History of revenue management – From leg to O&D
- 148 Downloads
One of the biggest milestones in the development of airline revenue management (RM) has been the step from leg to O&D (origin and destination) control. The first computer reservation systems that automated the former manual accept/reject decisions of booking requests controlled the number of bookings by booking limits per leg and booking class. The main disadvantage of this leg-type control was the inability to distinguish between local and connecting passengers.The advances in computer power and distribution capabilities (seamless polling) in the 90s enabled forecasting, optimization and availability control at O&D level. This enhancement allowed better evaluation of booking requests and closer integration of RM and pricing. Looking back, one of the biggest challenges in the evolution from leg to O&D control was the change management process.
Keywordsairline revenue management history leg control O&D control
- Alder, C. and Rockmann, J. (2009) Revenue increase by O&D optimization at Lufthansa. Presented at the AGIFORS revenue management study group meeting, Amsterdam, The Netherlands.Google Scholar
- Belobaba, P. (1987) Airline travel demand and airline seat inventory management. PhD thesis, Massachusetts institute of technology, Boston, MA.Google Scholar
- Belobaba, P. (2008) The rise and fall of airline RM systems: How can OR help? Presented at the 48th Annual AGIFORS Symposium, Montreal, Canada.Google Scholar