Capacity Allocation and Revenue Sharing in Airline Alliances: A Combinatorial Auction-Based Modeling

Capacity Allocation and Revenue Sharing in Airline Alliances: A Combinatorial Auction-Based Modeling

This paper attempts to establish a framework to help airline alliances effectively allocate their seat capacity with the purpose of maximizing alliances’ revenue. By assuming the airline alliance as the auctioneer and seat capacity in an itinerary as lots, the combinatorial auction model is construc...

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Main Authors: Ying-jing Gu, Jin-Fu Zhu
Format: Article
Language:English
Published: Hindawi Limited 2017-01-01
Series:Mathematical Problems in Engineering
Online Access:http://dx.doi.org/10.1155/2017/3178650
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spelling doaj-948ae8bb8f934b19957bb94285c1ce5a2020-11-24T23:08:41ZengHindawi LimitedMathematical Problems in Engineering1024-123X1563-51472017-01-01201710.1155/2017/31786503178650Capacity Allocation and Revenue Sharing in Airline Alliances: A Combinatorial Auction-Based ModelingYing-jing Gu0Jin-Fu Zhu1Department of Air Transportation, Faculty of Civil Aviation, Nanjing University of Aeronautics and Astronautics, Nanjing, ChinaDepartment of Air Transportation, Faculty of Civil Aviation, Nanjing University of Aeronautics and Astronautics, Nanjing, ChinaThis paper attempts to establish a framework to help airline alliances effectively allocate their seat capacity with the purpose of maximizing alliances’ revenue. By assuming the airline alliance as the auctioneer and seat capacity in an itinerary as lots, the combinatorial auction model is constructed to optimize the allocation of the seat, and the revenue sharing method is established to share revenue between partners by Vickrey-Clarke-Groves (VCG) mechanism. The result of the numerical study shows that the seat capacity allocation is effective even without information exchanging completely and the twofold revenue shares method shows more excitation for the airlines.http://dx.doi.org/10.1155/2017/3178650
collection DOAJ
language English
format Article
sources DOAJ
author Ying-jing Gu
Jin-Fu Zhu
spellingShingle Ying-jing Gu
Jin-Fu Zhu
Capacity Allocation and Revenue Sharing in Airline Alliances: A Combinatorial Auction-Based Modeling
Mathematical Problems in Engineering
author_facet Ying-jing Gu
Jin-Fu Zhu
author_sort Ying-jing Gu
title Capacity Allocation and Revenue Sharing in Airline Alliances: A Combinatorial Auction-Based Modeling
title_short Capacity Allocation and Revenue Sharing in Airline Alliances: A Combinatorial Auction-Based Modeling
title_full Capacity Allocation and Revenue Sharing in Airline Alliances: A Combinatorial Auction-Based Modeling
title_fullStr Capacity Allocation and Revenue Sharing in Airline Alliances: A Combinatorial Auction-Based Modeling
title_full_unstemmed Capacity Allocation and Revenue Sharing in Airline Alliances: A Combinatorial Auction-Based Modeling
title_sort capacity allocation and revenue sharing in airline alliances: a combinatorial auction-based modeling
publisher Hindawi Limited
series Mathematical Problems in Engineering
issn 1024-123X
1563-5147
publishDate 2017-01-01
description This paper attempts to establish a framework to help airline alliances effectively allocate their seat capacity with the purpose of maximizing alliances’ revenue. By assuming the airline alliance as the auctioneer and seat capacity in an itinerary as lots, the combinatorial auction model is constructed to optimize the allocation of the seat, and the revenue sharing method is established to share revenue between partners by Vickrey-Clarke-Groves (VCG) mechanism. The result of the numerical study shows that the seat capacity allocation is effective even without information exchanging completely and the twofold revenue shares method shows more excitation for the airlines.
url http://dx.doi.org/10.1155/2017/3178650
work_keys_str_mv AT yingjinggu capacityallocationandrevenuesharinginairlinealliancesacombinatorialauctionbasedmodeling
AT jinfuzhu capacityallocationandrevenuesharinginairlinealliancesacombinatorialauctionbasedmodeling
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