Correspondence: B. Vinod, 3150 Sabre Drive, Southlake, Texas 76092, USA

¹is Chief Scientist and Senior Vice President at Sabre Holdings. Before rejoining Sabre, he served (2000–2003) as Vice President of CRM and Revenue and Price Optimisation business units at i2 Technologies. At Sabre (1985–1999), Dr Vinod was Vice President of Airline Solutions, responsible for pricing and yield management.

²is a senior associate in Advisory Services at PricewaterhouseCoopers. Before joining PricewaterhouseCoopers, he served as a Principal in the Revenue Planning OR Group at Sabre Airline Solutions. Since 1996, he has worked on a variety of decision support projects in the areas of network planning, flight scheduling, pricing, revenue management and airline cargo. He holds an MBA and an MS in Operations Research from the University of Texas at Austin.

³is a senior research scientist at Sabre. He leads advanced R&D efforts in airline pricing and revenue management including collaboration with universities.

Received 9 January 2009; Revised 9 January 2009; Published online 17 April 2009.

Abstract

Traditional airline fare management is focused on timely fare responses to competitor actions. As a result, the process is largely reactive with a focus on matching the rest of the marketplace. This paper presents a new framework for more intelligent decision making in both tactical and strategic pricing based on demand models and competitive impacts.