Abstract:Pricing and seat inventory control are primary strategies for airlines to improve their profitability and com2 petitiveness. In the past , however , research in these two areas has been carried out independently. This article pro2 poses a comprehensive model that integrates the two decision processes in airline revenue management . It assumes that the airline serves multiple fare classes. Demand of each fare class follows a Poisson process whose intensity is time dependent . Given the state of remaining seats and time2to2go , the airline determines an optimal fare2mix and an optimal fare for the customer class if it is open. It develops a three2stage strategy for the optimal policy which is fairly simple and tractable. Numerical examples are provided