Airline Seat Booking Network Value Remapping
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Solution Overview
Problem
Current airline revenue management systems fail to accurately assess passenger value across network paths, leading to suboptimal pricing and seat utilization due to reliance on fare classes rather than monetary values, resulting in under or overvaluation of flight legs.
Innovation Solution
A computer-based method for remapping demand for airline seats using a processor with a demand class remapping module, which calculates a network value for flight leg bookings and remaps them to a new fare class based on this value, allowing for more accurate valuation and pricing adjustments.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If traditional fare class-based valuation is used, then system complexity is reduced and ease of operation is improved, but measurement precision of passenger value is insufficient leading to suboptimal pricing
Solution Approach 1:
The patent transforms the valuation parameter from discrete fare classes to continuous monetary values. By calculating network value using actual fare amounts and displacement costs, the system achieves precise passenger valuation. This parameter change enables granular pricing adjustments while the automated calculation process manages the complexity through systematic computation rather than manual classification.
2Productivity
If fare class remapping is implemented, then revenue management precision is improved, but calculation complexity and processing time increase
Solution Approach 1:
The system performs preliminary calculations of network values and determines optimal remapped fare classes in advance, before actual booking transactions occur. By pre-computing displacement costs and establishing remapping rules, the system prepares valuation frameworks ahead of time, enabling rapid processing of individual bookings without real-time computational delays.
3Measurement precision
If network value calculation is performed for all flight legs, then valuation accuracy is improved, but computational load and system resources increase
Solution Approach 1:
The patent applies differentiated valuation approaches to different flight legs based on their specific characteristics. Network values are calculated considering local displacement costs and demand conditions for each flight leg rather than applying a uniform methodology. This localized approach maintains high valuation accuracy for each segment while optimizing computational resources by focusing calculations on relevant local parameters.
Data Source
AI summary
In a computerized remapping system for airline seat bookings, actual airline seat bookings are restated in a remapped form reflecting the value of each leg of the booking from a network perspective, facilitating improved demand forecasts for subsequent seat bookings. In this manner, seat protects and seat pricing may be better allocated to align with actual demand.