Title: On airlines code-share optimisation: a modelling framework and analysis

Authors: Ahmed Abdelghany, Worachat Sattayalekha, Khaled Abdelghany

Addresses: College of Business, Embry-Riddle Aeronautical University, 600 S. Clyde Morris Boulevard, Daytona Beach, FL 32114, USA. ' College of Business, Embry-Riddle Aeronautical University, 600 S. Clyde Morris Boulevard, 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 an optimisation-based modelling framework for evaluating the profitability of an operating carrier|s code-share agreements with multiple partnering carriers. The model examines the terms of under-negotiation agreements including flights and the number of seats open for code-share and associated fare discounts. The model provides a recommendation of the set of agreements to be accepted by the air carrier. The model explicitly considers the trade-off between the different agreements as well as the trade-off between the incremental revenue from the code-share agreements and the potential loss of revenue due to the displacement of the non-code-share passengers. A set of experiments that illustrate the model capabilities for hypothetical code-share scenarios is presented.

Keywords: air carriers; airlines; code sharing; code-share agreements; revenue management; optimisation based modelling; simulation.

DOI: 10.1504/IJRM.2009.027389

International Journal of Revenue Management, 2009 Vol.3 No.3, pp.307 - 330

Published online: 21 Jul 2009 *

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