The role of robust optimization in single-leg airline revenue management

Official URL: http://www.informs.org/site/ManSci/

In this paper we introduce robust versions of the classical static and dynamic single leg seat allocation models as analyzed by Wollmer, and Lautenbacher and Stidham, respectively. These robust models take into account the inaccurate estimates of the underlying probability distributions. As observed by simulation experiments it turns out that for these robust versions the variability compared to their classical counterparts is considerably reduced with a negligible decrease in average revenue