Chapter 13

The Future of Revenue Management

Revenue management is still in its early years as a separate discipline. It first emerged barely 30 years ago, in the 1980s, as American Airlines sought to combat the threat of low-cost, low-price competitors. It succeeded in its initial limited goal. Revenue management remained as a means to maximize revenue on a short-term, service unit basis. The goal was to add paying passengers to each flight, ideally in ways that did not infringe on normal-price business. After a few years of aggressively applying these techniques, the CEO of American Airlines stated, “Yield management is the single most important technical development in transportation management since we entered the era of airline Deregulation…We ...

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