1. THE BIG CHANGE
Aerolíneas Argentinas’ Revenue
Management Transformation
Aerolíneas Argentinas’ new real-time revenue integrity technology,
implemented as part of its revenue management transformation,
duplicates seats returned to inventory, decreasing inventory specu-lation
and making available more seats to customers. It also supports
more precise revenue management forecasting and reduces no-show
and overbooking levels.
By Rafael Martinez, Vice President of Distribution and Revenue
Management for Aerolíneas Argentinas

2. ASCEND I PROFILE
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The Big Change he technology transformation we
have undergone in our revenue man-agement
department at Aerolíneas
Argentinas permits us to offer com-petitive
pricing and inventory for our
passengers in all of our distribution channels,
generating more revenue for the airline.
This is exactly what I shared with the revenue
management community in May during the
“Successful Business Case of Revenue Integrity
at Aerolíneas Argentinas” presentation at the
AGIFORS conference in Buenos Aires.
It has been five years since the government
of Argentina acquired the airline from its previous
owners and started a strategic transformation
plan to revive it. The transformation plan involved
several key initiatives, including:
A complete fleet renewal,
An extensive technology upgrade,
Network growth focused on our Aeroparque
and Ezeiza hubs in Buenos Aires,
Enhanced products for improved customer
experience,
A significant on-time performance improve-ment.
Since then, we have expanded our fleet,
adding 70 new planes to the network. We have
increased sales by 100 percent to US$2 billion.
And we have grown our passenger base by
57 percent to 8.4 million, as well as increased
revenue per available seat kilometer (RASK) by
30 percent.
During the transformation, there were con-siderable
investments made to aircraft hangars,
airport facilities, VIP lounges and training simula-tors.
The airline also joined the SkyTeam alliance
in 2012, becoming the first member in South
America and adding 40 new destinations to the
alliance’s network.
Today, Aerolíneas Argentinas serves 36
domestic and 20 international destinations that
include Brazil, Europe, the United States and
the main cities in South America with a fleet of
14 Airbus A330/340, 36 Boeing 737NG and 22
Embraer E190.
A significant piece to this transformation
involved upgrading and/or replacing much of
our technology. As part of our technology over-haul,
Aerolíneas Argentinas chose Sabre Airlines
Solutions® as one of our main technology part-ners
to upgrade most of our core systems.
The revenue management technology trans-formation
began in 2011 with the upgrade of
our 10-year-old revenue management system to
the latest version of Sabre AirVision™ Revenue
Manager, followed by the implementation of
SabreSonic® Inventory, Sabre AirVision™ Fares
Manager, Sabre AirVision™ Group Manager and
Sabre AirVision™ Revenue Integrity. In addition,
an end-to-end fare-class realignment was imple-mented,
giving us a unique fare-class structure
in all markets we serve. It was designed to align
with SkyTeam’s requirements.
During the diagnostic phase of the rev-enue
management transformation project,
Photo: Shutterstock

3. ASCEND I PROFILE
considerable revenue leakages were discovered
in the inventory generated by false or suspicious
bookings. There were also a substantial number
of blocked seats on the inventory for long peri-ods
of time due to a flexible ticket time policy.
Lack of reporting and analytical capabilities made
it difficult to find the problems, so improvements
were required in this area as well.
It was clear that we needed advanced tech-nology
with real-time capabilities that could push
the passenger name record (PNR) information to
the inventory solution at the end of all transac-tions
to guarantee a cleaner inventory.
Implementing Revenue Integrity in 2012
enabled us to more quickly and thoroughly
identify suspicious and fake PNRs. In addi-tion,
the system offered the scalability
required to move to an origin-and-destination
(O&D) revenue management environment
that fit into our long-term strategy.
Along with modernizing our technol-ogy,
we also re-evaluated our processes
and policies. For example, our long-term
revenue integrity policy was complex and
extremely flexible, to the point that custom-ers
were permitted to blocked seats in
advance with no commitment. That clearly
prohibited us from reaching our revenue
potential. Therefore, we decided to shift our
internal processes and policies, moving from
a complex and flexible approach to a strict
and simple one.
A SkyTeam Member In 2012, Aerolíneas Argentinas became the first SkyTeam alliance member in
South America. Its membership added 40 new destinations to SkyTeam’s network.
The proposed new policies were simple
and consistent across all markets we served.
However, they were very strict on ticket time
limits (TTLs), leaving no room for blocked seats.
In the beginning, the proposed TTL policy was
met by significant resistance from stakehold-ers.
However, after its implementation, early
results quickly demonstrated the importance
Considerable Investments As part of its revenue management transformation, Aerolíneas Argentinas made substantial investments to several areas
including aircraft hangars, airport facilities, VIP lounges and training simulators.
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Photo: SkyTeam Photo: Aerolíneas Argentinas

