Next-Generation Pricing Mechanisms: Implications for Airline RM

In this session, Peter Belobaba presents a framework describing the different mechanisms already under development by airlines - from "dynamic price adjustment" to "continuous pricing" and, ultimately, "dynamic offer generation". Using results from MIT PODS simulations, we show how these mechanisms can lead to revenue gains for implementing airlines, as well as the impacts on competitors.

About the Speaker: Peter P. Belobaba is Principal Research Scientist in the International Center for Air Transportation at the Massachusetts Institute of Technology (MIT), where he teaches graduate subjects on The Airline Industry, Airline Management, and Air Transportation Operations Research. He is Program Manager of MIT’s Global Airline Industry Program and Director of the PODS Revenue Management Research Consortium. Dr. Belobaba holds an MS in Transportation and a Ph.D. in Flight Transportation Systems from MIT. He is a lead author and editor of the recently released book, The Global Airline Industry, 2nd Edition. Dr. Belobaba has been involved in research related to airline economics, pricing, network planning, competition and revenue management since 1985. His doctoral dissertation entitled, “Air Travel Demand and Airline Seat Inventory Management”, is widely recognized as the first Ph.D. thesis published on the topic of airline yield management. He has worked as a consultant on the development, testing and implementation of pricing, revenue management and distribution systems at over fifty airlines and other companies worldwide. He has also published numerous articles in a variety of journals, including Airline Business, Operations Research, Transportation Science, Journal of Revenue and Pricing Management, and Journal of Air Transport Management. In 2016, Dr. Belobaba was awarded the INFORMS Impact Prize for his “pivotal role in the creation and wide-spread adoption of revenue management”.

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