A study of optimal booking control on a single-stop flight route in the Asia Pacific region

Airlines in the Asia-Pacific Region face rapid economic growth and restriction of route expansion. As a result, many flight routes in the Asia-Pacific region are experiencing demand that far exceeds the capacity of the carrier. To maintain competitiveness, many airlines focus on the optimal utilization of the available resources (namely, the seats on a aircraft) to improve their revenues. Yield management has become an important tool for this purpose. Yield management involves allocating resources to various segments of demand to maximize the total revenue that can be generated, subject to the uncertainty of demand. This paper studies the effectiveness of yield management through optimal booking control for a heavily traversed route in the Asia-Pacific Region. Actual demand on the route is used to develop a simulation model for the study. It is found that the booking control can improve the total revenue by about 8% compared to a first-come, first-served booking policy.