Strategically influencing seat selection in low-cost carriers: a GRASP approach for revenue maximization

Merizalde, Andrés, Rubiano, Gustavo, Pardo, Germán Roberto, Pozos, Alejandra Tabares and Álvarez-Martínez, David (2024) Strategically influencing seat selection in low-cost carriers: a GRASP approach for revenue maximization. In: Sevaux, Marc, Olteanu, Alexandru-Liviu, Pardo, Eduardo G., Sifaleras, Angelo and Makboul, Salma, (eds.) Metaheuristics - 15th International Conference, MIC 2024, Proceedings. Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics). Springer Science and Business Media Deutschland GmbH, pp. 65-79. ISBN 9783031629211

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Abstract

In the competitive passenger air transport market, low-cost airlines continue strengthening their position, contrasting sharply with traditional carriers. This article delves into the unique operational strategies of these airlines, focusing on their reliance on ancillary services. Among these services, seat selection stands out as a crucial revenue enhancer. The study emphasizes the importance of low-cost carriers ensuring the availability of specific seats for direct purchase, thereby avoiding their allocation through automatic seat assignment algorithms, commonly activated for passengers who do not opt for specific seating. A notable consumer behavior observed is the preference for passengers on the same booking to be seated together. Low-cost airlines can capitalize on this trend by encouraging seat purchases and using automated seat assignments to strategically separate passengers traveling together unless they opt for paid seat selection. This work presents a novel approach to the seat assignment problem based on a GRASP algorithm; this approach is beneficial due to its low requirement for extensive parameter calibration, intuitive nature, and adaptability to different airline scenarios. Using an actual flight database of a low-cost Colombian airline, we have compared the airline’s rule-based heuristics, a network flow model, and our metaheuristic approach; the results obtained are satisfactory in terms of solution quality and computational cost. The proposed solution offers a viable, cost-effective alternative to specialized software solutions, aligning with the financial constraints typical of low-cost carriers while effectively enhancing their seat assignment process to optimize revenue generation.

Item Type:	Book Section
Additional Information:	© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024.
Divisions:	LSE
Subjects:	Q Science > QA Mathematics > QA75 Electronic computers. Computer science
Date Deposited:	17 Sep 2024 13:30
Last Modified:	11 Dec 2024 18:15
URI:	http://eprints.lse.ac.uk/id/eprint/125438

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