Pricing Bundles for Airline Revenue Management
1 : Centre dÉnseignement et de Recherche en Mathématiques et Calcul Scientifique
Ecole des Ponts ParisTech
2 : ENPC - CERMICS
École des Ponts ParisTech (ENPC)
3 : LIPN - Université Paris Nord
université Paris 13
Revenue management (RM) has become a critical asset for airlines performances. The common RM strategy used to be capacity based, but the industry gradually started to move to dynamic pricing RM, where the notion of class is no longer used and prices are freely chosen in real time. Recent airline marketing strategies are trying to push the purchase of ancillaries and the main challenge lays in the choice of which bundles to show, given that there is a combinatorial number of possible ancillaries groups. We proposed an efficient way to calculate the bundle subset which maximize the revenue.