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It is no secret that airlines operate in a very challenging environment. Having worked in the travel industry for many years, I can say with certainty that competition has never been fiercer than it is today.
Revenue management systems play a key role in helping airlines maximize seat revenue. Singapore Airlines chose the next-generation Amadeus Origin & Destination solution at a time when it was re-designing the customer journey and re-working how their existing tools and processes should dovetail into this.
There were several reasons for this, primarily a more upbeat market, in relative terms. Singapore Airlines had also put in place a new revenue management system in 2017 to effectively harness the upbeat turn in economy to boost revenue.
With Amadeus systems underpinning many of Singapore Airlines customer touchpoints, it was ideal for them to leverage on all the insights collected. This allowed the airline to better understand its customers and could intelligently propose offers at a price customers would be willing to pay and yet still makes economic sense to the airline. More than that, in Singapore Airlines, we found a partner who not only understands the evolving landscape, but has a long term commitment to innovate in order to stay ahead of the curve.
A system is only as good as the people who use it. In fact, changing a system is the easiest part. What is more challenging, yet critical for Singapore Airlines, was changing business processes and aligning an organization to get the most out of its new revenue management system.
A dedicated Amadeus team worked closely with Singapore Airlines guiding its internal transformation, to put in place the right processes alongside the right people with the right skillsets and mindsets in the areas of revenue management and pricing.
Since adopting the solution in early 2017, Singapore Airlines observed a significant improvement in Fare Family optimization with actual results exceeding the initial estimate (of a 2.5% revenue improvement). Alongside RASK (Revenue per Available Seat-Kilometer) improvements, the airline has seen staff productivity gains from the automation of many operational activities that previously required manual intervention. The company has already reaped the return on investment and is seeing a growth in passenger flown revenue for the first time in several years.
Moving forward, we are working with Singapore Airlines to look at ways to integrate innovative price optimization tools that go beyond our industry’s current capabilities. These tools will allow the airline to fine-tune, in real-time, the price to offer its customers, taking into consideration trip attributes as well as prevailing market conditions.
Airlines are now starting to look beyond the traditional air transport space, at what their customers would need as part of their journey, in order to proactively offer individualized packages through their merchandising platforms. And this brings us back full circle to Revenue Management, or rather Total Revenue Management.
What we have accomplished with Singapore Airlines is but the first step towards this and an exciting journey lies ahead for us.
Read the case study for more details.