Research On Seat Inventory Control And Revenue Allocation In Airline Alliance

As the scale economy and network economy of airline alliance, more and more airlines are joining airline strategic alliances so as to meet with competitive market environment better. With the enlargement of the alliance, its revenue and market shares increase every day, gradually making the revenue management a hot issue among airline alliances. Cooperation represents both opportunities and challenges, and how to maximize revenues has been a key problem for airlines. In this paper, seat inventory control and revenue allocation for airline alliance are analyzed and a scientific and effective revenue management method is tried to establish.Firstly, this paper summarizes the overseas and domestic research status of seat inventory control and revenue allocation for airline alliance. Demand forecasting, optimal control and revenue allocation for airline alliance are discussed from a revenue management perspective. Research results about airlines' seat inventory control and revenue allocation in other fields are analyzed emphatically.Secondly, the characteristic of complementary alliance and its revenue management are analyzed. In combination with seat inventory control method of single flight leg discrete dynamic programming model, decentralized discrete dynamic seat inventory control model for airline alliance based on allocated fare is established. According to the practical example, the method of decentralized dynamic seat inventory control and mode of fare allocation are analyzed.Finally, revenue allocation in airline alliance is analyzed with cooperative game concept. Nash bargaining solution, Shapley value and minimum nucleolus are discussed. Modifier is introduced and two improved models are established —Nash bargaining solution with a modification factor and Weighted revenue allocation model based on relative revenue. Practical examples are given to show the effectiveness.