Abstract: In the current circumstance of fierce competition market in air passenger industry, there are a few correspondingly monopoly routes for airline company. Moreover, the multiple flights in the same leg every day are named as parallel flights. How to make dynamic pricing policy in order to maximize total revenue of all the flights of the leg? With the stochastic control theory,dynamic pricing continuous time model for two parallel flights of a monopoly airline is developed, the properties of the value function and the threshold point of time of optimum control are discussed. Numerical examples show that this control policy is not only prone to implement, but also more profitable than that of the policy for independent demand.

Key words: air passenger industry, revenue management, parallel flights, dynamic pricing