The econometrics of airline network management
AbstractThe task of airline network management is to develop new flight schedule variants and evaluate thm 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 modeling problem in which the analyst 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 specificationdesigned for the airline network management task. The superior performance of the new model is demonstrated both in a simulation study and in a real-world application using airline bookings data.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2001055.
Date of creation: 00 Dec 2001
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airline industry; transportation; discrete choice models; multinomial probit model;
Find related papers by JEL classification:
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
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