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!