Optimal seat allocation for flights with one intermediate stop

During the time prior to departure of a flight with an intermediate stop decisions must be made concerning the allocation of reserved seats to passengers requesting space on the full or partial spans of the flight. The paper presents a model for finding the maximum allowable allocation of seats on the various spans at each time prior to departure such that a maximum expected contribution to profit for the flight is obtained. The model utilizes the time distribution of reservations and cancellations for both spans. Consideration is given to the effects of waitlists, standbys and overbookings. A Bayesian reassessment of probabilities is incorporated in a sequential decision procedure. A computer program was written to perform the calculations, and the results of a short sample problem which was run to test the validity of the model are presented.