A next generation approach to estimating customer demand via willingness to pay

Price‐driven passenger behavior has been addressed in many different ways over the last several years. These approaches tend to utilize the availability of classes (or more generally, availability of choice sets) to isolate passenger’s buying behavior and address spiral down/fare dilution. The new approach will instead examine only the products purchased and the prices paid, to isolate passenger priceable demand behavior. In this article, we will cover the concepts and the underlying statistical forecast model and show examples of the willingness to pay method in practice.