Title: Recent developments in demand forecasting for airline revenue management

Authors: Catherine Cleophas, Michael Frank, Natalia Kliewer

Addresses: DS&OR Lab, Universitat Paderborn, Warburger Str. 100, Paderborn 33098, Germany. ' Deutsche Lufthansa AG, FRA ID/I-M, Lufthansa Aviation Center, Frankfurt am Main 60546, Germany. ' DS&OR Lab, Universitat Paderborn, Warburger Str. 100, Paderborn 33098, Germany

Abstract: Revenue management for airlines strives to maximise revenue as the sum of fares earned through customer bookings. Since the internet enables customers to make more informed choices and low-cost carriers introduced the concept of restriction-free fares, forecasting for airline revenue management has faced new challenges. In addition, advances in dynamic pricing allow for a more sophisticated approach to pricing, but also ask for more information on customer reactions. This paper summarises recent developments in demand forecasting with regard to the prediction of demand in the airline industry. A classification by demand arrival, level, detruncation and behaviour is applied.

Keywords: airline revenue management; demand models; demand forecasting; revenue management; simulation; airlines.

DOI: 10.1504/IJRM.2009.027386

International Journal of Revenue Management, 2009 Vol.3 No.3, pp.252 - 269

Available online: 21 Jul 2009 *

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