Summary: 42 Int. J. Revenue Management, Vol. 2, No. 1, 2008
Copyright © 2008 Inderscience Enterprises Ltd.
An airline revenue management pricing game
with seat allocation
Asif Syed Raza and Ali Akgunduz*
Department of Mechanical and Industrial Engineering,
1455 de Maisonneuve Boulevard West,
Montreal, Quebec H3G 1M8, Canada
Fax: +1 514 848 3175
Abstract: This paper studies a horizontal fare-pricing competition between two
airlines having a single flight leg. Two distinct scenarios are considered. First,
the two airlines price competition for the pre-committed booking limits is
analysed. The problem is studied under deterministic price sensitive demands.
The existence of unique pricing strategies at Nash equilibrium is shown. In the
second scenario, a joint seat allocation and fare-pricing competition model for
stochastic demand is proposed. A numerical analysis is presented to