Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/65398
Title: Air cargo revenue management under buy-back policy
Authors: Lin, D
Lee, CKM 
Yang, J
Keywords: Air cargo
Asset provider
Buy-back
Intermediary
Overbooking
Revenue management
Issue Date: 2017
Publisher: Pergamon Press
Source: Journal of air transport management, 2017, v. 61, p. 53-63 How to cite?
Journal: Journal of air transport management 
Abstract: Few researches address the application of financial “buy-back” concept in the air cargo revenue management. This paper examines the air cargo booking and execution procedure to measure the applicability of the buy-back policy in the air cargo revenue. By applying buy-back policy during the period of order release and order execution, a revenue model is built which incorporates Hellermann's capacity option model into the Black-Scholes pricing model. The results demonstrated that buy-back policy not only answers the questions of whether to buy-back, when to buy-back and how much to buy-back, but also increases the revenues of both asset provider and intermediary. Further study is extended in the overbooking and partial buy-back scenarios. The buy-back policy showed better performance in these two scenarios compared with current approach.
URI: http://hdl.handle.net/10397/65398
EISSN: 0969-6997
DOI: 10.1016/j.jairtraman.2016.08.012
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