Airline Alliance Revenue Management Game

Demet Çetiner

Chapter Chapter 5 in Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances, 2013, pp 73-82 from Springer

Abstract: Abstract In this chapter, the revenue sharing problem of strategic passenger airline alliances is modeled as a cooperative game. Firstly, a linear programming model is proposed to find the maximum expected revenue for any set of cooperating airlines. Then, a numerical example is presented to show that simple revenue sharing rules do not guarantee the stability of an airline alliance, and there is a need for a more sophisticated approach. In Sect. 5.2, the properties of the airline alliance revenue management game are investigated. Afterwards, it is shown that the game is balanced and has a non-empty core. Finally, in Sect. 5.4, the Owen set of the game is analyzed and it is demonstrated that the nucleolus cannot always be obtained through dual optimal solutions. This chapter is based on Kimms and Çetiner (2012).

Keywords: Airline Alliances; Optimal Dual Solution; Cooperative Game; Linear Programming Model; Flight Legs (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-642-35822-7_5

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DOI: 10.1007/978-3-642-35822-7_5

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