8Market Share Models

The examples presented in the previous chapter emphasized the need for analytical tools (models) to estimate the market share of itineraries in the different city‐pairs. When a city‐pair is served by multiple itineraries, these models estimate the probability that each of these itineraries will be selected by the average traveler. These models are also known as the itinerary choice models, which replicate how customers select their itineraries. They are also referred to as quality service index or quality share index (QSI) models, which determine the relationship between the quality of the itinerary and its market share (Coldren et al. 2003; Wei and Hansen 2005).

In this chapter, the state‐of‐the‐art models adopted by major airlines to estimate the itinerary market shares are presented. The chapter explains the basic model structure, main variables included, and models’ application to estimate market shares. Before proceeding, we provide a brief review of the concept of model development (modeling) for unfamiliar readers.

8.1 What Is a Model?

A model is an implement that replicates or represents a system or a phenomenon in reality. A model is developed as it is usually easier and less expensive to experiment on a model than on the actual system. The model could be physical or analytical (mathematical). The analytical models could also be supported by graphics and computer animation. A physical model is usually in the form of a simplified assembly that ...

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