Abstract: Travel agency is an important element in the airline’s ticket supply network.As a special ticket agent,the travel agency usually books tickets in advance from the airline in order to satisfy the passenger demand in the midseason.Preselling to the travel agency is an important way of reducing risk for the airline.Both parties have to make careful decisions when they transact with each other:the travel agency decides on how many to order;and the airline decides on how many to supply.This paper examines their optimal decisions respectively,and researches on the collaboration mechanism between them.We consider the shortage cost,overbooking and other factors in the model.The objective of collaboration is to achieve the maximal collective revenue and bring more benefit to both parties.We bring forward a price-adjustment collaboration mechanism and illustrate the feasibility and astringency of the mechanism.

Key words: revenue management, airline, travel agency, collaboration