Modeling passenger disutilities in airline revenue management simulation

Passenger behavior is the fundamental factor driving air transportation market reactions to the managerial decisions of airlines; therefore, it is important to understand passenger path choice process, and to develop a valid model to represent it. In this thesis, passenger disutilities are used to indicate passengers' sensitivity to alternative path options. Accordingly, passenger disutilities have a big impact on airline revenue performances, depending on an airline's revenue management methods and the path options it provides. As an attempt to understand and represent passenger disutilities with an analytical model, this thesis describes the procedure for modeling passenger disutilities based on survey answers from airline experts. Modeling passenger disutilities assumes that they are function of market distances and that they take the form of a distribution. In this thesis, we assume that the passenger disutilities fit a linear function of market index fares in the form of Gaussian distribution for every market. In order to determine appropriate parameters for the model, the survey results obtained from airline experts are used. The coefficients of three disutility functions indicate that path quality and replanning disutilities have greater influence on passenger choice than unfavorite airline disutility does. The Passenger Origin-Destination Simulator is used to test the impact of passenger disutilities on a hypothetical 42-city, hub-and-spoke network. With all disutility functions implemented, the simulation results suggest that the role of airline revenue managements become more important with passenger preference for attractive paths. Also, the relative benefits of Origin-Destination revenue management methods as supposed to Fare Class Yield Management method are higher when passenger disutilities are considered. Among the three disutility components modeled for this thesis, the replanning disutility predominantly drives market response in our hypothetical network.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Aeronautics and Astronautics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2000

Author dc:creator

• Lee, Seonah, 1975-

Advisor dc:contributor.advisor

• Peter Paul Belobaba.

• Aeronautics and Astronautics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/32185

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/32185