Dynamic capacity control in cargo revenue management – A new heuristic for solving the single‐leg problem efficiently

While seat inventory control is a standard technique in passenger revenue management (RM) to steer availability and thus prices of passenger seats, far less attention has been paid to dynamically managing cargo bookings. Two technical challenges of cargo RM that drive this contrast are the multi‐dimensional nature of cargo shipments and request sizes featuring multiple capacity units. Because of these characteristics, the exact decision problem is computationally intractable. This article proposes a heuristic for solving the air cargo capacity control problem efficiently while obtaining near‐optimal solutions. A significant reduction of computational load is achieved through exploiting the structure of monotone switching curves.