Development of a utility function for airline travel: a logarithmic goal programming approach

Goutam Dutta and Priyanko Ghosh

International Journal of Revenue Management, 2011, vol. 5, issue 4, 277-289

Abstract: An airline passenger has a number of choices before he/she makes his/her travel decision. Competing airlines are also interested in the preference set of the traveller. Passenger choice modelling is an essential component of any revenue management system. In this paper, we develop a linear utility model for airline travel using a logarithmic goal programming method. The utility score of the competing airlines can help the passengers to choose the best feasible option among several alternatives. The rank can also provide a system of mechanism that compares the competing airlines in a common framework. In addition, we derive the choice probability of the airlines by a multinomial logit choice model which in turn facilitates the airlines to make a relative comparison among them and to estimate the market share.

Keywords: revenue management; utility function; goal programming; multinomial logit choice model; airline passengers; travel decisions; competing airlines; passenger choice modelling; airline travel. (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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