Optimal airline seat inventory control for multi‐leg flights

Abstract

Airline seat inventory control is about “selling the right seats to the right people at the right time”. In this paper, the problem of determining optimal booking policy for multiple fare classes in a pool of identical seats for multi‐leg flights is considered. During the time prior to departure of a multi‐leg flight, decisions must be made concerning the allocation of reserved seats to passengers requesting space on the full or partial spans of the flight. It will be noted that in the case of multi‐leg flights the long‐haul passengers are often unable to obtain seats because the shorter‐haul passengers block them. For large commercial airlines, efficiently setting and updating seat allocation targets for each passenger category on each multi‐leg flight is an extremely difficult problem. This paper presents static and dynamic models of airline seat inventory control for multi‐leg flights with multiple fare classes, which allow one to maximize the expected contribution to profit. The dynamic model uses the most recent demand and capacity information and allows one to allocate seats dynamically and anticipatorily over time.

First Published Online: 14 Oct 2010