New Heuristics for Connecting Flight Capacity Allocation– A Theory-Based Framework

We analyze the properties of various heuristics for capacity allocation in connecting flights in an airline network, considering two primary challenges faced by airline carriers: the difficulty to accurately forecasting demand and the difficulty in processing data effectively. In a hub-and-spoke network, our simulation results indicate that an adaptive capacity management heuristic (i.e. allocating seats based on a superior data forecasting) only outperforms the robust capacity management heuristic (i.e. allocating seats based on superior data processing), if demand variability is limited, and the size of the network is relatively small. In some cases, however, the adaptive capacity management heuristic is also outperformed by a simple fixed capacity management procedure.