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Abstract

An airline seat reservation system wherein seat reservations are controlled using, in part, a computerized seat inventory control system. The seat inventory control system, based on a concept termed Network-Based Expected Marginal Seat Revenue (EMSR), does not require the large number of variables required by the other network-based approaches, and it incorporates a probabilistic demand model without resorting to computationally intractable integer programming. The seat inventory control system uses iterative leg-based methods to control bookings in a flight network comprised of a plurality of itinerary/fare class combinations using a plurality of flight legs. When considering a particular flight leg, the total fare paid by a passenger using the leg is adjusted by taking into account an estimate of the displacement cost of the travel on the other legs of the itinerary to create a virtual fare. Expected marginal seat revenues (or more precisely, their current approximations) provide the displacement costs on the legs when computing virtual fares. Using these virtual fares, a leg-based optimization method is applied to the individual legs one-by-one to compute new approximations of the expected marginal seat revenues. This method is iterated until the expected marginal seat revenues concerge to their network-optimal values.

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