- July 4, 2011 - 13:00
- ZLC, Lecture Room 221, Zaragoza (Spain)
Associate Professor of Operations Management
New York University Stern School of Business
New York City, NY, USA
“Revenue Sharing in Airline Alliances”
Airline alliances as means of collaboration among independent carriers are a growing trend in the industry. From a revenue management perspective, one of the most significant features of the alliances are codeshare itineraries by which independent airlines can collaboratively market and operate flights. Different from traditional, monopolistic airline revenue management, alliance members control a decentralized network of resources through independent reservation and information systems. In this research, we investigate contractual agreements between multiple airlines operating within a network alliance. We study contracts that specify how revenue should be split among the carriers. We propose a two-step hierarchical approach. First, we formulate a static problem in which airlines select partitioned allocations and show that a simple transfer price mechanism achieves first best. Then, we study the dynamic problem and prove that the static transfer prices are asymptotically optimal.
René Caldentey is an Associate Professor of Operations Management at New York University Stern School of Business. His primary research interests include stochastic modeling with applications to revenue and retail management, queueing theory, and finance. He has been published in numerous journals including Advances in Applied Probability, Econometrica, Management Science, Mathematics of Operations Research, M&SOM, Operations Research and Queueing Systems. He is Associate Editor of M&SOM and Senior Editor of POM. Before joining NYU Stern, Professor Caldentey worked for the Chilean Central Bank and taught at the University of Chile. Professor Caldentey received his Master of Arts in Civil Industrial Engineering from the University of Chile and his Doctor of Philosophy in Operations Management from MIT.