Analytical Modeling of Ancillary Items

Airlines profitability increasingly depends on the sale of ancillary items such as seat selection, baggage fees, etc. The modeling of ancillary items is becoming more important in the analytics literature. Much of the modeling is stylized and not immediately applicable. This paper contains a review of the approaches and modeling assumptions made in the literature. The focus is on the assumptions made so that models may be evaluated for how effective they are for applications and to highlight gaps in the literature.