5. LEG RM
LEG RM
Simple
BidPrice
OD RM POS
AVAIL
OD RM
POC AVAIL
Journey
Data
Building connecting
networks
Increasing LFs
& hub connectivity
Align OD RM & Avail
with Customer
30 years of RM Evolution
6. Benefits & Challenges
CHALLENGES
• Dual Organization Leg/OD
• Forecast Calibration & Accuracy
• Human factor
• Recruiting & Training
• Granularity
• Data, O&D Reporting & KPIs
BENEFITS
• Daily pricing feed
• OD & Booking curve forecasting
• Local vs Connecting tradeoffs
• POS Fare differences
• Exchange rates & surcharges
• Network Optimization
KEY LEARNINGS
#1 Forecast is key
#2 Never underestimate Change Management & continuous training
#3 Availability takes a whole new dimension
7. “Modern Commerce in the Airline Industry:
Achieving consistency & alignment across the entire
commercial process to present, in real-time, to each
customer, the offer that will allow capturing his/her
maximum WTP
8. Beyond traditional RM
Unless presented as distinct offers adapted to each customer’s need and WTP, bundling
together selected attributes (seat, upgradability, amenities, flexibility…)
Dilution
RM
Perfect average
value for the
next seat
Selling the exact same product simultaneously at 2 different prices is risky
WTP
Lost sale
Bid-Price
9. Multi-dimensional Segmentation
Airlines’ responses are shaping-up to capture the entire WTP:
Branded Fares or Fare Families
• Concept created in 2005
• Simultaneous offers of different products
at different prices
• Target distinct demand segments
• Not requiring information on the customer
Personalized offers
• Target each customer individually
with relevant offers to improve
conversion rates
• Leverage CRM capabilities
• Understand the interest & habits
of individuals
• Estimate WTP based on history of
purchase
10. Seamless & Direct Experience
DISTRIBUTIONE-COMMERCE
REVENUE
MANAGEMENT
SALES
Rethink how the
development of these
functionalities affects RM
techniques & user skills
Merchandizing
Availability Proxys
JD & POC
Obsolescence of caching
Trade education
NDC
Merchandizing
Instant calendar search
Common platform for all devices
Optimal Itinerary display
11. Re-Engineer RM
Packaging & discounting…
at what price?
• Optimal bundle pricing?
• Optimal discount?
• What is the value of integrating
ancillaries & branded fares in the
forecasting and optimization processes?
Longer term fundamental
transformations
• Intuitively, a continuous demand
curve would suggest…
• Continuous Dynamic Pricing?
• Towards classless Revenue
Management?
Increase accuracy to be more
pro-active
• Update forecasts based on
advance booking trends
• Capture Customer Choice
• Integrate new data sources
predicting velocity and yield spikes
+ +
12. Key Role of Product Distribution and
E-Commerce in Sustainable Profitability
Air transportation has entered the era of “e-everything”:
shop, book, pay, change, check-in, on-board purchase…
• Modernize distribution processes & technologies to support this fast
transformation and be quicker to market
• Create a seamless digital experience consistent across channels
• Adapt to the customer’s preferences and habits as we expand to serve new
countries & destinations and aim to reach out to more customers
13. On Brand damage…
Social Media are a key player, having the ability in a
manner of seconds to stimulate demand or damage a
brand:
Airlines need to become fast, efficient and exact:
slow & approximate is not an option
Our revenue acceleration & our brand depend on it
14. “Modern Commerce in the Airline Industry:
Achieving consistency & alignment across the entire
commercial & operational process to present, in real-time,
to each customer, the offer that will allow capturing
his/her maximum WTP while protecting the brand
15. SCIENCE INTEGRATION SPEED FLEXIBILITY
Airlines will seek to manage their own destinies if they do
not find solutions satisfying these needs
