Civil and Environmental Engineering

Operations and pricing in air transportation

September 21, 2018

12:00 p.m. - 1:20 p.m. ET

Posner Hall, Mellon Auditorium

Alexandre Jacquillat
Assistant Professor, Operations Research and Public Policy
Heinz College, Carnegie Mellon University

Abstract

The first part of the talk presents a passenger-centric approach to air traffic flow management optimization. Air traffic flow management aims to balance the flows of aircraft in capacity-constrained networks to minimize congestion costs. Existing research has focused on flight-centric delay minimization objectives but this may not result in most efficient outcomes from the perspective of air travelers. In contrast, this paper proposes an original approach that explicitly balances flight delay costs and passenger delays. We formulate a large-scale integer programming model to this purpose and implement a rolling algorithm that provides solutions in short computational times. Computational results  suggest that large reductions in passenger delays can be achieved at comparatively small increases in flight delay costs. 

The second part of the talk presents a field experiment conducted with a global leading airline on lead-in fares. The lead-in fare of an itinerary corresponds to the cheapest fare, typically offered months prior to departure. Commonly, airlines match their competitors’ lead-in fares, regardless of differences in itinerary characteristics (e.g., scheduled time, number of connections). We challenge this long-standing practice by differentiating the lead-in fare on selected itineraries. We propose an experimental design that estimates the treatment effect by exploiting temporal and cross-sectional variation across three types of control groups. Results show that lead-in differentiation increases revenue and yield, relative to lead-in matching, by 0.35–0.75 and 0.5–1.52 standard deviations, respectively (without decreasing market share).

Bio

Alexandre Jacquillat is an Assistant Professor of Operations Research and Public Policy at Carnegie Mellon University’s Heinz College, with cross-appointments in the Department of Civil and Environmental Engineering and at the Tepper School of Business.

His research develops and applies operations research and management science methodologies to promote more efficient, reliable, and sustainable transportation systems. His primary areas of focus are air traffic management systems and ride-sharing systems.

Alexandre is the recipient of several research and leadership awards, including the INFORMS George B. Dantzig Dissertation Award, the Best Dissertation Prize and the Best Paper Award  from the INFORMS Transportation Science and Logistics section, and the L.E. Rivot Medal from the French Academy of Science.

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