Title: The other side of revenue management: managing airport infrastructure and airside operations

Authors: Daniel L. Rust; L. Douglas Smith; Dana L. Ryan; Juan Zhang

Addresses: Transportation and Logistics, University of Wisconsin-Superior, Erlanson, Room 105C 801 N. 28th St. Superior, WI 54880, USA ' Center for Business and Industrial Studies, College of Business Administration, University of Missouri-St. Louis, One University Blvd. St. Louis, MO 63121, USA ' St. Louis Lambert International Airport, 10701 Lambert International Blvd., St. Louis, Missouri, 63145, USA ' Logistics and Supply Chain Management, University of Missouri-St. Louis, 211 Express Scripts Hall, St. Louis, MO 63121, USA

Abstract: Revenue management has roots in the marketing of US airline passenger service following the deregulation of the industry in 1978. The business model is largely credited for opening opportunities to low-cost air travel worldwide, but condemned for deleterious effects on service and increased costs to consumers in many markets as industry consolidation occurred and airlines redesigned route and fare structures competitively. In this paper, we discuss the challenges of 'right-sizing' airport infrastructure and managing airside operations effectively in response to airlines' revenue-management practices. An historical review of dramatic changes at St. Louis Lambert International Airport will highlight motivations and risks of large capital expenditures and related revenues. A new analytical model to support adaptive airport planning and management is presented for non-financial measures of airside performance affected by airline revenue-management practices.

Keywords: airport revenue management; airport capacity planning; airport traffic management.

DOI: 10.1504/IJRM.2018.096321

International Journal of Revenue Management, 2018 Vol.10 No.3/4, pp.189 - 215

Received: 10 Mar 2018
Accepted: 06 Apr 2018

Published online: 26 Nov 2018 *

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