 Application of an alternative expected marginal seat revenue method (EMSRc) in unrestricted fare environmentsHossein Tavana and Larry Weatherford Journal of Air Transport Management, 2017, vol. 62, issue C, 65-77 Abstract: We reintroduce an expected revenue maximization formulation for airline seat allocation. We present a numerical method to find the exact solution to the integer programing problem. We further show that when this method is applied to a nested fare structure, it constitutes a heuristic method which has far better performance in an unrestricted fare environment, where fare buckets are completely undifferentiated, compared to EMSRa, EMSRb and EMSRb-MR. With use of simulation, we show that this method can recapture a significant portion of the potential revenue loss when restrictions are removed, while its performance in a fully differentiated environment is only marginally inferior compared to other methods. This method is also applicable to hotels and cruise lines where not only are there fewer “fences†around different offered rates, but also there is a greater tendency for consumers to buy down since most bookings are fully refundable. Keywords: Expected marginal seat revenue (EMSR); Revenue management; Unrestricted fare environment; Airlines; Hotels; Cruise lines; Spiral down; Buy-down (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:62:y:2017:i:c:p:65-77 DOI: 10.1016/j.jairtraman.2017.02.006 Access Statistics for this article Journal of Air Transport Management is currently edited by Anne Graham More articles in Journal of Air Transport Management from Elsevier |
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