ITA Software's Technical Seminar Series

Talk Topic: Airline Revenue Management Systems: Evolution and Recent Developments
Dr. Peter P. Belobaba, MIT
February 20, 2008

Abstract

The development of revenue management (RM) systems by airlines since the mid 1980s was credited with increasing revenues by upwards of 5-7%. We review the evolution of the forecasting, optimization and seat inventory control capabilities that contributed to these revenue gains. Since 2000, however, industry moves toward simplified fare structures has affected the ability of traditional RM systems to maximize airline revenues. Modifications to RM systems currently being developed and implemented by airlines to address the problem of "spiral down" in simplified fare structures are described.

Bio

Peter P. Belobaba is Principal Research Scientist at the Massachusetts Institute of Technology (MIT), where he teaches graduate level courses on The Airline Industry and Airline Management. He is Program Manager of MIT’s Global Airline Industry Program and Director of the MIT PODS Revenue Management Research Consortium. He is also Adjunct Professor of Aviation Management in the International Aviation MBA Program at Concordia University in Montreal. Dr. Belobaba holds a Master of Science in Transportation and a Ph.D. in Flight Transportation Systems from MIT. His doctoral dissertation entitled, “Air Travel Demand and Airline Seat Inventory Management”, is widely recognized as the first Ph.D. thesis published on the topic of airline yield management.

Dr. Belobaba has also worked as a consultant on revenue management systems at over forty airlines and other companies worldwide. He has published articles dealing with revenue management and airline competition in Airline Business, Operations Research, Transportation Science, Decision Sciences, Journal of Revenue and Pricing Management and the Journal of Air Transport Management.