Craig HOPPERSTADT

Market/Airline/Class Revenue Management

In the twenty-odd year history of airline Revenue Management there has been a relatively steady progression in the sophistication of forecasting and optimization methodologies. Unfortunately, this progress has not been matched with parallel improvements in the modeling of the underlying phenomena (passengers choosing path/classes). The initial assumption of independent leg/class demand was followed by the assumption of independent path/class demand. With some small variations, the latter remains embedded in the current state of the RM art. If the ultimate goal is to base RM systems on the assumption of independent market demand, then this paper represent a step in that direction describing an approach to incorporating the assumption of independent market/airline/class demand. Results are provided from studies using PODS (Passenger Origin/Destination Simulator).