Do hybrid forecasting and forecast multipliers still work in a “perfectly tuned” PODS international network with four competing airlines?

Abstract

We have seen many results over the years where various ‘intelligent aggressiveness’ levers (e.g., forecast multipliers, aggressive unconstrainers, hybrid forecasting, and/or fare adjustment) have been used effectively by an individual airline in a competitive environment to increase its revenues. The research question studied here is whether an airline can still use any of these methods to increase revenue in a competitive environment where all the competing airlines are “perfectly” aggressive. This paper will answer the question in the Passenger Origin–Destination Simulator Network U10 (a large international network with 572 origin–destination markets with four airlines competing for passengers, including a low-cost carrier).