Title: Development of a utility function for airline travel: a logarithmic goal programming approach

Authors: Goutam Dutta; Priyanko Ghosh

Addresses: Department of Production and Quantitative Methods, Wing 03, Indian Institute of Management, Vastrapur, Ahmedabad 380 015, Gujarat, India ' Department of Production and Quantitative Methods, Wing 02, Indian Institute of Management, Vastrapur, Ahmedabad 380 015, Gujarat, India

Abstract: An airline passenger has a number of choices before he/she makes his/her travel decision. Competing airlines are also interested in the preference set of the traveller. Passenger choice modelling is an essential component of any revenue management system. In this paper, we develop a linear utility model for airline travel using a logarithmic goal programming method. The utility score of the competing airlines can help the passengers to choose the best feasible option among several alternatives. The rank can also provide a system of mechanism that compares the competing airlines in a common framework. In addition, we derive the choice probability of the airlines by a multinomial logit choice model which in turn facilitates the airlines to make a relative comparison among them and to estimate the market share.

Keywords: revenue management; utility function; goal programming; multinomial logit choice model; airline passengers; travel decisions; competing airlines; passenger choice modelling; airline travel.

DOI: 10.1504/IJRM.2011.043791

International Journal of Revenue Management, 2011 Vol.5 No.4, pp.277 - 289

Published online: 22 Nov 2011 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article