Customized airline offer management: a conceptual architecture

Daniel Schubert (), Christa Sys and Rosário Macário
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Daniel Schubert: Universiteit Antwerpen
Christa Sys: Universiteit Antwerpen
Rosário Macário: Universiteit Antwerpen

Journal of Revenue and Pricing Management, 2022, vol. 21, issue 5, No 7, 553-563

Abstract: Abstract Revenue management (RM) has been a strategic priority for airlines for decades. More recently, ancillary revenues and targeted offers for diverse customers have become increasingly relevant. Hence, airlines need to evolve their RM into offer management, complementing flight pricing with dynamic bundling, ancillary pricing and assortment. This research designs a conceptual architecture for customized real-time offer management, expanding on existing literature in several directions. It develops a machine learning framework for highly granular customer segmentation, whilst addressing three potential challenges of data sparsity, curse of dimensionality, and model understandability. The research aims to enhance customer satisfaction through customized offers and improve pricing decisions through more granular willingness-to-pay estimation.

Keywords: Offer management; Revenue management; Customer segmentation; Dynamic bundling; Ancillary pricing; Dynamic pricing; Machine learning (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1057/s41272-021-00358-3

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