Title: Evaluating airlines ticket distribution strategies: a simulation-based approach

Authors: Ahmed Abdelghany, Khaled Abdelghany

Addresses: College of Business, Embry-Riddle Aeronautical University, 600 S. Clyde Morris Blvd., Daytona Beach, FL 32114, USA. ' Department of Environmental and Civil Engineering, Southern Methodist University, P.O. Box 750335, Dallas, TX 75275-0335, USA

Abstract: This paper presents a modelling framework to evaluate ticket distribution strategies for commercial airlines. The framework adopts a micro-simulation approach that replicates how prospective travellers select their travel itineraries that are provided through ticket distribution channels. The model simulates travellers| itinerary choices at the disaggregate level and dynamically updates seat availability on the different itineraries. The model examines the trade-offs between two common types of ticket distribution channels: (1) distribution channels with high market penetration and high competition among subscribed airlines (e.g. Travelocity, Expedia, Orbitz) vs. (2) distribution channels with low market penetration and low airlines competition (e.g. aa.com, continental.com).

Keywords: airlines competition; demand; itinerary choice; revenue management; simulation; ticket distribution; modelling; airline tickets; commercial airlines; travel itineraries.

DOI: 10.1504/IJRM.2007.015517

International Journal of Revenue Management, 2007 Vol.1 No.3, pp.231 - 246

Published online: 23 Oct 2007 *

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