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Seminars

Revenue Management in the Airline Industry

Date: 04-13-2006
Start Time: 1:00pm
End Time: 2:00pm
Speaker: Barry Smith, Sabre Holdings
Location: Mudd 303

Abstract

Revenue management is one of the most important transportation marketing innovations developed since the U.S. airline industry was deregulated in 1978. By better matching supply and demand for airline travel, revenue management increases U.S. airline revenue and profit contribution by several billion dollars per year. Revenue management combines modeling approaches from discrete choice analysis, forecasting, and large-scale optimization. We'll review the development of revenue management and its impact on the airline industry. We'll also describe how changes in the airline business environment have driven the evolution of revenue management through multiple generations of approaches and applications.

Bio

Dr. Smith is chief scientist and corporate officer for Sabre Holdings. Sabre is the world's largest travel distributors (through traditional travel agencies as well as its online agency Travelocity) and is a leading supplier of airline reservation services and decision support software. He leads the Sabre Research Group and is responsible for developing new decision support applications for Sabre's travel reservation system design. He developed many of the revenue management techniques used throughout the airline industry and pioneered the application of revenue management techniques in other industries. His team was awarded 1991 Franz Edelman prize for airline yield management; the paper describing this work was awarded the 2005 INFORMS Revenue Management and Pricing Section Prize for its impact in this area. Dr. Smith served as president of AGIFORS (Airline Group of the International Operational Research Societies) and was named an AGIFORS fellow in 2004. He holds a Ph.D. in industrial and systems engineering from Georgia Tech, a master of science in operations research from MIT and a bachelor of aerospace engineering from Georgia Tech.