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Discrete choice modelling in airline network management

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  • Joachim Grammig
  • Reinhard Hujer
  • Michael Scheidler

Abstract

The task of airline network management is to develop new flight schedule variants and evaluate them in terms of expected passenger demand and revenue. Given the industry's trend towards global cooperation, this is especially important when evaluating the potential synergies with alliance partners. From the econometric point of view, this task represents a discrete choice modelling problem in which one has to account for a large number of dependent alternatives. In this paper we discuss the applicability of recently proposed approaches and introduce a new multinomial probit specification designed for the airline network management task. The superior performance of the new model is demonstrated in a real‐world application using airline bookings data. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Joachim Grammig & Reinhard Hujer & Michael Scheidler, 2005. "Discrete choice modelling in airline network management," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 467-486, May.
    • Handle: RePEc:wly:japmet:v:20:y:2005:i:4:p:467-486
    DOI: 10.1002/jae.799
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    References listed on IDEAS

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    Cited by:

    1. Lesgourgues, Augustin & Malavolti, Estelle, 2023. "Social cost of airline delays: Assessment by the use of revenue management data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 170(C).
    2. Fukushi, Mitsuyoshi & Delgado, Felipe & Raveau, Sebastián, 2024. "Impact of omitted variable and simultaneous estimation endogeneity in choice-based revenue management systems," Transportation Research Part A: Policy and Practice, Elsevier, vol. 179(C).
    3. Kölker, Katrin & Lütjens, Klaus & Gollnick, Volker, 2024. "Analyzing global passenger flows based on choice modeling in the air transportation system," Journal of Air Transport Management, Elsevier, vol. 115(C).

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