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Modeling and optimization of single-leg multi-fare class overbooking problem: the case of Ethiopian Airlines
Revenue Management, also known as yield management, is a technique used by airline industries to maximize revenue by allocating the available seats to the right customers at the right price. Overbooking is an airline revenue management technique that enables airlines to sell more seats than availabl...
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AUC Knowledge Fountain
2012
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| _version_ | 1867613417284567040 |
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| access_status_str | Open Access |
| author | Bonsa, Getachew Basa |
| author_browse | Bonsa, Getachew Basa |
| author_facet | Bonsa, Getachew Basa |
| author_sort | Bonsa, Getachew Basa |
| collection | Thesis |
| dc_rights_str_mv | The author retains all rights with regard to copyright. The author certifies that written permission from the owner(s) of third-party copyrighted matter included in the thesis, dissertation, paper, or record of study has been obtained. The author further certifies that IRB approval has been obtained for this thesis, or that IRB approval is not necessary for this thesis. Insofar as this thesis, dissertation, paper, or record of study is an educational record as defined in the Family Educational Rights and Privacy Act (FERPA) (20 USC 1232g), the author has granted consent to disclosure of it to anyone who requests a copy. |
| description | Revenue Management, also known as yield management, is a technique used by airline industries to maximize revenue by allocating the available seats to the right customers at the right price. Overbooking is an airline revenue management technique that enables airlines to sell more seats than available in order to account for the fact that some of the passengers may not show-up or cancel their flights on the departure day. The objective of this thesis is to develop an overbooking model for a single-leg multi-fare class flight considering a realistic distribution of no-show data collected from the Ethiopian airlines. The overbooking model developed considers the interaction (i.e. the transfer of an extra passenger in a lower fare classes to higher fare class empty seat) between classes that may exist during boarding time. Moreover, this work investigates the economic rationale behind the no overbooking policy used by Ethiopian airlines for some of its flights. The overbooking model developed was solved using both a closed form approach using derivatives and Monte Carlo simulation with a derivative free optimization algorithm. A comparison of the revenue generated from no-overbooking policy, the closed form solution, and the Monte Carlo simulation solution approach shows that the Monte Carlo simulation solution approach performs well. Generally, the numerical results show that the overbooking model is effective in determining the optimal number of overbooking for a number of classes and a variety of compensation cost plans. |
| format | Thesis |
| id | oai:fount.aucegypt.edu:etds-2274 |
| institution | American University in Cairo (Egypt) |
| last_indexed | 2026-06-10T12:35:48.888Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from AUC Knowledge Fountain — bepress |
| publishDate | 2012 |
| publishDateRange | 2012 |
| publishDateSort | 2012 |
| publisher | AUC Knowledge Fountain |
| publisherStr | AUC Knowledge Fountain |
| record_format | dspace |
| source_str | AUC Knowledge Fountain — bepress |
| spelling | oai:fount.aucegypt.edu:etds-2274 Modeling and optimization of single-leg multi-fare class overbooking problem: the case of Ethiopian Airlines Bonsa, Getachew Basa Revenue Management, also known as yield management, is a technique used by airline industries to maximize revenue by allocating the available seats to the right customers at the right price. Overbooking is an airline revenue management technique that enables airlines to sell more seats than available in order to account for the fact that some of the passengers may not show-up or cancel their flights on the departure day. The objective of this thesis is to develop an overbooking model for a single-leg multi-fare class flight considering a realistic distribution of no-show data collected from the Ethiopian airlines. The overbooking model developed considers the interaction (i.e. the transfer of an extra passenger in a lower fare classes to higher fare class empty seat) between classes that may exist during boarding time. Moreover, this work investigates the economic rationale behind the no overbooking policy used by Ethiopian airlines for some of its flights. The overbooking model developed was solved using both a closed form approach using derivatives and Monte Carlo simulation with a derivative free optimization algorithm. A comparison of the revenue generated from no-overbooking policy, the closed form solution, and the Monte Carlo simulation solution approach shows that the Monte Carlo simulation solution approach performs well. Generally, the numerical results show that the overbooking model is effective in determining the optimal number of overbooking for a number of classes and a variety of compensation cost plans. 2012-02-01T08:00:00Z thesis application/pdf https://fount.aucegypt.edu/etds/1275 https://fount.aucegypt.edu/context/etds/article/2274/viewcontent/Modelling_20and_20Optimization_20of_20Single_Leg_20Multi_Fare_20Class_20Overbooking_20Problem.pdf The author retains all rights with regard to copyright. The author certifies that written permission from the owner(s) of third-party copyrighted matter included in the thesis, dissertation, paper, or record of study has been obtained. The author further certifies that IRB approval has been obtained for this thesis, or that IRB approval is not necessary for this thesis. Insofar as this thesis, dissertation, paper, or record of study is an educational record as defined in the Family Educational Rights and Privacy Act (FERPA) (20 USC 1232g), the author has granted consent to disclosure of it to anyone who requests a copy. Theses and Dissertations AUC Knowledge Fountain Revenue magement Ethiopian Airlines |
| spellingShingle | Revenue magement Ethiopian Airlines Bonsa, Getachew Basa Modeling and optimization of single-leg multi-fare class overbooking problem: the case of Ethiopian Airlines |
| title | Modeling and optimization of single-leg multi-fare class overbooking problem: the case of Ethiopian Airlines |
| title_full | Modeling and optimization of single-leg multi-fare class overbooking problem: the case of Ethiopian Airlines |
| title_fullStr | Modeling and optimization of single-leg multi-fare class overbooking problem: the case of Ethiopian Airlines |
| title_full_unstemmed | Modeling and optimization of single-leg multi-fare class overbooking problem: the case of Ethiopian Airlines |
| title_short | Modeling and optimization of single-leg multi-fare class overbooking problem: the case of Ethiopian Airlines |
| title_sort | modeling and optimization of single leg multi fare class overbooking problem the case of ethiopian airlines |
| topic | Revenue magement Ethiopian Airlines |
| url | https://fount.aucegypt.edu/etds/1275 https://fount.aucegypt.edu/context/etds/article/2274/viewcontent/Modelling_20and_20Optimization_20of_20Single_Leg_20Multi_Fare_20Class_20Overbooking_20Problem.pdf |
| work_keys_str_mv | AT bonsagetachewbasa modelingandoptimizationofsinglelegmultifareclassoverbookingproblemthecaseofethiopianairlines |