Correspondence: Karl Isler, Swiss International Air Lines Ltd., PO Box, 8058 Zurich-Airport, Switzerland

¹is Head of Operations Research and Strategy at the Revenue Management, Pricing and Distribution Department of Swiss International Airlines. He holds a PhD in Theoretical Physics from ETH Zurich. He developed the concepts for the integrated O&D pricing and inventory control strategy used by Swiss. His main research areas are O&D pricing and inventory control, interface between revenue management and scheduling, schedule reliability and performance measures.

²is Head of Revenue Management, Pricing and Distribution of Swiss International Airlines.

Received 27 November 2008; Revised 27 November 2008; Published online 16 January 2009.

Abstract

Airline revenue management has changed over the last years influenced by the advent of Internet distribution and global distribution system (GDS) functions like origin and destination control and seamless availability. The increased ability to price discriminate is seen as the main driver behind those changes. We analyse current GDS functionality under this aspect and describe how it can be used to implement dynamic pricing, similar to the possibilities of the Internet. We discuss shortcomings of current GDS distribution and propose solutions to improve the current capabilities. We present some ideas on how to overcome the booking class limitation, which is still the major drawback compared to direct Internet distribution.