Single Resource Capacity Control Model for Hidden City Ticketing
摘要
Skip-lagging is a practice wherein strategic customers opt for a cheaper connecting flight through their destination instead of a direct flight, potentially causing significant revenue loss for airlines. In this paper, we model the impact of skip-lagging behavior on airline revenue under a single resource capacity control scenario. We introduce a dual booking limit to optimize seat allocation, yielding increased revenue compared to traditional models. We show that our model incentivizes customers to refrain from engaging in skip-lagging practices. We also analyze the solution space of the model to develop an efficient Integer Linear Programming formulation for the problem. Furthermore, we extend the model to scenarios where multiple skip-lagging opportunities are present for strategic customers.