Abstract
In this chapter, the revenue sharing problem of strategic passenger airline alliances is modeled as a cooperative game. Firstly, a linear programming model is proposed to find the maximum expected revenue for any set of cooperating airlines. Then, a numerical example is presented to show that simple revenue sharing rules do not guarantee the stability of an airline alliance, and there is a need for a more sophisticated approach. In Sect. 5.2, the properties of the airline alliance revenue management game are investigated. Afterwards, it is shown that the game is balanced and has a non-empty core. Finally, in Sect. 5.4, the Owen set of the game is analyzed and it is demonstrated that the nucleolus cannot always be obtained through dual optimal solutions. This chapter is based on Kimms and Çetiner (2012).
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Kimms A, Çetiner D (2012) Approximate nucleolus-based revenue sharing in airline alliances. Eur J Operat Res 220:510–521
Owen G (1975) On the core of linear production games. Math Program 9:358–370
Potters JAM, Tijs SH (1992) The nucleolus of a matrix game and other nucleoli. Math Operat Res 17:164–174
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© 2013 Springer-Verlag Berlin Heidelberg
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Çetiner, D. (2013). Airline Alliance Revenue Management Game. In: Fair Revenue Sharing Mechanisms for Strategic Passenger Airline Alliances. Lecture Notes in Economics and Mathematical Systems, vol 668. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-35822-7_5
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DOI: https://doi.org/10.1007/978-3-642-35822-7_5
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Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-35821-0
Online ISBN: 978-3-642-35822-7
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