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Customized airline offer management: a conceptual architecture

Author

Listed:
  • Daniel Schubert

    (Universiteit Antwerpen
    Swiss International Air Lines Ltd.)

  • Christa Sys

    (Universiteit Antwerpen)

  • Rosário Macário

    (Universiteit Antwerpen
    Universidade de Lisboa)

Abstract

Revenue management (RM) has been a strategic priority for airlines for decades. More recently, ancillary revenues and targeted offers for diverse customers have become increasingly relevant. Hence, airlines need to evolve their RM into offer management, complementing flight pricing with dynamic bundling, ancillary pricing and assortment. This research designs a conceptual architecture for customized real-time offer management, expanding on existing literature in several directions. It develops a machine learning framework for highly granular customer segmentation, whilst addressing three potential challenges of data sparsity, curse of dimensionality, and model understandability. The research aims to enhance customer satisfaction through customized offers and improve pricing decisions through more granular willingness-to-pay estimation.

Suggested Citation

  • Daniel Schubert & Christa Sys & Rosário Macário, 2022. "Customized airline offer management: a conceptual architecture," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(5), pages 553-563, October.
    • Handle: RePEc:pal:jorapm:v:21:y:2022:i:5:d:10.1057_s41272-021-00358-3
    DOI: 10.1057/s41272-021-00358-3
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    References listed on IDEAS

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