Research report

A new formula for airline success: customized offers

Foreword by Meg O’Keefe

Director, Offer Suite Solutions Airlines, Amadeus

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Airlines are moving towards customized offers. How can airlines price, position, and promote their products and services so that their offers meet individual traveler needs?

A new formula for airline success: why customized offers are the future of airline marketing and revenue management​

Offering just a total fare that a traveler can take or leave is no longer enough. Customized offers will lead the way airlines interact with travel shoppers. The potential is big- more than half of the airline executives surveyed, expect this evolution to increase passenger revenue by 15% or more. But airlines won’t be the only ones to benefit with increased revenue and competitiveness. For travelers, gains may include greater satisfaction, more empowerment to make choices, and clarity about the offers they see.

This paper will explore:

  • How the work on customized offer creation draws on an interdisciplinary approach across airline departments and technical disciplines.
  • How airlines can combat commoditization and help avoid the impact of fare wars.
  • How the rise of customized offers will become a new formula for success for airlines and customers alike.

Airlines are starting to move toward an interplay between revenue management, ancillary revenue, and customer analytics. Those airlines that can integrate these three components together under a unified model will have a clear competitive advantage in the future.

— Michael Farrugia, Planitas Airline Systems

The customer does not exist. Because every customer is different. Customer-centric firms acknowledge the heterogeneity among our customers. More than that, we celebrate it because we understand that heterogeneity offers us opportunity.

— Peter Fader, The Wharton School

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