Airline Muti-leg Seat Allocation Analysis Based On Game Theory

Airline seat allocation control is the core of the revenue management. Multi-leg seat allocation aims to maximize the total revenue of a route.It solves the seat allocation problem under competition of airlines.From the perspective of transportation economics theory, it analyzes the influencing factors of multi-leg seat allocation control, including supply, demand, cost and pricing. The paper shows the characteristics of civil aviation passengers and analyzes current market competition environment with SPSS software. With DEA method, the paper evaluates the technical efficiency of five airlines. A demand oriented pricing method is also introduced. There is an example to verify that the linear embedding can making more earnings.There are two steps when solving the problem. Firstly, depending on different OD demands, assign appropriate seats and confirm optimal reservation limits. Secondly, establish game model to determine the number of each class. It shows that the increase of net profit of full class will improve the protection level for full class. The game model proves that cooperation between airlines gives better protection for full class. The competition leads to prisoner dilemma when the cost is symmetric.The paper use MATLAB software to solve the model and get Nash equilibrium. Take NKG-CSX-KMG route as an example, the multi-leg seat allocation system gives the optimal seat allocation policy and expected revenue. In addition, it can show historical data and compare it with current sales.