Abstract
In order to keep in good long-term relationships with their main customers, Airline Cargo companies do not impose any fee for last minute cancellations of shipments. As a result, customers can book the same shipment on several cargo companies. Cargo companies try to balance cancellations by a corresponding volume of overbooking. However, the considerable uncertainty in the number of cancellations does not allow to fine-tune the optimal overbooking level, causing losses. In this work, we show how the deployment of cryptographic techniques, enabling the computation on private information of customers and companies data can improve the overall service chain, allowing for striking and enforcing better agreements. We propose a query system based on proxy re-encryption and show how the relevant information can be extracted, still preserving the privacy of customers’ data. Furthermore, we provide a Game Theoretic model of the use case scenario and show that it allows a more accurate estimate of the cancellation rates. This supports the reduction of the uncertainty and allows to better tune the overbooking level.
Highlights
One of the main problems in air cargo revenue management is the modeling of overbooking and cancellation in the operation of the service chain, which involves air-cargo carrier companies (ACCs) and their clients, the freight forwarder companies (FFs)
In this work we have addressed the issue of the air cargo cancellation due to multiple reservation by proposing the use of a query system based on a privacy preserving cryptographic technique
The audit method can be used within a randomized inspection schema, which modeled by Game Theory, allows to predict the optimal rate of inspection and of cancellation, respectively
Summary
One of the main problems in air cargo revenue management is the modeling of overbooking and cancellation in the operation of the service chain, which involves air-cargo carrier companies (ACCs) and their clients, the freight forwarder companies (FFs). Together with shippers, they are the main players in the air-cargo chain. In terms of financial market terminology, the pre-allocation sale corresponds to a long term forward contract between the FF and the ACC, where the former commits to buy in the future the agreed capacity (specific volume or weight on a specific flight and date). The approach followed in the present paper is different, in that we propose to leverage part of the hidden information by means of privacy preserving computing techniques, so as to remove some inefficiencies of the market, and move market players toward a different equilibrium
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