Air itinerary shares estimation using multinomial logit models

Abstract

ABSTRACTThe main goal of this study is the development of an aggregate air itinerary market share model. In order to achieve this, multinomial logit models are applied to distribute the city-pair passenger demand across the available itineraries. The models are developed at an aggregate level using open-source booking data for a large group of city-pairs within the US air transport system. Although there is a growing trend in the use of discrete choice models in the aviation industry, existing air itinerary share models are mostly focused on supporting carrier decision-making. Consequently, those studies define itineraries at a more disaggregate level using variables describing airlines and time preferences. In this study, we define itineraries at a more aggregate level, i.e. as a combination of flight segments between an origin and destination, without further insight into service preferences. Although results show some potential for this approach, there are challenges associated with prediction performance and computational intensity.