LDcFR: A new model to determine value of airline passengers

Abstract

The increasing willingness to travel as well as the increasing number of airlines create a strong competitive market in the air transport industry. In such circumstances, paying attention to the market needs is the prerequisite of the success and profitability of the company. Hence, nowadays, airlines endeavor to provide their customers with appropriate services and incentives to maintain the existing customers and attract new ones. The importance of providing appropriate incentives, on the one hand, and lack of resources, on the other, have led to airlines’ incapacity to provide good services for all of their customers. A logical solution in such a situation is to determine strategies to provide services for customers based on their value. The value model developed in this study is based on a combination of four variables, namely, relationship Length, Frequency, Distance and Recency, which is named LDcFR model. Using these variables along with the imperialist competitive algorithm clustering technique and Markov chain will determine the value of each passenger. The results of the study indicate that the LDcFR model is useful for determining the passenger value.

Keywords

Passenger value LDcFR imperialist competitive algorithm Markov chain customer relationship management

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