Game analysis of airline freight alliance based on improved prospect theory

The application of the airline freight alliance helps the airline's business operations, and the airlines improve the quality of service through low operating costs, so that users get a greater sense of satisfaction. Based on the airline freight alliance, this paper discusses the decision-making of different airlines in the airline freight alliance about the self-operation or outsourcing of air route transport operation. In the model, considering the loss aversion in prospect theory, the improved var function is used to describe the cost loss of airlines. The benefit matrix of both sides of the game is established, and the decision-making process is analyzed by dynamic evolutionary game. The results show that, when the cost coefficient of self-operation allocation is larger, the cost coefficient of outsourcing allocation, the risk loss coefficient and the risk concave-convex coefficient are smaller, the fixed cost is larger, and the unit transportation cost of aircraft is smaller, the yield rate is larger, and S airline should adopt business self-operation if their business volume is larger than other airlines; otherwise, it should outsource its own business. The smaller self-operating cost sharing coefficient and the larger outsourcing cost sharing coefficient, the larger self-operating probability of S airline. The larger the freight volume of S airline, the larger self-operating probability of S airline. The larger self-operating probability of other airlines, the smaller self-operating probability of S airline.