T-TRANS Leaflet

Case study 2: Revenue Management technologies for freight transport

case study 2 revenue managementRevenue Management (RM) techniques were first developed and applied by the airline industry following the U.S. Airline Deregulation Act (1978). Today it is a common practice for airline companies to sell the tickets for a certain flight at different fares based on the type of service (i.e. business class, economy class etc.) and how much in advance of the flight the seat is booked. The amount of tickets to be sold per fare class in order to satisfy the demand per class of users (i.e. business travellers, tourists on holiday etc.) and maximise the final revenue for the company is established according to prediction techniques that fall under the definition of Revenue Management.
Nowadays Air Cargo is a growing market. Despite a strong recession following 2008 crisis, it is now showing signs of slow reprise, according to IATA’s 2012 profit estimates. While on the one hand RM has been a common practice for passenger airlines for decades now, it is only in the last 15 years that it has started to be applied systematically to air cargo. The main reason for this lies in the differences between these two businesses, which make the cargo RM problem far more difficult to solve (mathematically) than the passenger one (K. Talluri , G. van Ryzin (2004)).