Research on the Optimization Strategy of Airline Capacity Sharing under Complex Market Environments

Lei Xu () and Yao Shen ()
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Lei Xu: Civil Aviation University of China, Economics and Management College
Yao Shen: Civil Aviation University of China, Economics and Management College

A chapter in Proceedings of the 2026 4th International Conference on Digital Economy and Management Science (CDEMS 2026), 2026, pp 286-295 from Springer

Abstract: Abstract As a solid bridge spanning the globe, air transport serves as an indispensable key component in the development of modern society. However, behind the growing ease of transportation, airlines are facing the dual pressures of imbalanced capacity supply and demand and fierce price competition. This paper constructs a Stackelberg game model consisting of a leading airline with a larger market size and a following airline with a smaller market size. It investigates capacity-sharing strategies under price and ancillary service competition, considering scenarios of capacity supply-demand imbalance between the two airlines. The results indicate that when the leading airline enhances its ancillary service level, both its own demand and pricing increase, but this tends to inhibit its capacity expansion. Conversely, the following airline can leverage its fuel efficiency advantages to capture market share by expanding capacity under mandatory blending ratio policies. Additionally, increases in cross-service sensitivity and service cost coefficients diminish the leading airline’s willingness to invest in services. This paper provides a theoretical basis and decision-making support for airlines to formulate capacity-sharing strategies in the context of ancillary service competition.

Keywords: Airline capacity sharing; Ancillary services; Stackelberg game (search for similar items in EconPapers)
Date: 2026
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DOI: 10.2991/978-94-6239-699-9_31

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