The evolution of airline distribution and revenue management

Thomas Fiig

Chief Scientist, Amadeus IT Group

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The Internet has accelerated the emergence of LCCs and changed the way travel is bought and sold by airline websites, metasearch players, and OTAs. To deal with these changes, distribution and revenue management practices have had to evolve together.

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Distribution systems are critical for airlines because they help them reach high-value travellers, support airline growth beyond their home markets, facilitate partnerships across the travel industry, and create efficiencies in traveller servicing through travel agents.

Technology is changing both the distribution landscape, and revenue management techniques. The Internet enabled the simplified fare structures of LCCs to flourish and full service carriers were forced to match these fare structures in order to remain competitive. Many of these carriers were equipped with only traditional revenue management systems in place, which caused significant revenue losses.

This need for advanced revenue management technology formed the basis of our recent partnership with SAS, which has positioned Amadeus at the forefront of next generation distribution and revenue management technology.

We are ideally situated at the crossroads of content and technology, which gives us the ability to create cutting-edge revenue management systems that will help airlines optimise merchandising opportunities and create a truly personalised experience for their customers.

For more about this important topic for airlines, here’s a paper I co-authored along with my colleagues Umit Cholak, Mathilde Gauchet, and Benjamin Cany, entitled ‘What is the role of distribution in revenue management? – Past and future’. Have a look at the Amadeus Altéa Revenue Management Suite websitefor additional information.