Research On Seat Allocation And Dynamic Pricing For Parallel Flights With Multinomial Logit Model

Revenue management originated in the aviation industry. Every airline from theworld has greatly improved its revenue because of the emerging of the theory. Thisarticle mainly studies the seat allocation and dynamic pricing in airline revenuemanagement. With the development of the society, the airline has encountered manychallenges, for example, the diversity of passengers, more flights between the sameorigin and destination, more diversified competition among airlines and so on.The research is based on the diversity of passengers and parallel flights. The airlinewill implement different strategies upon the diversity of passengers and consider howto improve the guest rate of all flights simultaneously upon parallel flights.The passengers are divided into two types in this paper based on the previousresearch of revenue management: price sensitive passengers and time sensitivepassengers. Firstly, dynamic inventory control for parallel flights with MNL model isbuilt which dynamically controls the number of seat for various price grades in orderto maximize the airline revenue. Secondly, dynamic pricing for parallel flights withcustomer-choice model is established, which divides the passengers into two types, anddynamically prices for the business type to maximize the airline revenue. Finally, anintegration of dynamic inventory control and dynamic pricing for parallel flights withMNL model is built, which dynamically controls the number of seat for the tourismtype and dynamically prices for the business type to maximize the airline revenue.Numerical experiment is studied to analyze the relationship between the threshold andthe discounted price; the relationship between optimal price and the number of sold seatand so on. This research enriches the theory system of airline revenue management, andit has practical guiding significance of seat inventory control and pricing for airlinesflight.