One of the important techniques of airline revenue management is to determine the airfare and seat allocation for each cabin class on each flight-leg to maximize revenue. This study dealt with the operation policies of both FSCs and subsidiary LCCs against rival LCCs in terms of airfare pricing and seat allocation, which are key elements in revenue management of an airline. Because the demand of both the subsidiary LCC and the rival LCCs can influence the demand of the economy class of the FSC, the airfares of the economy class of the FSC and both subsidiary LCC and the rival LCC are considered simultaneously. In addition, due to the influenced demand of the economy class of the FSC, adjusting the seat allocation of each cabin class for FSC is required considering that both the subsidiary LCC and rival LCC because the subsidiary LCC can be regarded as the substitute products of the economy class of the FSC. Even though the physical seat allocation is hard to change in every flight, it can be decided efficiently by considering all the complex situations when the new aircraft is purchased and introduced.
Collected and summarized from the source below by Giang Tan https://db.vista.gov.vn:2095/science/article/pii/S0969699717305434