put the revenue analyst truly in the driving seat of airline revenues
TRANSCRIPT
Put The Revenue Analyst Truly In The Driving Seat Of Airline Revenues David Stoyle, Head of Amadeus
Revenue Consulting Practice
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Putting the revenue analyst truly in the driving seat David Stoyle, Amadeus
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Napoléon Bonaparte (1769-1821)
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RM challenges
Revenue Management has achieved great things for airlines, but can be even better
Usability
Process
Data Merchandising trends
Customer value
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A cross-airline process?
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Revenue mgt
Pricing Fleet
assignment
Airline Organisation
Fleet assignment
Pricing
Revenue Mgt
Distribution
Scheduling
Flight Operations
Different roles and responsibilities IT systems to match specific requirements
… Revenue Accts
Loyalty Sales
When internal coordination would help
Pricing restricts fares Bookings come in slowly RM analyst not aware of fare restrictions
Bookings come in fast Schedule dept increases capacity Pricing dept raises fares RM department closes classes
Marketing department launches big campaign Availability has been closed for many promotional fares
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Revenue Management needs real-time data
• Pro-rating rules change
• Yield impacted
Revenue Accounting
• Top customer • Special
corporate fare
Customer Value • Ticketing time
limits • Load factors
and others
Revenue integrity
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Fare Families can bring further revenues
RM not adapted
Limited to e-com
Basis for retailing
Prompt upsell
Rebuild trust
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5 to 20% additional revenues within the sales channel, according to studies*
* Source: “Fare Families: RM Forecasting and Optimization Models”, P. Belobaba, C. Hopperstad, AGIFORS Revenue Management, May 18-19, 2009”
Ancillary Revenue per passenger
Source: Airline reported data 2009/2010 (USD) 61
0.0
5.0
10.0
15.0
20.0
25.0
30.0
$
Ancillaries are a challenge to Revenue Management
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Remaining seats
$
Ancillaries are a challenge to Revenue Management
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Remaining seats
$
Are you fast enough to react to market changes?
Next step: final in Munich
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3 – 2 New demand pattern in one minute
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How do you value passengers?
One-to-one pricing?
Sale value
Customer
Point of Sale
Corporate recognition
Type of trip
Interline partner
Competition
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Efficient revenue management policy?
Traveller
MyAirline.com $600
$650
$400
$700 $550
Cache effect ? Journey Data?
Revenue Management
& Pricing
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The Amadeus approach to Revenue Management
Optimise revenue at all steps
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Amadeus Distribution Platform
Amadeus Revenue
Maximisation products
Amadeus Full
Dynamic Availability
Amadeus Revenue Integrity
Competitor information
Altéa Revenue Availability with Active Valuation
Altéa Yield Watcher
Amadeus Revenue
Accounting
Altéa Revenue Management
Usability for heightened analyst effectiveness
Common log-on
Common interface
Same business
rules Reporting Simulation
tools
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RM and pricing more tightly integrated
0
1000
2000
3000
4000
0 500 1000 1500 2000 2500
Yield and price comparison
Yield
Price
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Assessing the value of an individual sale
Remaining Seats
Net Revenue (Yield)
Bid Price Curve
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Y9
Y12
…
…
…
Y16
Y6
Y1
…
Point of Sale
Corporate recognition
Interline
Trip
Customer
Fuel surcharge
Competitor
Ancillary
You can adapt yield applied in real-time in the inventory
Managing RM through sales channels
Direct real-time access to inventory availability calculation
Applies to all sales channels
Removes the need for a cache
Applies RM policy consistently and immediately
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The impact of fare families
Integrate customer choice in PSS and RM.
Based on probability of upsell potential
Fare Families
L
H
K
Q
time
RBD
Current RMs way to close classes
L
H
K
Q
time
RBD
Better customer behavior modeling to force sell-up
L - 150
H - 120
K - 100
Q - 50
RBD hierarchy
Saver Flex
Q, K H, L
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And beyond
Building for the future
Profit forecast
Optimise after each booking
Real-time revenue
accounting data in yield
Ticket Time-limit optimised
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A unified revenue vision throughout the airline commercial process
React and get your strategy out faster
Real-time alert mechanisms to react to market changes
Sales, Revenue Management, Revenue Accounting
Real time revenue: computed at booking time
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Come and see us at the booth!