Information Technology Reference
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5FinlRemrks
In this paper we have introduced a new optimization model for revenue manage-
ment at low cost airlines which is based on the planning paradigm of assigning
capacities under fixed price schemata. The motivation for introducing this model
was the development that low cost carriers have recently changed their business
model of offering direct flights only to also offering connecting flights. Now, our
model can easily be extended to complex networks with connecting flights. In
a simulation study using real world data we have shown that the model can be
solved rather eciently using standard software. Analyzing different scenarios
with increasing portions of connecting flight bookings it becomes evident that
in such environments RM systems which are based on models for direct flights
only become highly ineffective.
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