In the airline industry, deciding the ticket price for each flight directly affects the number of people that in the future will try to buy a ticket. Depending on the willingness-to-pay of the customers the flight might take off with empty seats or seats sold at a lower price. Therefore, based on the behavior of the customers, a price must be fixed for each type of product in each period. We propose a stochastic dynamic pricing model to solve this problem, applying phase type distributions and renewal processes to model the inter-arrival time between two customers that book a ticket and the probability that a customer buys a ticket. We test this model in a real-world case where as a result the revenue is increased on average by 31 percent. 
A stochastic dynamic pricing model for the multiclass problems in the airline industry