Optimal airline multi-leg flight seat inventory control

In this paper, the problem of determining optimal booking policy for multiple fare classes in a pool of identical seats for multi-leg flights is considered. For large commercial airlines, efficiently setting and updating seat allocation targets for each passenger category on each multi-leg flight is an extremely difficult problem. This paper presents static and dynamic policies of allocation of airline seats for multi-leg flights with multiple fare classes, which allow one to maximize an expected contribution to profit. The dynamic policy uses the most recent demand and capacity information and allows one to allocate seats dynamically with anticipation over time. A numerical example is given.