There has been much speculation on how revenue management should adapt to current market conditions. With the competitive environment changing by the hour, what are airlines doing and how are they innovating? As the revenue management solutions partner to over 80 airlines, Accelya is well-positioned to lift the lid on the key trends and explore changes in the discipline as the ‘rubber hits the road.’
Before the covid-19 disruption, airlines were already questioning the reliance on traditional approaches to revenue management. There was growing unease with the dependency on limited data inputs and the focus on the airline’s own historical booking, passenger itinerary information, and fare data. The fact that historical data is captured at only 24-25 points over the 365+ days of a flight’s history compounded this concern.
We now see airline revenue management looking much further afield than their own data for valuable insights. They are now including more real-time data, market capacity, competitive fares, look-to-books, shopping data, and many other complementary data sources.
Quick response time is key to keeping up with a rapidly fluctuating competitive landscape. So, we see airlines employing more automation, such as competitor fare actions and seat optimization strategies. Airlines are also looking to automated actions to override the thousands of bad recommendations (inaccurate outputs) from existing systems due to impaired data.
There is considerable innovation around flight analytics with more focus on real-time KPI scoring. This approach does not just use historical data. It also looks at recent flight booking behavior (e.g., from previous weeks) to create a score so the system can better understand the current situation. We expect to see data science playing a more significant role here in the near future.
Historic demand patterns may have been disrupted. However, we see revenue management making bold and innovative moves to overcome the challenges when put to the test.
To find out how Accelya helps airlines make smarter revenue management decisions, please visit https://w3.accelya.com/commercial/airline-revenue-management.