Airline Revenue Management - Revenue Maximization through Corporate Channel

Abstract

This paper explains an empirical model that has been developed to arrive at the Best Possible Fare (BPF) for all the ad-hoc requests made by the corporate passengers. For the purpose of this research, a corporate request is considered ad-hoc if the booking request is initiated after the corporate channel for the particular flight is closed. By charging the best possible fare, the airline will be able to marginally increase its revenue without deviating from the guidelines of the corporate channel. This model updates itself with the available capacity at the time when the ad-hoc request is initiated, also considers the previous booking data to forecast the passenger demand and the channel behavior. This will lessen the manual intervention and its associated errors, and will take care of the number of corporate requests that can be approved and size of the corporate booking requests that can be approved. As the factors affecting the booking trend of the airlines have been covered earlier in various research papers as discussed in the literature review, we have directly focused on deriving the empirical solution in this paper.

Keywords: Revenue Management, Best Possible Fare, Forecasting, Airlines, Corporate Passengers, Sales Channel

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