Whether, when and which: Modelling advanced seat reservations by airline passengers

Abstract

Motivated by the growing importance of ancillary revenues in the airline industry, we propose a statistical model for Advanced Seat Reservation (ASR). We focus on the questions of whether, when and which seats are selected by passengers. To answer these questions, we employ a discrete time duration model, combined with a multinomial choice model with varying consideration set. Unknown smooth covariate effects are used, along with seat-specific random effect terms for seat selection. The model is applied to a rich dataset of 485,279 bookings on five intercontinental routes, extracted from the complete booking database of a major European airline. We find strong evidence of ‘middle seat avoidi..