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Amadeus

  Blog

Racing towards the 4 steps to airline revenue management perfection

Suraj Mohamed

Principal Consultant, Revenue Optimization, Amadeus

In Formula 1, it takes around two seconds to complete a pit stop. This incredible feat is possible thanks to the organization and synchronization of each member of the pit crew. While drivers like Lewis Hamilton get the star treatment, it’s the pit crew who can make or break the race. You could say they’re the unsung heroes of F1 racing.

airline revenue

 

How can airlines achieve this level of perfection in the revenue optimization field? By transforming their revenue management business, which can be done in 4 steps:

  1. Organization change management – It’s key to set up clear goals and define a strategy to achieve revenue objectives and most importantly profitability.
  2. Process change management – Processes need to be efficient and effective. These should include strategic processes like revenue management and pricing strategy as well as operations processes such as demand planning, price sensitivity management and capacity management.
  3. Working practices – Focus on continuous improvement with an emphasis on the following practices; Plan (planning is key in RM), Do (implement planned actions in the system), Evaluate (data & information), and Act (continuous improvement).
  4. Team oriented approach – Setting up a winning culture is critical: celebrate success and highlight collaboration.

By following the above steps, our revenue management expert support is helping airlines to produce positive results. We have seen a 5% revenue increase for one of our main customers and we have delivered double digit growth for another airline in its key origin and destination traffic.

Our technology is a big part of this as we continuously work on improving our products and services to help our customers provide travelers with better journeys.  However technology on its own wouldn’t mean much without our ‘pit crew’ of revenue management experts. They are specialists with a simple aim: work with our airline customers to achieve the highest possible revenues for each customer journey. And this is more important than ever, given the change in traveler shopping behavior and the competitive market place that is driving down prices.

We think it’s time to rethink revenue optimization and look to more sophisticated systems which are ‘customer’ rather than ‘seat’ centric. Have a look at the Amadeus Airlines Revenue Optimization site and download our Total Offer Optimization report to learn more.