Modern airlines are exploring new and innovative solutions to transform Revenue Management. This is driven by system inefficiencies that negatively impact ROI. One of the major gaps that need to be addressed, therefore, is BI inadequacies. According to Sabre Research, accurate and real-time data-based revenue management can unlock a 0.3% revenue jump for airlines. However, in the absence of cutting-edge technology, revenue managers stand to face several challenges.
Before we delve deeper, let’s consider 4 prime complexities which require resolution:
Parity, Visibility, Marketing & Personalization – 4 Key Pain-points:
1. Rate Discrepancy affecting Consumer Confidence
Outdated data impedes decision-making, especially without a mechanism to proactively track rate parity. What’s needed is an intelligent alert system, triggered whenever disparity is detected between the airlines’ own prices and OTA/Meta rates, ensuring revenue managers are always updated. In fact, recent deployments suggest that addressing discrepancies in rates could increase direct bookings by 1.5%.
2. Visibility Disparity on different channels
Prices at every route should be kept at an optimal level, balancing demand with internal cost requirements. Individual routes need to be tracked and tour-based packages monitored consistently, across OTA sites. Often, tours offer retail prices to end-customers, exploiting discounted airline inventory. This could lead to significant leakages, specifically on popular routes, and negatively impact the bottom line.
3. Ineffective marketing campaigns
With airlines unaware of online rankings, promotions risk being out-of-sync with real-world trends. Channels and data sources covered are largely limited, with little to no information available on segmented (inbound/outbound) pricing. That’s why, revenue managers need to have a handle on the latest market insights, across their own listed rates, as well as OTA price patterns and metasearch engine results.
4.Inability to personalize flight experiences
In-flight sales are emerging as a major revenue channel and airlines that correctly gauge consumer behaviour could monetize this information. Travellers crave for personalized booking experiences. However, data and intelligence on ancillary businesses often lack the requisite customer KPIs, preventing revenue managers from responding with timely, ROI-focused decisions.
Resolution of Pain points:
Smarter BI based on extensive data, and dashboards that offer quick, actionable insights
A constant focus on the market pulse is an intelligent starting-point – accurate, complete, and up-to-date datasets, combined with powerful analytics to uncover actionable insights. This would help revenue managers outline game-changing strategies and discover new possibilities through previously hidden data points.
The ideal solution would offer a clear competitive edge, addressing the all-too-frequent scenario where customers get a better deal on trade sites and are rerouted, leading to revenue leakage.
Using state-of-the-art BI technology, airlines could ‘look under the hood’ and plug existing gaps in the framework. Essential features would include up-to-date insights on rate parity, exception flagging mechanisms, market positioning analysis, trends & variance mapping, and top violating OTA/wholesaler identification, among others.
In order to mitigate any damage on Revenue generation pathways, it’s important to look for 5 warning signs in Airfare.
Why Airfare Analytics Needs an Overhaul?
1.Boosting brand loyalty among the connected flier segment
Today’s travellers are open to sharing information with the airline through their digital footprints. Airlines can harness this data to truly understand traveller preferences and fine-tune in-flight experiences in tandem. Aware of these possibilities, customers expect a personalized journey, acutely mapped in terms of rates, privileges, and attention.
A recent study by IATA suggests that the direct online channel is the fastest growing platform in terms of sales and interaction, especially among leisure travellers. Clearly, cost is not the only factor at play and offering superior experiences could help airlines earn the trust and loyalty of the modern, connected jet setter. Robust information around ancillary products and services is key to leveraging the full potential in this demographic.
Airlines must also maintain rate parity between published fares and that of the OTAs and Metasearch Engines – pivotal to market credibility. Access to the latest fares and supporting analytics, continually alerting stakeholders when rates are out of sync, would help action uniformity across multiple channels.
2.Executing on-time actions in response to up-to-date data
Airlines relying on historical records, such as last year’s summer trends for this holiday season, risk investing in ineffective promotions.
Companies need current and real-time data on events, news and seasonal travel shopping behaviour. Competitors offering deep discounts could undercut base fares and also reduce cross-sell/up-sell opportunities. Platforms providing ‘near-live’ insights, analyzed in-line with inbound information gathered from disparate sources, could power more informed decisions.
3.Enabling comprehensive revenue strategies with complete datasets
Incomplete data will lead to flawed analysis, falling short of desired outcomes. For instance, does the solution deliver pricing data from different Points of Sales (PoS) across geographies? Are all stakeholders aware of the airline’s positioning on OTAs and Metasearch engines?
The answers, here, not only help maintain rate parity, but also enhance customer understanding and demand forecasting. Future campaigns could be shaped according to this database, offering significant gains via direct bookings and ancillary service sales.
4.Improving visibility with intuitive interfaces and responsive dashboards
Market data presentation and integration with existing systems is essential when taking definitive actions. Revenue managers need ease of access and seamless functionalities across various touch points. In fact, the information should be readily available, anytime, anywhere, via multi-device support.
A single version of truth covering multiple data sources, coupled with customizable views and notifications, play an important role when identifying price disparity and violations against approved thresholds.
5.Driving tangible actions through data insights
Stakeholders must take an overarching look at their dashboards, asking one core question – what actions can I take here and now? If the solution doesn’t furnish an adequate answer, revenue managers need to look elsewhere and explore platforms better equipped for real-time decision-making.
A dashboard that does not provide facts around ancillary, mobile, and PoS rate shopping details, is likely to generate redundant insights for revenue managers.
In today’s hyper-competitive environment, airlines are looking to adopt BI tools that go beyond mere ‘rate shopping’. Partnering with a vendor bringing the capabilities as discussed, and with an eye on future industry movements, would be a major differentiator. This would help reimagine revenue management as a flexible, intuitive, and real-time framework that’s always a step ahead of market demands.