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Journal of Economics

, Volume 77, Issue 1, pp 73–90 | Cite as

The “Adjustable-curtain” Strategy: Overbooking of Multiclass Service

  • Staffan Ringbom
  • Oz Shy

The “adjustable-curtain” strategy, now commonly practiced by many airline companies, refers to a strategy where the airline adjusts the size of the business-class section of the aircraft shortly before boarding takes place. This strategy enables the carrier to deny boarding of economy-class passengers in an event of a high show-up of business-class (high-paying) passengers by simply enlarging the business-class section at the expense of the economy-class section (and of course, the other way around, in a case of a low show-up of business passengers). This paper develops a simple method of computing a profit-maximizing reservation policy which determines the number of business- and economy-class bookings taking into account that the adjustable-curtain strategy will be utilized prior to boarding.

Keywords: adjustable-curtain strategy, overbooking, multiclass service, airline industry. 
JEL classification: L93. 

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Copyright information

© Springer-Verlag Wien 2002

Authors and Affiliations

  • Staffan Ringbom
    • 1
  • Oz Shy
    • 2
  1. 1.Department of Economics, Swedish School of Economics, P.O. Box 479, 00101 Helsinki, Finland (e-mail: staffan.ringbom@shh.fi)FI
  2. 2.Department of Economics, University of Haifa, 31905 Haifa, Israel (e-mail: ozshy@econ.haifa.ac.il)IL

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