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They’re trying to maximize revenue R, which is seat price P times seats filled S. S goes down when P goes up, but the linkage is very complex. Some people take
by nikanj 9y ago
They’re trying to maximize revenue R, which is seat price P times seats filled S. S goes down when P goes up, but the linkage is very complex.
Some people take flights to wherever if it’s cheap enough, some fly a given route on given days, no matter the cost. Some will tolerate layovers and transfers for some cost, but that cost needs to be high enough.
Forecasting these components lets you increase total revenue without overselling.