Article ID: | iaor201330 |
Volume: | 4 |
Issue: | 4 |
Start Page Number: | 320 |
End Page Number: | 330 |
Publication Date: | Dec 2012 |
Journal: | Service Science |
Authors: | Fragnire Emmanuel, Moresino Francesco, Lombardi Angela |
Keywords: | pricing |
We propose a new integrated model for pricing airline tickets that takes into account the perceived value of multiple services associated with a given flight. For instance, clients perceive benefits on different attributes such as refund options, baggage allowances, time slots, days of operations, Web check‐in services, as well as airline brand. These elements of perceived values are not, to our knowledge, modeled in existing yield management systems. Our integrated model includes a classical aggregate planner for services as well as a share of choice. In this paper, we have worked closely with an airline company and provided it with relevant managerial recommendations.