Airline Yield Model Simulating Current Industry Standard Yield
The aviation industry is a capital-intensive market, which depends on huge investments to start and operate an airline company. For airlines to achieve a competitive return on their investments, they depend on developing and maintaining a strong customer base. In order to do so, they implement various strategies to attract customers to improve market share. For airlines to be profitable and sustain competitive markets, various financial factors need to be considered. Among these factors is "yield", which is the focus of this research project. The project analysis explores the development of a yield model from daily-published airline fares, examines data and determines if a reliable model can be developed which will correlate strongly with the monthly-published domestic airline yield report of the Airlines for America (A4A). Finally, the research seeks to answer the question as to whether or not a model can be used for predicting yield value close to the A4A yield report prior to its release.^
Denver W. Lopp, Purdue University.