23rd March, 2022
Revenue management (RM) and pricing in a post pandemic environment must be reflected upon. The call for making the most of data, more precise revenue and demand forecasts and optimal pricing decisions in real-time means airlines need an improved approach to yield better results.
As for where airlines, as an industry stand, legacy methodologies are failing to adapt to today’s real-world challenges and volatile environment, and it is time for airlines to count on data, relying on latest advances across #artificialintelligence and business intelligence technologies to optimize their revenue.
What route can be taken for the same?
Explaining the same during Ai’s event on #retailing optimization, FLYR Labs (We’re Hiring)’s Niels Colémont and Dennis Michon referred to total revenue optimization. The duo spoke about seven steps. It ends on one common revenue optimization forecast and concluding with total offer/ order optimization.
Francois Choquette, B. Eng, MSc., MBA, Air Canada highlighted that airlines must look at customer expectations in a transparent and digital world.
“For years now, airlines’ pricing have made use of various fences to segment customers and still being used (advance purchase, stopover etc.),” he said, adding that one must look at transparency and contextual fees. Time to bring in more context since “you know” the customer, he said.
Choquette also spoke about how to manage risk as airlines remove seats inventory and at the same time look to garner “money”. He stated that RM technology needs to be relevant for customers and “RM needs to pivot to being customer-centric”.
Organizational design
Tom Bacon presented about revenue managing customers’ wallets vs. airline organization design. Customer focus has an impact on everything, he said, referring to culture, organizational structure, skills, hiring and training, technology, distribution etc.
Ritesh Gupta
Ai Team
