Analysis of an itinerary-based airline fleet assignment model with passenger-choice driven recapture and pricing

There is an increasing interest for the integration of supply-demand interactions in airline schedule planning models. We work with an itinerary-based fleet assignment model where an itinerary choice model is explicitly integrated. The choice model represents the decision on pricing as well as the spill and recapture effects. We present a sensitivity analysis for the key assumptions of the demand model in order to quantify the added value of choice-based fleet assignment compared to leg-based fleet assignment. The model is solved with a local search heuristic which iterates over two sub-problems. We present a transformation of the problem which results with a convex formulation and is expected to increase the efficiency of the solution methodologies.