Air Cargo Revenue Management

J. Blomeyer

Research output: ThesisDoctoral Thesis

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Abstract

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.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Tilburg University
Supervisors/Advisors
  • Fleuren, Hein, Promotor
  • Bisschop, J., Promotor, External person
Award date24 Nov 2006
Place of PublicationTilburg
Publisher
Publication statusPublished - 2006

Fingerprint

Air cargo
Revenue management
Revenue
Yield management
Factors
Industry
Airline industry
Discount
Profitability
Art
Profit
Management system
Scaling

Cite this

Blomeyer, J. (2006). Air Cargo Revenue Management. Tilburg: CentER, Center for Economic Research.
Blomeyer, J.. / Air Cargo Revenue Management. Tilburg : CentER, Center for Economic Research, 2006. 181 p.
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title = "Air Cargo Revenue Management",
abstract = "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.",
author = "J. Blomeyer",
year = "2006",
language = "English",
series = "CentER Dissertation Series",
publisher = "CentER, Center for Economic Research",
school = "Tilburg University",

}

Blomeyer, J 2006, 'Air Cargo Revenue Management', Doctor of Philosophy, Tilburg University, Tilburg.

Air Cargo Revenue Management. / Blomeyer, J.

Tilburg : CentER, Center for Economic Research, 2006. 181 p.

Research output: ThesisDoctoral Thesis

TY - THES

T1 - Air Cargo Revenue Management

AU - Blomeyer, J.

PY - 2006

Y1 - 2006

N2 - 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.

AB - 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.

M3 - Doctoral Thesis

T3 - CentER Dissertation Series

PB - CentER, Center for Economic Research

CY - Tilburg

ER -

Blomeyer J. Air Cargo Revenue Management. Tilburg: CentER, Center for Economic Research, 2006. 181 p. (CentER Dissertation Series).