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Exogenous Capacity Changes in Airline Revenue Management: Quantifying the Value of Information

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Publication date2017
Host publicationOperations Research Proceedings 2016: Selected Papers of the Annual International Conference of the German Operations Research Society (GOR), Helmut Schmidt University Hamburg, Germany, August 30 - September 2, 2016
EditorsAndreas Fink, Armin Fügenschuh, Martin Joseph Geiger
Place of PublicationCham
Number of pages6
ISBN (Electronic)9783319557021
ISBN (Print)9783319557014
<mark>Original language</mark>English


In airline revenue management, capacity is usually assumed to be fixed. However, capacity changes are common in practice. This contribution quantifies the value of information when systematically considering possible capacity changes in revenue optimization. It solves a stochastic model that anticipates capacity changes, given different levels of information. A computational study compares solution approaches with respect to the resulting revenue, seat load factor, and denied boarding.