Pricing & Revenue Management Blog

Why invest in multiplatform airline analytics?
Pablo Vivanco Pablo Vivanco Jul 6, 2016 7:30:00 AM

Why invest in multi-platform airline analytics?

Revenue managers know it best: one thing is to get insightful data when they are monitoring competitive movements. However, understanding trends and figures for key variables such as pricing in any place and time, in order to make timely responsive decisions, is something very different.

Roberto Pérez Castro Roberto Pérez Castro Jun 17, 2016 1:25:52 PM

Airnguru airline pricing intelligence "refreshing" at Aviation Festival

Airnguru was a “refreshing novelty” of the two-day Aviation Festival Americas in Miami, thanks to a user-friendly competitive analysis tool, during a conference where Big Data analytics was a recurrent discussion.  

How Customer Relationship Management helps pricing intelligence
Sergio Mendoza, PhD Sergio Mendoza, PhD May 23, 2016 10:55:00 AM

From CRM to Pricing

When revenue managers or pricing experts hear the concept Customer Relationship Management (CRM), they typically believe it’s just a sales and marketing asset, not to be mixed with revenue optimization processes. Are they right or wrong?

Javier Jimenez Javier Jimenez May 2, 2016 9:52:52 AM

Is Data Science the future for airline revenue management?

Artificial intelligence and data science isn’t new in the airline industry. However, its development has only recently begun to make a leap forward for two reasons:

Sergio Mendoza, PhD Sergio Mendoza, PhD Apr 22, 2016 10:00:00 AM

Ancillary Revenues: the Good & the Gaps

Internet, the enabler; Low Cost Carriers, the flagships

We (the elder) remember those obscure times when legacy carriers were trapped by the oligopoly of the Global Distribution Systems (GDS's) outspread through their exclusive brick & mortar travel agency partners, and had no control of their ever growing distribution costs ("the distribution cost trap"). I remember those times when total distribution costs (including travel agent commissions, booking costs, sales office costs, etc) represented around 20%-25% of legacy airlines' revenues.

Javier Jimenez Javier Jimenez Apr 6, 2016 1:44:44 PM

Are airlines making the most of Big Data?

The current airfare management model has become outdated regarding data analysis. While other industries have taken advantage of big data analytics, airline pricing is still behind regarding market insight, reducing its flexibility and capacity to respond to market trends, competitive moves and customer demands.

Sergio Mendoza, PhD Sergio Mendoza, PhD Mar 22, 2016 11:00:00 AM

How do changes in time zones affect the airline industry?

Unexpected time zone changes are common around the world. Authorities, when deciding on changing a time zone, don't seem to understand the holistic and negative impacts they cause. They disrupt our agendas at work, generating confusion and lost productivity for weeks and sometimes for months. Computer operating systems, smartphones, productivity software, etc, loose synchronization. Time zone changes also represent a challenge in the management of risk. In the airline indusrty, time zone changes have logistical, financial and commercial consequences, affecting airport operations, flight itineraries, distribution and, of course, passenger service and airlines' costs.

Sergio Mendoza, PhD Sergio Mendoza, PhD Mar 16, 2016 11:00:00 AM

How do airport fees influence airline pricing and demand stimulation?

In a previous post we spoke about fuel, exchange rates and other variables influencing pricing strategies. Today we will focus on a single, external variable, that affects the potential benefit of pricing strategies.

One of the most relevant tasks for an airline is making sure that the investment they made in fleet and itinerary gets the maximum possible return. This task is in the hands of several "post itinerary" functions within the airline, involving at least pricing, revenue management, sales and marketing teams, which, empowered by sophisticated analytics, make their best efforts to maximize the expected net revenues.

However, there are external barriers that constrain the growth potential of the airline and limit the power of the airline's pricing strategies. Some of these constraints may produce a relevant social detriment, because they limit the service quality and growth potential of the airline business as a whole and thus, they damage the economy. It may be the case, for example, of airport taxes and fees.

Javier Jimenez Javier Jimenez Mar 9, 2016 12:00:00 PM

Alternative customer experience can lead to new airline pricing models

A few months ago, an innovative and revolutionary start-up airline was launched at the APEX Expo 2015. It wasn’t Richard Branson with a new version of Virgin, or Mark Zuckerberg investing in the airline industry. It was Poppi, an airline whose approach to air travel is similar to Starbucks’ love for coffee: consumers don’t pay for the service, but the experience.

Sergio Mendoza, PhD Sergio Mendoza, PhD Mar 3, 2016 11:00:00 AM

How do fuel and exchange rates affect airline pricing strategies?

Pricing and revenue management teams aim at maximizing the expected net revenues produced from a given itinerary. Their fundamental levers are the price structures (demand segmentation rules and price levels) and the inventory allocation (demand forecasts and inventory optimization and allocation). Robust airline pricing and revenue management strategies involve the analysis and visualization of some critical variables and their long term behavior. These variables affect the optimum prices and inventory allocation directly or indirectly, in sometimes complex ways and substantial amounts.

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