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Data-driven revenue management for air cargo

Author

Listed:
  • Ezgi C. Eren

    (PROS Inc)

  • Jiabing Li

    (PROS Inc)

Abstract

It is well recognized that air cargo revenue management is quite different from its passenger airline counterpart. Inherent demand volatility due to short booking horizon and lumpy shipments, multi-dimensionality, and uncertainty of capacity as well as the flexibility in routing are a few of the challenges to be handled for air cargo revenue management. In this paper, we present a data-driven revenue management approach which is well designed to handle the challenges associated with air cargo industry. We present findings from simulations tailored to air cargo setting and compare different scenarios for handling of weight and volume bid prices. Our results show that running our algorithm independently to generate weight and volume bid prices and summing the weight and volume bid prices into price optimization works the best by outperforming other strategies with more than 3% revenue gap.

Suggested Citation

  • Ezgi C. Eren & Jiabing Li, 2025. "Data-driven revenue management for air cargo," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 24(4), pages 343-352, August.
    • Handle: RePEc:pal:jorapm:v:24:y:2025:i:4:d:10.1057_s41272-025-00529-6
    DOI: 10.1057/s41272-025-00529-6
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    References listed on IDEAS

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    1. Özden, Aybike Tuba & Celik, Erkan, 2021. "Analyzing the service quality priorities in cargo transportation before and during the Covid-19 outbreak," Transport Policy, Elsevier, vol. 108(C), pages 34-46.
    2. Ezgi C. Eren & Zhaoyang Zhang & Jonas Rauch & Ravi Kumar & Royce Kallesen, 2024. "Revenue management without demand forecasting: a data-driven approach for bid price generation," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 23(6), pages 499-516, December.
    Full references (including those not matched with items on IDEAS)

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