Abstract
Overbooking and no-show forecasting remain critical components of airline revenue management, even as the airline business model changes to meet low-cost challenges. In this paper, we examine the performance of a blended cost-based, PNR-adjusted approach to no-show forecasting, as compared to traditional methods of no-show forecasting. Our results show that this method generates up to 10 per cent revenue gains per available seat-mile compared to historical average no-show rates, and consistently outperforms expert no-show forecasts. We also estimate the revenue gains from overbooking to range between 15 percent and 18 percent of the total revenue gains from revenue management for a 33-day period in the peak summer season.
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