Leg-based heuristic methods to network seat inventory control

Abstract

Driving the development of increasingly sophisticated methods of seat inventory control are the complex fare and route structures evident in airline operations today. Most control methods are currently based on an individual flight leg level. However, with the increased presence of multi-leg traffic flows, it becomes necessary to extend control methods beyond the flight leg level in order to maximize network revenues. While utilizing a full network optimization approach is not a suitable solution to satisfying airline desires for immediate revenue gains, the development of leg-based network seat inventory control algorithms is viewed as an applicable alternative approach. In this thesis, two distinct components of seat inventory control are addressed. First, control structures that recognize multi-leg traffic flows are introduced and incorporated into leg-based network seat inventory control algorithms. Secondly, the development of local displacement cost logic is made and implementation issues within existing and newly developed control algorithms are explored. In order to quantify the effectiveness of inventory control algorithms to provide incremental revenue gains over existing control methods, an optimization/booking simulation was utilized to test the performances of these algorithms under a variety of demand patterns. Extensive simulation results in addition to discussions on practical implementation issues of different control approaches are made within the thesis.