A Mathematical Programming Model for Optimal Service Selection in the Airline Industry

Airlines, offering tour plans, have to select a few gateways (airports) to which the air tickets for tour plans are issued. A number of alternate gateways are available for different tour plans, and the selection of gateways is influenced by the perceived preferences of tourists for these and competing plans. In this paper, using the ordinal preferences of tourists, we formulate the problem of gateway selection as an integer program. The solution procedure presented for this integer program is computationally attractive as we exploit the special structure of our formulation. The model proposed is general, and can be applied to the simultaneous positioning of several new products or services.