4. of maintaining a cleaner inventory, and the stake-holders
realized that the availability of more seats
at lower rates was good for everyone.
In addition, cleaner inventory and shorter TTL
enabled us to achieve better forecast accuracy
based on a true reservations curve, as well as
avoid the need to have higher overbooking levels.
Photo: Aerolíneas Argentinas
The results have been astonishing. After one
year of using the new real-time revenue integrity
technology, seats returned to inventory increased
110 percent, and the no-show rate decreased 33
percent.
Economical results of the first year reflected
an estimated savings of US$30 million on seats
ASCEND I PROFILE
returned to inventory (half of the savings were
realized since the real-time technology implemen-tation),
as well as US$10 million estimated savings
per year on no-show reduction.
We’ve also experienced additional cost savings
that we have not yet quantified, such as a reduction
of global distribution system booking fees from
unproductive bookings, denied boarding compen-sations
and meal wastage generated by no shows.
Another important result was that we dupli-cated
the seats returned to inventory without an
increase in the number of hits to the inventory sys-tem.
In fact, the message counts have decreased
compared with our previous revenue integrity
technology.
But it is not just the technology that has brought
us this level of success. Another significant
contributor to our real-time revenue integrity imple-mentation
was the teamwork displayed between
Sabre Airline Solutions’ experts and Aerolíneas
Argentinas’ revenue management team, as well as
the project methodology we used.
In the beginning, it was a challenge to align
our teams and manage cultural differences, so
we worked on the engagement process and
established common goals and a unique project
methodology to generate trust and partnership. As
a result, we worked hand-in-hand as a united team.
That level of support and partnership drives us to
do even more to improve our airline.
As such, our next initiative will be the imple-mentation
of the O&D version of Sabre AirVision™
Revenue Manager, which will help us improve
our inventory optimization at an O&D level on a
network that is connecting an increasing number
of passengers every year through our Aeroparque
and Ezeiza hubs in Buenos Aires.
We knew this type of transformation was
not going to be an easy task. Therefore, in the
early stages, we commissioned external consul-tants,
including Sabre Airline Solutions, Oliver and
Wyman, and Universidad de Buenos Aires, who
spent more than 2,500 hours to help build a sound
strategy, incorporate industry best practices, expe-dite
the transformation process and minimize the
risks related to the significant changes that resulted
from the transformation.
In the end, incorporating new aircraft into the
fleet, investing in the right technology, effectively
training employees to ensure they use the technol-ogy
to its full potential and aligning processes with
our business strategy turned out to be the best
path forward. This level of transformation was
required for us to secure a strong foothold in the
markets we serve as well as set us up for long-term
growth and success. a
Rafael Martinez can be contacted
at rmartinez@aerolineas.com.ar.
Airline Recognition Sabre Airline Solutions recognized key members from Aerolíneas Argentinas for
their dedication, partnership and teamwork that helped ensure the success of several project imple-mentations
under the revenue management transformation process. From left: Crisitan Denevi, Horacio
Rodriguez, Rafael Martinez and Mauricio Sana.
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33 Percent No-show Reduction
-33%
3,9
-22% 3,1
2,6
-15%
2011 2012 2013
No-Show Reduction Aerolíneas Argentinas realized a 33 percent reduction in no-shows after using
Revenue Integrity for one year.