Air Cargo Revenue Management

This dissertation is about Air Cargo Revenue Management: the Revenue Management of the air cargo industry. One of the most basic definitions of Revenue Management is from Kimes (2001, page 3): "Yield Management [or revenue Management, for that matter] is a method which can help a firm to sell the right inventory unit to the right type of customer, at the right time and for the right price. Yield Management guides the decision of how to allocate undifferentiated units of capacity to available demand in such a way as to maximize profit or revenue. The problem then becomes one of determining how much to sell at what price and to which markt segment." Another definition, and one which is more suited to the airline industry, is by Garvett and Hilton (1999, page 181): "Good revenue maximizers seek to obtain the best possible yields by excessively raising fares and limiting the availability of discounts - and in the process ensuring nearly empty flights. Similarly, it is easy to maximize load factors by giving the product away. Neither strategy will lead to profitability [...]. The art is to obtain both high load factors and high yields at the same time" (as quoted in O'Connor 2001, page 133)-or, more precisely, to obtain the highest possible revenue.

This dissertation has nine chapters which are clustered into five parts. Part I is the introduction, Part II is about air cargo properties, Part III is an overview of Revenue Management in air cargo, Part IV concerns nonlinear density scaling, and Part V is about forecasting, optimisation, and control.

More specifically, the dissertation is organized as follows: the first chapter introduces Air Cargo Revenue Management in general and gives an overview of the existing literature on the subject. The second chapter contains some preliminary notes about notation and quantity units, while the third chapter presents the initial and derived properties of items related to air cargo. The elements and instruments of a Cargo Revenue Management System are introduced in the fourth chapter, and the fifth chapter presents the concept of unified density. Segment demand and flight revenue are discussed in the sixth and the seventh chapter. The subject of Chapter 8 is the control of booking requests in air cargo, and booking request control linked to stowage loss is the focus of the ninth chapter. The dissertation ends with a summary and conclusions.