IDEAS home Printed from https://ideas.repec.org/a/inm/orinte/v19y1989i4p10-19.html
   My bibliography  Save this article

Booking Control Increases Profit at Scandinavian Airlines

Author

Listed:
  • Jens Alstrup

    (Ramboell and Hannemann Ltd., Consulting Engineers and Planners, Teknikerbyen 38, DK-2830 Virum, Denmark)

  • Sven-Eric Andersson

    (Scandinavian Airlines, Department STOAY, S-16187 Stockholm, Sweden)

  • Søren Boas

    (Peter Matthiesen Ltd., Transformervej 14, DK-2730 Herlev, Denmark)

  • Oli B. G. Madsen

    (IMSOR, The Institute of Mathematical Statistics and Operations Research, The Technical University of Denmark, DK-2800 Lyngby, Denmark)

  • René Victor V. Vidal

    (IMSOR, The Institute of Mathematical Statistics and Operations Research, The Technical University of Denmark, DK-2800 Lyngby, Denmark)

Abstract

Planes are overbooked to avoid empty seats. Yet, there is a trade-off of increased upgradings, downgradings, and denied boardings. The patterns of reservations, cancellations, and no-shows are random. Thus, determining the best overbooking levels involves stochastic multistage optimal decision making and time series analysis. An overbooking model for a nonstop flight with two types of passengers is based on a statistical description of the booking process and two-dimensional stochastic dynamic programming. It produces, apparently for the first time, an optimal policy for a real case. The model has been validated and used at Scandinavian Airlines. The net potential revenue increase was about two million US dollars per year.

Suggested Citation

  • Jens Alstrup & Sven-Eric Andersson & Søren Boas & Oli B. G. Madsen & René Victor V. Vidal, 1989. "Booking Control Increases Profit at Scandinavian Airlines," Interfaces, INFORMS, vol. 19(4), pages 10-19, August.
    • Handle: RePEc:inm:orinte:v:19:y:1989:i:4:p:10-19
    DOI: 10.1287/inte.19.4.10
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/inte.19.4.10
    Download Restriction: no
    File URL: https://libkey.io/10.1287/inte.19.4.10?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jeffrey I. McGill & Garrett J. van Ryzin, 1999. "Revenue Management: Research Overview and Prospects," Transportation Science, INFORMS, vol. 33(2), pages 233-256, May.
    2. John Kros & Scott Dellana & David West, 2009. "Overbooking Increases Patient Access at East Carolina University's Student Health Services Clinic," Interfaces, INFORMS, vol. 39(3), pages 271-287, June.
    3. Richard E. Chatwin, 1998. "Multiperiod Airline Overbooking with a Single Fare Class," Operations Research, INFORMS, vol. 46(6), pages 805-819, December.
    4. Richard E. Chatwin, 1999. "Continuous-Time Airline Overbooking with Time-Dependent Fares and Refunds," Transportation Science, INFORMS, vol. 33(2), pages 182-191, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orinte:v:19:y:1989:i:4:p:10-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.