Abstract

Airline partnerships have become one of the major trends in the recent years with the primary motivation of increasing revenues and decreasing costs for alliance partners. A major advantage comes through increase in the number of destinations served by an airline at little incremental costs. The total benefit of partnership can be achieved when partners in an alliance operate and take decisions as a single virtual entity. Various systems of the partner airlines need to interface and exchange information to achieve the benefit in a decentralized world. This paper provides a path to maturity in collaboration between partners from current state to joint revenue management leveraging simulation studies run on real data from two airline partners. The results from simulation studies quantify the revenue impact of incremental steps in maturity of collaboration along stages of information exchange, true origin and destination demand forecasting and revenue sharing agreements.