Today, we operate in a world where real-time data and seamless integration are normal expectations. As consumers, we assume that we can access the internet anywhere, anytime to sync our emails, music, calendars, and other applications across all devices. We also expect to be able to uncover news and events that affect us at the touch of a button.
With a similar expectation for revenue management, analysts can benefit from the introduction of new integration points. Imagine a future where an analyst has visibility into shopping trends. They may want to know how passengers are exposed to, access, react to and purchase products during promotions. This visibility and forecast of expected ancillary spend could drive significant incremental revenue if understood and monetised appropriately.
As the industry evolves, it’s imperative that the technologies that support airlines adapt to these changing market dynamics. Systems that exist in isolated environments will need to evolve to provide seamless integration with a variety of systems, so decision quality is maximised.
To remain competitive, airlines need to understand both historical and future traveller trends,” explains Sam Chamberlain, product management director at Sabre Airline Solutions. “To accomplish this goal, revenue-management analysts need to rely on revenue management systems to quickly understand developing trends, what happened on departed flights, which competitive offers were made, as well as, efficiently create and manage new offers accordingly.”
Looking at a single point in time isn’t accurate or scalable. “Unfortunately, without a tool that focuses on macro level analytics, that’s exactly what analysts are relegated to doing,” Mr Chamberlain tells The Blue Swan Daily. “Windows of opportunity are missed when an analyst’s time is spent tediously extracting, transforming and loading data across multiple systems”.
To overcome these challenges, he explains airlines need a revenue-management solution with easy-to-use advanced analytic capabilities and fully integrated workflows. “The ability to view the entire network is crucial to make informed decisions,” he says.
However, combining tremendous amounts of airline data into an intuitive user interface is not a trivial task – every second, millions of passengers are shopping for and booking flight itineraries. “To put this into perspective, on average, an airline with 500 daily flights can have up to 1.5 million data points that potentially need to be monitored,” says Mr Chamberlain.
The problem is today’s reservation management systems rely on limited technology platforms that essentially throw away 80% of this complex data that’s being generated. In addition, data management, processing power and forecast and optimisation algorithms have become increasingly advanced. This creates an even greater need for change.
“Next-generation revenue-management solutions are needed not only to process large volumes of data but also to focus on the user experiences, making the consumption of large data manageable,” says Mr Chamberlain. “They need to empower analysts to identify trends and opportunities to capitalise on the changes in real-time to increase revenue.”
To be successful, such a system would need to detect and present both regional and local phenomena such as long-term geo-political impacts or short-term effects like hosting major events such as the summer or winter Olympics or the FIFA World Cup finals. “Success in today’s revenue-management space requires a system equipped with advanced-analytics that detects and utilises these demand patterns that are not readily visible or consumable,” says Mr Chamberlain.
Effective systems in use today are enabled by the skilful analysts behind them and the pairing of a next generation revenue management system with a skilled revenue management analyst obviously has the potential to significantly increase revenue performance.
“Decisions will no longer be based on sentiment or chance, but rather will be based on 360 degree insights,” concludes Mr Chamberlain. “Bringing together an revenue management system that has a comprehensive handle on supply, demand and opportunity along with a skilled analyst will allow your airline to serve your most valuable customers.”