grasp the initiative of the market.This paper focus on the dynamic pricing problem happens during the free-sale operations of airfreight refer to related researches on air freight revenue management. Firstly, research achievementson dynamic pricing were stated in this paper, followed an analysis of the feasibility andappropriateness of its application in air freight under the consideration of characteristics of cargo sale.Secondly, some deterministic air cargo dynamic pricing models were discussed based on differentdemand functions. Considering the uncertain form of demand function, a dynamic pricing model wasbuilt based on neural network, and it was compared with the dynamic pricing models based on threeother deterministic demand models under different datasets. Finally, a robust dynamic pricing modelof air cargo was built based on relative entropy theory in line with uncertainty of parameters ofdemand function. An improved artificial colony algorithm was used to solve the model. Numericalexamples were discussed when parameters in demand function varies.