Modeling the competition among air-travel itinerary shares: GEV model development

This study reports the results of aggregate air-travel itinerary share models estimated using data from all East West markets in the United States and Canada. These models predict airline ridership at the itinerary level and aid carriers in long and intermediate term decision-making. Official and comprehensive schedule and bookings data is used to estimate generalized extreme value models capturing the inter-itinerary competition dynamic along three dimensions: time of day, carrier and level-of-service (nonstop, direct, single-connect, double-connect). Models incorporate one, two or three of these dimensions simultaneously. Model structures considered include multinomial logit and variations of the nested logit model (two-level nested logit, two-level weighted nested logit, three-level nested logit, three-level weighted nested logit and nested weighted nested logit). Independent variables for the models measure various itinerary service characteristics such as level-of-service, connection quality, carrier attributes, aircraft type, and departure time. Additionally, the advanced models yield inverse logsum and/or weight parameter estimates capturing the underlying competitive dynamic among air-travel itineraries. The results are intuitive, and the advanced models outperform the more basic specifications with regard to statistical tests and behavioral interpretations, giving insight into the competitive dynamic of air-carrier itineraries.