Abstract
United Airlines Inc. (UAL) is a major American airline headquartered in Chicago with nine domestic and international hubs. It serves 342 destinations, more than any other airline does, and ranks second in the world by the number of passenger-kilometers flown by an airline.
United Airlines Flight 3411 made headline news on April 9, 2017 after an involuntarily denied boarding (IDB) selection process resulted in passenger David Dao being forcibly removed from the aircraft by airport police. United management had demanded that Dao give up his seat on the overbooked flight for United employees making a connecting flight, but Dao refused and the situation escalated into violence with airport police.
Airlines routinely sell more tickets than available seats to compensate for cancellations and no-shows. Overbooking helps airlines maximize revenues and is perfectly legal. However, the practice also comes with risks, as evidenced by the United Airlines incident that publicly exposed flaws of the airline overbooking profit model. Why do airlines overbook? How do they use the model to maximize revenues? What are the appropriate booking limits? In this case, students will address these questions after learning how to model cancellation and no-show uncertainty using the simulation-based overbooking model and hence improve their decision-making ability in a complex and uncertain environment.
Translated title of the contribution | Flight Overbooking Models and Decisions |
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Original language | Chinese (Simplified) |
Number of pages | 13 |
Publication status | Published - 30 Jun 2020 |
Case number
OMS-20-670Case normative number
OMS-20-670-CCCase type
图书馆案例Update date
2020-07-07Published by
中欧国际工商学院Keywords
- 优化模型建模
- 决策制定
- 利润模型
- 售票限额
- 商业分析
- 收入管理
- 蒙特卡罗模拟
Case studies discipline
- Operations & Management Science
Case studies industry
- Transportation and Warehousing