Abstract
Air travellers in some markets can choose from amongst a variety of fare types. These fare types vary in their prices and in associated restrictions and conditions imposed on travel. In order to assess the impact of fare packages on traffic distributions and revenues, it is necessary to be able to model the choice process and to segment the total traffic into the different fare types available at any time. This paper presents a multinomial choice model designed for that purpose. It is a multinomial logit model with modifications designed to overcome the restrictions of the axiom of independence of irrelevant alternatives, which is believed not to hold in this case. The results of the calibration using traffic data for the North Atlantic for a period of seven years confirm the suitability of the logit model for multiple choice situations in transportation.
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