Pricing & Revenue Management Blog

Will Artificial Intelligence Boost the Evolution of Pricing?

Sep 27, 2016 9:25:37 AM
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Airline Pricing in the Era of Big Data and Artificial Intelligence

CEO Sergio Mendoza explained how Big Data and Artificial Intelligence (AI) are changing our lives, our jobs and airline pricing, as Airnguru participated as an exhibitor at Aviation Festival Europe 2016, held in London on 7-9 September.   

This international conference and exhibition gathered around 2,000 senior IT, commercial and marketing management professionals from airlines, travel agencies, OTAs, travel buyers, app developers and travel technology companies.

The event discussed the latest trends and technologies for the aviation industry, such as the development of data science and the use of the Internet of Things (IoT), with keynote speakers such as:

  • Dame Carolyn McCall, CEO, EasyJet.
  • Willie Walsh, CEO, IAG.
  • Jayne Hrdlicka, CEO, JetStar Group.
  • Sir Tim Clark, President, Emirates. 

The Emirates case was especially exciting: we learned in depth how the airline partnered with the University of Oxford on their data science lab for research in areas such as machine learning, price-following behavior, and cyber security.

Airline Pricing, Big Data Mining and Artificial Intelligence

As part of the conference, Airnguru co-founder and CEO Sergio Mendoza spoke about “Airline Pricing in the Era of Big Data and Artificial Intelligence". He discussed the B2B tech revolution, and how AI would affect our lives, help our jobs and even change the future of airline pricing strategies.

Airnguru's presentation was part of a select Innovation Startup series, where cutting edge companies showcased groundbreaking solutions on customer experience, virtual reality, multimodal journey and dynamic pricing. 

Sergio explained that AI is producing many gadgets, devices, and applications to make our lives easier, more efficient, more fun and convenient, empowering citizens with robotic advisors, communication with service providers and interaction with machines in many of our daily activities.

He pointed out that:

  • According to the AI summit figures, over the next 10 years, enterprise spending on AI technology will increase from $200 M to over $60 Billion. That’s an x300 increase!
  • The University of Oxford calculates that 1 in every 2 current jobs risk of being automated by machines, forcing skilled workers to reallocate.

At the same time, he explained the advantages of machine learning for data generation and management:

  • To extract insights, alerts, in-depth understanding and emerging patterns. 
  • To make recommendations, decisions, forecasts, diagnostics, and complex human tasks.

Airline innovators' panel

Later, Sergio joined a panel hosted by Rafi Dabush, Innovation & Entrepreneurship Manager at El Al Israel Airlines, to discuss “How are airline innovation hubs driving the future of Aviation?”, with:

  • Yossi Cohen, co-founder and VP marketing, Quick Lizard.
  • Asaf Gendler CEO & Co-Founder, BidFlyer.
  • Will Rumsey, Head of Partnerships, Opinsta.

Directing AI and big data towards revenue management

At the end of his presentation, Sergio pointed out that, since pricing and revenue management have high impact on the bottom line, corporations that take the lead in AI will see enormous advantages and benefits such as:

  • Increased impact on revenues and bottom line. 
  • Increased productivity.
  • Improved service and reduced churn.

The applications are exponential, but highly underexploited! For instance, in reactive pricing decisions, game theory, or forecasting.

As part of the exhibition, Airnguru introduced state of the art solutions to help airlines increase profits through price optimization to:

  • Quickly visualize price trends.
  • Gain new visual insights to airline's competitive position.
  • Explore the full current and past market fare structure.
  • Get immediate alerts of problems.

The future of airline pricing intelligence: mobility

The three-day event also discussed the mobile future of software for the aviation industry. That is why we introduced a portable solution of our own: an executive mobile app for executives and senior management to connect, visualize and customize analysis on:

  • Real-time lowest published prices.
  • Price differences.
  • Positive and negative trends. 

 How would you like to prioritize Artificial Intelligence in your business? You can download our London presentation here.

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Tags: Big Data, Artificial Intelligence, Airline Pricing
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Airlines can add up to 5% additional net revenues to the bottom line if they improve their pricing processes, access real-time data to calculate fares, and rely on cloud-based technology to uncover hidden revenue opportunities, according to "The High Cost of Doing Nothing," our recently published infographic.

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