Abstract

Although the principles of Revenue Management (RM) have vaguely been used in business for a long time, an increasing number of organizations are implementing well structured RM systems in the last few decades due to the developments in science and technology, especially in economics, statistics, operations research and computer science. The improvements in information and telecommunication technologies, wide use of Internet, rise of e-commerce and successful supply chain management strategies have enabled organizations to model and solve complex RM problems. This dissertation research concentrates on airlines, the earliest and leading user of RM. Today, airlines face serious financial problems due to the increasing costs and competition. They continuously explore new opportunities especially in terms of RM to make profit and survive. In this study, two problems are analyzed within this scope; airline booking process with adapted options approach and aircraft maintenance order control through RM. First; a new approach, financial options approach, is proposed to sell tickets in airline reservation systems. The options are used to overcome the uncertainty in air travel demand and competitors' actions. The seat inventory control problem is formulated with overbooking and embedded options respectively. Then a simulation study is conducted the potential of using options in airlines booking process. Accordingly, empirical results show that they present an opportunity both to utilize capacity more efficiently and to value seats more precisely compared to overbooking approach. Secondly; a peak load pricing concept is applied for aircraft maintenance order control problem. Aircraft maintenance centers face with peak loads in some seasons and the capacity is underutilized in other seasons. A peak load pricing model is proposed to shift some of the price elastic demand from peak seasons to off-peak seasons to balance demand and supply around the year. A dynamic programming algorithm is developed to solve the model and a code is written in C++. Results show that the model improves both annual capacity loading factors and revenues without causing a discomfort from the perspective of the customers. The details of both studies are presented in this dissertation research. [PUBLICATION ABSTRACT]