I have always been fascinated by the algorithm airlines use when we book the tickets. I am an undergraduate CS student and I am really interested in knowing how this works. For example, how does it figure out connecting flights? How does the fare allocation work?
Is it all handled by a single company or each airlines uses its own system?
If you can point me to some links to read, it would be wonderful.
This is regulated via IATA
Scheduling standards are maintained by this org too
I am not so familiar with the domain but I know airline booking is a fairly complex process with multiple parties involved. I did some quick search and found this useful presentation.
I don't have any specific literature to point to, but to help get you thinking about the various problems, here are a few thoughts.
You can think of the airline network as a huge graph, with cities at the nodes and flights as edges. There's an edge between two cities if there is a connecting flight. Now, you can ascribe various weights to these edges, such as the time of flight, the minimal ticket cost, the number of remaining seats, etc. and use graph algorithms like Dijkstra's or A* to optimize on your metric of choice. Since there are likely to be multiple flights connecting the same cities at different times/prices/etc., you'll likely have to iterate these algorithms to find compatible itineraries (e.g. layovers not too short/long) etc. But fundamentally, these are graph algorithms.
Pricing is a highly complex endeavour and whole branches of Operations Research are devoted to it. Unlike routing, pricing is essentially a game--the service provider (airline) is trying to maximize revenue globally (not just for single flights), and so they have to balance passenger loading vs. ticket costs. Airlines have incredibly complex pricing structure, where the cost for a given seat varies dramatically with time, and may be wildly different than the cost for the seat right next to it, particularly depending on if is sold to a business or pleasure traveler.
The big name in airline reservation systems used to be SABRE. I don't know if that's still true, but they do seem to still be a major player.
Good luck & happy reading.
Almost all travel sites use ITA software, who provide a service that does flight planning and search. They have an excellent annotated presentation on the 'Computational Complexity of Air Travel Planning', which describes the challenges involved, and how they deal with them.