Optimal baggage-limit policy:Airline passenger and cargo allocation

摘要

To address the optimal baggage-limit policy for airlines.This paper addresses the optimal baggage-limit policy for airlines. As much of the cargo is currently transported in the residual aircraft belly space after all the passenger baggage has been emplaned, it is important for carriers to plan passenger and cargo levels together when setting passenger baggage limit. This problem is formulated as a variant of the price-dependent multi-item newsvendor model with weight-volume capacity constraints. The effects of baggage weight, prices and costs on the number of passengers and amount of cargo carried are studied. Findings suggest that airlines may be able to increase profits with significant reductions in passenger baggage limits for large aircrafts.