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Cooperative Game Study of Airlines Based on Flight Frequency Optimization

Author

Listed:
  • Wanming Liu
  • Wendong Yang
  • Xinghui Zhu

Abstract

By applying the game theory, the relationship between airline ticket price and optimal flight frequency is analyzed. The paper establishes the payoff matrix of the flight frequency in noncooperation scenario and flight frequency optimization model in cooperation scenario. The airline alliance profit distribution is converted into profit distribution game based on the cooperation game theory. The profit distribution game is proved to be convex, and there exists an optimal distribution strategy. The results show that joining the airline alliance can increase airline whole profit, the change of negotiated prices and cost is beneficial to profit distribution of large airlines, and the distribution result is in accordance with aviation development.

Suggested Citation

  • Wanming Liu & Wendong Yang & Xinghui Zhu, 2014. "Cooperative Game Study of Airlines Based on Flight Frequency Optimization," Journal of Applied Mathematics, John Wiley & Sons, vol. 2014(1).
    • Handle: RePEc:wly:jnljam:v:2014:y:2014:i:1:n:967385
    DOI: 10.1155/2014/967385
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    References listed on IDEAS

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    1. Hannegan, Timothy F & Mulvey, Francis P, 1995. "International airline alliances An analysis of code-sharing's impact on airlines and consumers," Journal of Air Transport Management, Elsevier, vol. 2(2), pages 131-137.
    2. Gudmundsson, Sveinn Vidar & Lechner, Christian, 2006. "Multilateral airline alliances: Balancing strategic constraints and opportunities," Journal of Air Transport Management, Elsevier, vol. 12(3), pages 153-158.
    3. Albers, Sascha & Koch, Benjamin & Ruff, Christine, 2005. "Strategic alliances between airlines and airports—theoretical assessment and practical evidence," Journal of Air Transport Management, Elsevier, vol. 11(2), pages 49-58.
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