Sabre in conversation with Air Serbia
Sabre’s Bhaskara Guntreddy, Vice President Product Management, Offer Optimization, sat down with Jiří Marek, Chief Executive Officer of Air Serbia to discuss how personalized travel retailing is bringing new revenue opportunities to the airline, and how Sabre is supporting that with its Retail Intelligence suite of products.
With Retail Intelligence, Sabre is helping to deliver an Offer and Order-based model for intelligent travel retailing. With new capabilities coming this year – including branded fare recommendations and enhancements to trip purpose segmentation to provide more targeted offers – the ongoing evolution of the Retail Intelligence suite is a top priority for how Sabre supports the growth of airline customers.
An evolving paradigm: from revenue management to customer management
J: I’m trying to push the team to forget the term “revenue management” and think of it as “customer management”. We want to enhance the whole experience customers have with us, and extract the maximum possible value from that too.
B: Airlines are now having to deliver more with less, so automation is critical to them being more responsive to changing market dynamics and customer expectations. By taking into account a number of contextual factors, Air Price IQ can generate the most appropriate offers to customers.
What is Sabre Air Price IQ™?
B: Air Price IQ is a tool that unlocks incremental revenue for airlines. Using market context, customer context, shopping context, and booking velocity, Air Price IQ produces the most relevant offers and creates opportunities to improve conversion.
It’s a cloud-native solution, hosted on Google and using Google’s AI and ML toolkit. It brings together Sabre’s expertise, data modeling specialisms and travel insights with Google’s array of technologies. What we’ve built in Air Price IQ is something that allows you to implement dynamic pricing at scale, and seamlessly – for exponential growth of transactions when airlines take control of the offer.
For Air Serbia we’ve delivered an end-to-end solution from shopping, booking, exchanges, refunds, the data feed and all the way down to revenue accounting data. We are also working on further personalization solutions together, to continually enhance their customer’s experience.
What are the benefits of Air Price IQ to Air Serbia?
J: We implemented dynamic availability last year and saw close to 1% revenue improvements. We then implemented Air Price IQ at the beginning of that September and so far, we’ve seen over half a percent improvement, but we are still in the early phase*. As Bhaskara rightly mentioned, it really is a joint development, with more testing to come. We believe that the improvements in value extraction that we’ve seen already will only continue to grow.
*This conversation took place on September 29, 2022. Air Serbia saw a .5% improvement in revenue in the first month of Air Price IQ implementation.
Why did Air Serbia implement Sabre Air Price IQ?
J: We completely changed our distribution strategy during COVID and wanted to be free of the constraints of RBD structures, move from static to dynamic, and also move away from rules-based pricing. As a smaller regional carrier we don’t really have the capabilities, resources and investment to develop this on our own. So when we searched the market for a strategic partnership instead, the natural choice was to do it with the Sabre.
Besides dynamic pricing of airfares, what else should airlines be thinking about when it comes to personalized offers?
J: Dynamic offers is a must for airlines now, and in the very near future it will be fundamental to surviving. Personalization doesn’t simply end with dynamic pricing though, it’s about following up with ancillary offers once the offer has been delivered. That is really important.
B: When using Sabre Ancillary IQ™ – the other product in our Retail Intelligence suite – with airline clients we’ve found up to 10% uplift in ancillary revenue of seats, and have observed similar results when selling upgrades too. Another POC we conducted at another major airline saw an increase of 10% – 20% upgrade revenue, depending on the business cabin operating capacity.
“Air Price IQ is a key driver in our move from static pricing to dynamically created personalized offers.”
Jiří Marek | CEO, Air Serbia
Looking Ahead: transparency, collaborations and continuous learning
Transparency and collaboration
B: Thanks to Air Serbia and the revenue management team, we managed to work together closely to validate the solution. For a Revenue Management Analyst to give up control is a big deal. So for them, machine learning should not be a black box, but more like a glass box where they are able to see and understand why and how it is generating offers. I’m really thankful to Jiří and his team for their contribution and how they worked with us.
We are also providing airlines the flexibility to use their own data in the solutions. This involves bringing their own datasets to train and enrich the models, as well as being able to bring their own models to test which is more effective – ours or theirs. This sort of collaboration is what makes truly future-proofed solutions and real partnerships.
Continuing to evolve solutions together
B: One of the main tenets of Retail Intelligence, and all the platforms we’re building, is value measurement and continuous learning. How can we give our airline customers full transparency into how we’re bringing value to the table? How can the tools evolve so that we can address what isn’t working, and optimize what is? We take this continuous improvement approach in collaboration with our partners – constantly evolving as new challenges and opportunities arise.
Dynamic offers are allowing airlines to respond quickly to unpredictable market changes and optimize their revenue potential while providing personalized options that meet the increasing demands of business, leisure and other segments of travelers. Sabre’s Retail Intelligence suite of products, developed in partnership with Google, is helping airlines move from static to dynamic offers to stay competitive, improve customer satisfaction and increase their revenue potential with a higher conversion of offers. Find out how your airline can too.