A Research Of Revenue Sharing Model In Airline Alliances

With the enlargement of the scale, airline alliance gets a huge increase in revenue andtraffic, which in turn makes the study of airline alliance more and more important inairline revenue management. A question arises in this circumstance, how to distribute therevenue gained from the alliance fairly among the partner airlines, which aims to ensure theshare of partner airlines and the stability of the alliance. The research become an emergingdirection and also become an attraction of this paper.This paper takes revenue sharing of airline alliance as the study object. Combined withthe form and feature of alliance, this paper deeply researches the determination of transferprice in code-sharing with linear programming as the method, airline alliance andcode-sharing analysis as the foundation.Firstly, this paper summaries the development status of revenue management andairline alliance, and then points out the drawback and inadequate of existing researches.Secondly, the development status, composition and join motivation of airline allianceare detailed analyzed in the thesis. It finds out that code-sharing is the most prevalent formof alliance and it may produce reallocation of the revenue among partner airline withtransfer price. Then the paper classified analyses the calculation of transfer price.Thirdly, on the basis of analysis above, this paper builds central and decomposedrevenue sharing model on linear programming, take pay costs into account, and then add itto the decomposed revenue sharing model in order to make the model fit partner airlinesbetter.Last, this paper makes thorough numerical analysis in revenue sharing model. Theanalysis shows that compared with the central model, the decomposed revenue sharingmodel brings some slightly negative influence to the alliance revenue. In the meantime, asto the central revenue sharing model，this paper analyses the influence of prices, flight legs,itineraries to the transfer price.