An integrated fleet assignment and itinerary choice model for a new flexible aircraft

In this paper we present methodologies for improving the demand-responsiveness of air transportation systems. The main ingredients are the flexibility in transportation capacity provided by an innovative aircraft and an integrated model where supply-demand interactions are explicitly formulated. The integrated model benefits from the simultaneous schedule planning and revenue management decisions. The schedule planning consists of schedule design and fleet assignment models. Revenue management decisions are integrated with an itinerary choice model which gives the market shares of the available itineraries in the market according to their price, travel time, number of stops and departure time of the day. The integrated model also includes spill and recapture effects based on the demand model. Furthermore, the demand model is developed for economy and business classes and the seat allocation for these classes is determined by the integrated model. The resulting model is a mixed integer nonlinear problem and we propose a heuristic to tackle with the complexity of the problem.