This year has been the year of next-generation revenue management. We call this “Total Revenue Optimization,” or TRO for short. The concept is based on the holistic view of revenue management for airlines. its year-long series focused on the need for a next-generation revenue management system.
The first step towards TRO is a step back to consider how TRO can be realized. This comprehensive revenue management solution combines real-time data, portfolio integration, advanced analytics, and real-time decision support.
More than just revenue management
The next step, which we cover in depth in our latest article, discusses the benefits of a revenue management system with real-time capabilities.
The airline industry is dynamic. Business challenges continue to evolve for airlines. Customer demands and expectations continue to increase. Competition to acquire the right passenger is intense. Beyond acquisition, the pursuit of loyalty is even more intense.
Not only do these factors affect the successes of an airline, they also contribute to areas of friction for an airline’s revenue management program. These factors are the reason why certain functional areas within an airline have become essential to success. Revenue management is one such area of growing strategic and tactical importance.
TRO in real-time
Revenue management (RM) systems were created so airlines could make smarter decisions about what to sell, when to sell, who to sell to and at what price. There’s also the context: how does any given channel perform compared to another, while still consider the aforementioned what, when and who questions.
While most RM solutions are able to predict the best mix of passengers to maximize revenue, certain challenges still persist, most notably, the latency of the data in the system.
An RM system with real-time capabilities has three key advantages in improving analyst productivity:
- Eliminates data lag: decisions can be made swiftly and confidently, without delay
- Compiles data into one system: this holistic view reduces blind spots and boosts accuracy of predictive models
- Presents the data in an easy-to-consume format: less time is spent processing data and more time is spent pulling out actionable insights
When combined into one system, this approach improves analysts’ confidence in the data. This platform of confidence then frees up more analytical capabilities to dive deeper into the areas that directly impact revenue.
The ability of an RM system to support a quick response to all types of changes in the marketplace — big, small, internal and external — with real-time data is set to be an extraordinary gamechanger for the airline industry.
Want to learn more about how airlines can increase analyst productivity and revenue opportunities through real-time, event-driven data? Download the article now!